Lack Of Jurisdiction Strikes At The Root & Cannot Be Waived By Consent: Madhya Pradesh HC Holds High Court Cannot Appoint Arbitrator In ICA
|The Court held that mandatory provisions of Section 11 cannot be waived by parties even after participating in arbitral proceedings.
The Madhya Pradesh High Court, Jabalpur Bench has held that neither by consent nor by acquiescence can jurisdiction be conferred on the Chief Justice of a High Court to appoint an arbitrator in an International Commercial Arbitration (ICA). The Bench noted that such an appointment strikes at the very root of the case and remains a nullity, as the power to appoint in an ICA is exclusively reserved for the Chief Justice of India or their designate.
The Court clarified that a party's failure to raise jurisdictional objections during Section 11 proceedings, before the arbitrator, or even under Section 34, does not validate otherwise non est proceedings. The provisions of Section 11 are mandatory and non-derogable, therefore, the failure to object does not constitute a waiver under Section 4 of the Act, it noted.
Chief Justice Sanjeev Sachdeva and Justice Vinay Saraf observed, “Thus neither by consent nor by acquiescence jurisdiction can be conferred on the Chief Justice of a High Court or a person or institution designated by him to appoint a sole or third arbitrator in the “International Commercial Arbitration”. Lack of jurisdiction hits at the very root of the case and cannot be waived even by consent or merely because of participation in the arbitral proceedings without any demur. Failure of a party to raise any objection of jurisdiction in the proceedings under Section 11; before the Arbitrator during arbitration proceedings or under Section 34 of the Arbitration Act would not validate an otherwise non est proceedings…”.
Senior Advocate Ravindra Singh Chhabra appeared for the appellant and Advocate Om Prakash appeared for the respondent.
In the matter, a works contract for highway construction between Ssangyong Engineering (a Korean company) and S.B. Engineering Associates (an Indian firm) was signed in the year November 03, 2007.
Pursuant to the termination of the contract by Ssangyong in the year June 02, 2009, SBE invoked arbitration. When Ssangyong failed to appoint an arbitrator, SBE approached the Madhya Pradesh High Court under Section 11(6) of the Act, which subsequently appointed a retired judge as the Sole Arbitrator.
Ssangyong participated in the arbitration and filed a counter-claim without challenging the High Court’s jurisdiction to make the appointment. In 2016, the Arbitrator passed an award allowing claims from both sides. Both parties challenged the award under Section 34 before the Commercial Court at Jabalpur, which dismissed the applications in 2022. Ssangyong then appealed under Section 37, raising the jurisdictional objection for the first time.
The Bench noted that since Ssangyong is incorporated in Korea, the dispute is an International Commercial Arbitration under Section 2(1)(f) of the Act.
“The appointment of the sole Arbitrator by the designate of the Chief Justice of the High Court cannot be treated valid as said designated person was not competent to appoint the Arbitrator in “International Commercial Arbitration”. If proceedings are initiated before an authority, which has not been appointed in accordance with law, such proceedings are void ab initio and any order or award passed by such authority is a nullity”, the Bench noted.
“The entire proceedings suffer from a patent illegality. If the very seed of the arbitration proceedings is tainted then the tree would be tainted. If the very appointment of the Arbitral Tribunal was without jurisdiction then the entire proceedings and the result of the proceedings would be without any jurisdiction, non est and void ab inito”, it further noted.
Cause Title: M/S Ssangyong Engineering and Construction Company Ltd v. M/S S.B. Engineering Associates (Neutral Citation: 2026:MPHC-JBP:31454)
Appearances:
Appellant: Ravindra Singh Chhabra, Senior Advocate, Praneesha Nayyar, Rashmeet Kaur, Jubin Prasad Advocates.
Respondent: Om Prakash, Devendra Singh, Advocates.