M/S MSP INFRASTRUCTURE LTD. versus M.P. ROAD DEVL. CORP. LTD.

Citation: [2014] 13 S.C.R. 1331 · Decided: 05-12-2014 · Supreme Court of India · Bench: JASTI CHELAMESWAR · Disposal: Appeal(s) allowed

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Judgment (excerpt)

[2014] 13 S.C.R. 1331 
M/S MSP INFRASTRUCTURE LTD. 
v. 
M.P. ROAD DEVL. CORP. LTD. 
(Civil Appeal No. 10778 of 2014) 
DECEMBER 05, 2014 
[J. CHELAMESWAR AND S. A. BOBDE, JJ.] 
Arbitration and Conciliation Act, 1996: s. 16 - Whether 
A 
B 
a party to an arbitration proceeding may be permitted to raise 
objections u/s. 34 with regard to the jurisdiction of the Arbitral C 
Tribunal after the stage of submission of written statement-
Respondent filed a petition uls. 34 for setting aside the 
arbitration award -After two years, he filed an application to 
amend the original petition uls. 34 raising the question of 
jurisdiction of Tribunal - Application dismissed by Session D 
Judge but allowed by the High Court- Held: A party is bound, 
by virtue of sub-section (2) of s. 16, to raise any objection it 
may have to the jurisdiction of the Tribunal before or at the 
time of submission of its statement of defence, and at any 
time thereafter it is expressly prohibited - Amendment E 
application raised a ground which was contrary to law and 
ought not to have been allowed by High Court. 
Public policy- Held: Where the question arises out of 
a conflict between an action under a State Law and an action F 
under a Central Law, the term public policy of India must 
necessarily understood as being referable to the policy' of 
the Union. 
Allowing the appeal, the Court 
HELD: 1. Section 16 mandates that a plea that the G 
Tribunal does not have jurisdiction shall not be raised 
later than the submission of the statement of defence. 
This provision disables a party from petitioning an 
Tribunal to challenge its jurisdiction belatedly, having 
1331 
H 
1332 
SUPREME COURT REPORTS 
[2014] 13 S.C.R. 
A submitted to the jurisdiction of the Tribunal, filed the 
statement of defence, led evidence, made arguments and 
ultimately challenged the award under Section 34 of the 
Arbitration Act, 1996. This is exactly what has been done 
by the Respondent Corporation. They did not raise the 
B question of jurisdiction at any stage. They did not raise 
it in their statement of defence; they did not raise it at 
any time before the Tribunal; they suffered the award; 
they preferred a petition under Section 34 and after two 
years raised the question of jurisdiction of the Tribunal. 
c The mandate of Section 34 clearly prohibits such a cause. 
A party is bound, by virtue of sub-section (2) of Section 
16, to raise any objection it may have to the jurisdiction 
of the Tribunal before or at the time of submission of its 
statement of defence, and at any time thereafter it is 
D expressly prohibited. Suddenly, it cannot raise the 
question after it has submitted to the jurisdiction of the 
Tribunal and invited an unfavourable award. It would be 
quite undesirable to allow arbitrations to proceed in the 
same manner as civil suits with all the well-known 
E drawbacks of delay and endless objections even after 
the passing of a decree. [Para 14][1338-D-H; 1339-A-D] 
2. There is nothing to warrant the inference that all 
objections to the jurisdiction of the Tribunal cannot be 
raised under Section 16 and that the Tribunal does not 
F have power to rule on its own jurisdiction. Secondly, 
Parliament has employed a different phraseology in 
Clause (b) of Section 34. That phraseology is "the subject 
matter of the dispute is not capable of settlement by 
arbitration." This phrase does not necessarily refer to 
G an objection to 'jurisdiction' as the term is well known. 
H 
In fact, it refers to a situation where the dispute referred 
for arbitration, by reason of its subject matter is not 
capable of settlement by arbitration at all. [Para 16] 
[1340-F-H] 
M/S MSP INFRASTRUCTURE LTD. v. M.P. ROAD DEVL. 
1333 
CORP. LTD. 
Boaz Allen and Hamilton Inc. v. SB/ Home Finance 
A 
Limited and Ors. (2011) 5 SCC 532: 2011 (7) SCR 
310 - relied on. 
3. All objections to jurisdiction of whatever nature 
must be taken at the stage of the submission of the 
statement of defence, and must be dealt with under 8 
Section 16 of the Arbitration Act, 1996. However, if one 
of the parties seeks to contend that the subject matter 
of the dispute is such as cannot be dealt with by 
arbitration, it may be dealt under Section 34 by the Court. 
It was submitted that it is the public policy of India that C 
arbitration should be held under the appropriate law and 
that unless the arbitration was held under the State Law 
i.e. the M.P. Act that it would be a violation of the public 

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