LALIT KALA AKADEMI Vs. SVAPAN CONST AE

JUDGEMENT

(1.) This is an application under Section 34 of the Arbitration and Conciliation Act, 1996 made on behalf of the applicant - Lalit Kala Akademi, for setting aside the award of the Sole Arbitrator dated 10.5.1999. The main grounds set up for setting aside the award are as under:

(2.) Learned Countse for the petitioner submits that at the beginning of the arbitral proceedings, i.e. soon after receiving a notice from the Arbitrator, the petitioner had sent a communication dated 7.8.1998 to the Arbitrator objecting to the jurisdiction of the arbitrator to enter upon the reference and to hold the arbitral proceedings and to make an award more particularly in view of the provisions of Section 1(3) of the Lalit Kala Akademi (Taking Over of Management) Act, 1997 (Act No. 17 of 1997) (in short the 'Act')- The Arbitrator, as it would appear from the proceedings and the award, overlooked those basic objections which can be said to be objections within the meaning of Section 16 of the Arbitration and Conciliation Act, 1996 and proceeded with the arbitral proceedings and made and published the impugned award. Section 16 of the 1996 Act confers the power on the Arbitral Tribunal to rule on its jurisdiction including ruling on any objection with respect to the existence or validity of the arbitration agreement. In other words, this section casts an obligation on the Arbitral Tribunal to consider and answer any objection in regard to its jurisdiction and existence or validity of arbitration agreement.

(3.) In this view, I am fortified by the Constitution Bench decision of the Hon'ble Supreme Court in the case or Konkan Railways Corporation Limited and Another v. Rani Construction Pvt. Ltd., I (2002) CLT 177 (SC)=I (2002) SLT 533=(2002)2 SCC 388. In that case the Hon'ble Supreme Court had the occasion to morefully consider the ambit and scope of the power of the Chief Justice or his nominee while deciding an application under Section 11 of the Arbitration and Conciliation Act, 1996. In that case the Apex Court observed that Section 16 of the Act empowers the Arbitral Tribunal to rule on its jurisdiction and the expression 'that the Arbitral Tribunal may rule on any objections with respect to the existence or validity of the arbitration agreement' shows that the Arbitral Tribunal's authority under Section 16 is not confined to the width of its jurisdiction, but goes to the very root of its jurisdiction. It is, therefore, open for any party to challenge before the Arbitral Tribunal that it had been wrongly constituted. Since this Court cannot go into or decide any controversial question raised by the parties as the same falls under the domain of the Arbitrator, there is no escape from the conclusion that the present petition deserves to be allowed and an Arbitrator needs to be appointed to settle the disputes/differences between the parties.