Bombay High Court
Jindal Steel Limited vs India Coke And Power Private Limited on 4 March, 2026
Digitally
signed by
SHAGUFTA
SHAGUFTA
2026:BHC-OS:5537
QUTBUDDIN
QUTBUDDIN PATHAN
PATHAN Date:
2026.03.04
16:07:52 CARBP-L-5605-2026.doc
+0530
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
IN ITS COMMERCIAL DIVISION
COMMERCIAL ARBITRATION PETITION (LODGING) NO.5605 OF 2026
WITH
INTERIM APPLICATION (LODGING) NO.5620 OF 2026
IN
COMMERCIAL ARBITRATION PETITION (LODGING) NO.5605 OF 2026
Jindal Steel Limited (Formerly known as
Jindal Steel and Power Limited)
A Company registered under the
Companies Act, 1956, having its
registered office at O.P. Jindal Marg,
Hissar, HISAR, Haryana, ...Petitioner/
India-125 005 Applicant
Versus
India Coke And Power Private Limited,
A Company registered under
Companies Act, 1956 having its
registered office at 904, Windfall,
Sahar Plaza Complex, Andheri-Kurla Road,
Andheri-East, Mumbai, Maharashtra-400059 ...Respondent
------------
Mr. Darius J. Khambata, Senior Advocate a/w Mr. Shyam Kapadia
(Through V.C.), Ms. Shalaka Patil, Mr. Ketan Gaur, Mr. Ankit Pathak, Mr.
Neil Chatterjee, Ms. Nidhisha Garg, Ms. Saumya Sinha, Mr. Ayush
Chaturvedi, Mr. Naman Joshi, Mr. Rahul Chahar, Mr. Shivam Gera, Ms.
Ekta Gupta, Ms. Neha Maniktala and Mr. Manish Kharbanda i/b Trilegl for
the Petitioner/Applicant
Mr. Venkatesh Dhond, Senior Advocate a/w Mr. Shashwat Singh Sawno,
Mr. Abhiraj Rao, Mr. Rahul Kanojia (Through V.C.) and Ms. Aanchal Gupta
for the Respondent
------------
CORAM : SHARMILA U. DESHMUKH, J.
RESERVED ON : 26th FEBRUARY 2026
PRONOUNCED ON : 4th MARCH 2026
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JUDGMENT :
1. The present Petition is filed under Section 34 of the Arbitration
and Conciliation Act, 1996 (for short, “the Arbitration Act“), seeking to
challenge the order dated 21st December 2025 passed by the Arbitral
Tribunal comprising of the sole Arbitrator in MCIA/Arb/116/2024,
terming the order as Interim Award. The alternate prayer is to set aside
the impugned Interim Award dated 21 st December 2025 in respect of
the issue as to whether the business confirmation dated 31 st January
2024 constitutes a binding and enforceable agreement between the
parties and alternatively, to remand the Interim Award under Section
34(4) of the Arbitration Act for fresh adjudication, by permitting the
parties to lead oral evidence.
2. A preliminary objection has been raised as to the maintainability
of the petition by Mr. Dhond, learned Senior Advocate appearing for
the Respondent, contending that the impugned order is passed under
Section 16 of the Arbitration Act, and does not constitute an Interim
Award.
3. As maintainability was questioned, with consent, the Petition
was taken up for hearing on the preliminary objection.
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FACTUAL MATRIX:
4. The relevant facts are that on 7th August 2024, the Respondent
issued a Request for Arbitration (“RFA”) to the Mumbai Centre for
International Arbitration (“MCIA”) against the Petitioner under the
arbitration agreement contained in five contracts dated 17 th October
2023, 10th January 2024, 17th January 2024, 22nd January 2024, and 21st
June 2024. In respect of Business Confirmation dated 31 st January,
2024, the RFA states that certain disputes arose between the parties
and the arbitration clause contained in the contract dated 22 nd
January, 2024 has been incorporated by reference in the Business
Confirmation dated 31st January, 2024.
5. On 7th August 2024, the Petitioner responded to the RFA
opposing the consolidated reference to arbitration sought in the RFA
under the five contracts and denying all averments raised in the RFA.
On 26th November 2024, the MCIA notified the appointment of Sole
Arbitrator. On 4th August 2025, the Learned Sole Arbitrator framed the
issues in the arbitration. Relevant for our purpose are Issue Nos. 4 and
5, which read as under:
“(4) Whether the business confirmation dated 31 st
January 2024 constitutes a binding and enforceable contract
between the parties?
(5) Whether the Tribunal has jurisdiction to adjudicate
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CARBP-L-5605-2026.docdisputes arising out of the business confirmation dated 31 st
January 2024?”
6. On 12th April 2025, the Petitioner filed an application under
Section 16(1) of the Arbitration Act, raising an objection to the
Tribunal’s jurisdiction in respect of disputes purportedly arising out of
the Business Confirmation dated 31st January 2024. The prayers in the
application read as under:
(a) Allow the present Application under Section 16(1) of the
Arbitration and Conciliation Act, 1996.
(b) Declare that no arbitration agreement exists in respect of the
Business Confirmation dated 31.01.2024.
(c) Dismiss the claims in the Statement of Claim that purportedly arise
from the said Business Confirmation dated 31.01.2024 for lack of
jurisdiction.
7. In reply, the Respondent interalia raised preliminary objection
that the jurisdictional objection cannot be decided as pure questions of
law, at this stage, without oral and documentary evidence, and that
incorporation by reference of the arbitration clause is a triable mixed
question.
8. Vide order dated 21st December 2025, the Learned Sole
Arbitrator held that the emails exchanged between the parties
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confirming the business constitutes a concluded contract and the
Business Confirmation incorporates by reference the terms of the
contract dated 22nd January 2024. It held that it had the jurisdiction in
the matter and dismissed the application. In light of the findings in
favour of the Respondent, the Learned Sole Arbitrator declined to go
into the Respondent’s plea that the application requires evidence and
the decision be deferred to final adjudication.
9. The Arbitration proceeded further and on 9 th February 2026,
during the cross-examination of the Respondent’s witness by the
Petitioner, the questions put to the witness on the binding nature of
the Business Confirmation were objected by the Respondent on the
ground that the issue stands concluded by the order dated 21 st
December, 2025 passed under Section 16 of Arbitration. The objection
was upheld by the Learned Sole Arbitrator, hence the present Petition
came to be filed terming the impugned order dated 21st December,
2025 as Interim Award.
SUBMISSIONS:
10. Mr. Khambhata, learned Senior Advocate appearing for the
Petitioner submits that under Section 31(6) of the Arbitration Act, the
Arbitral Tribunal is entitled to make an interim arbitral award on any
matter with respect to which it may make a final arbitral award. He has
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drawn attention of this Court to the provisions of Section 2(1)(c) to
contend that an arbitral award includes an Interim Award and,
therefore, even an Interim Award can be challenged under Section 34
of the Arbitration Act. He submits that there can be no quarrel with
the position that an order passed under Section 16 determining
incorporation of arbitration agreement would be an order on
jurisdiction which cannot be challenged under Section 34 of the Act.
He submits that, however, in the present case, the Learned Sole
Arbitrator has proceeded to conclusively decide Issue No 4 framed in
the Arbitration and the finding is on merits of the matter and as a
consequence an Interim Award amenable to challenge under Section
34 of the Act.
11. He submits that the application under Section 16 sought a ruling
on the Arbitrator’s jurisdiction and there was no question of leading
any evidence at that stage. He submits that though the jurisdictional
objection was based on the Business Confirmation of 31 st January 2024
not being a concluded contract, the relief sought was specific to the
Arbitrator’s jurisdiction. He has taken this Court to the objection raised
during cross examination and the Learned Arbitrator’s ruling on the
objection to contend that having held that the issue of binding nature
of the Business Confirmation stands concluded by the order of 21 st
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December 2025, the Issue No 4 stands decided which constitutes an
Interim Award within the meaning of Section 2(1)(c) of the Arbitration
Act, drawing support from the decision of the Hon’ble Apex Court in
the case of Indian Farmers Fertilizer Co-operative Limited (`IFFCO’) v.
Bhadra Products1.
12. He submits that it was the Respondent’s own case in reply to
Section 16 application that the issue whether there is concluded
contract is fact laden requiring evidence and should be deferred to the
final adjudication.
13. He submits that one of the contentions raised was in respect of
non existence of arbitration agreement in the Business Confirmation
and that the notice of arbitration is silent on the Business
Confirmation, which was required to be adjudicated by the Learned
Arbitrator under Section 16.He submits that the Arbitral Tribunal’s
findings that Business Confirmation dated 31st January 2024 is a
binding and concluded contract is ex facie illegal. He submits that the
Learned Arbitrator has opined that the draft contract itself constituted
in line confirmation sought in the Business Confirmation when neither
the email of 31st January, 2024 nor the draft contract is indicative that
it is in line confirmation. He submits that the impugned order
ignores the established practice of execution of formal contract
1 (2018) 2 SCC 534
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and that the draft contract itself required signing. In support he relies
upon the following decisions:
(i) IFFCO’) v. Bhadra Products (supra)
(ii) National Thermal Power Corpn. Ltd. v. Siemens
Atkeingesellschaft2
14. Mr. Dhond, learned Senior Advocate appearing for Respondent
submits that the impugned order passed under Section 16 of the Act is
not an Interim Award under Section 31(6) of the Act and hence can be
challenged after the final award has been passed. He submits that even
if the jurisdictional objection is accepted effectively determining that
no claim sustains, the only remedy available to the aggrieved party is
an appeal under Section 37 and not under Section 34. He submits that
under Section 16(1) when there is challenge to the existence or validity
of the arbitration agreement, Section 34 has no application.
15. He submits that the jurisdictional objection in the present case
was intertwined with the aspect of existence of the parent contract. He
submits that in view of the specific case put forth by the Petitioner,
under Section 16, the arbitral tribunal had the statutory competence to
rule on its own jurisdiction including the objections with respect of
2 (2007) 4 SCC 451
3 (2024) 1 High Court Cases (Cal) 675
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existence of arbitration agreement and validity of the underlying
parent contract. He submits that it was the Petitioner’s own case that
there is no arbitration agreement as there is no concluded contract
between the parties driving the Arbitral Tribunal to rule on the
jurisdictional objection by considering whether the Business
Confirmation was concluded contract. He would submit that in view of
the arguments canvassed, the learned Arbitrator has considered the e-
mails making the offer and confirming the business as constituting a
concluded contract. He submits that the Petitioner took a chance and
invited a finding on the concluded contract and is now bound by the
findings of the Tribunal which cannot be re-adjudicated. He submits
that in the course of cross-examination, the questions put on the
binding effect of business confirmation were rightly refused in view of
the said issue being concluded. He submits that having invited a
finding, the Petitioner now cannot term the findings as Interim Award
and would have to await the outcome of the final adjudication. He
submits that it was the Petitioner’s own decision to not apply for oral
evidence and argue on basis of documents.
16. He submits that the decision of IFFCO v. Bhadra Products
(supra), is distinguishable on facts as the Hon’ble Apex Court was
dealing with the order of dismissal of the claim on the ground of
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limitation and it was not a case of an application under Section 16. He
submits that the Hon’ble Apex Court held that the award which does
not relate to the Arbitral Tribunal’s own jurisdiction under Section 16
does not have to follow the drill of Sections 16(5) and (6) of the Act. He
submits that in fact, the decision in IFFCO vs. Bhadra Products (supra)
supports the Respondent as the Hon’ble Apex Court considered that
Section 16 deals with the Arbitral tribunal’s jurisdiction in the narrow
sense of ruling on objections with respect to existence or validity of
the arbitration agreement.
17. He would submit that in the decision of National Thermal Power
Corpn. Ltd. (supra), the rejection of the counter claim was on the
ground of the settlement entered into between the parties and is not a
decision rendered in the context of Section 16 of the Act. He submits
that the Hon’ble Apex Court expressly held that the plea opposing the
counter claim was not raised in context of lack of jurisdiction under
Section 16. He would point out the findings of the Hon’ble Apex Court
that the decision rejecting a claim on basis of settlement, or barred by
limitation or non maintainability constitutes adjudication on merits and
does not amount to refusal to exercise jurisdiction under Section 16.
18. He would submit that the decision of the Calcutta High Court in
AP-COM No 677 of 2024 is of no avail as the Division Bench has set
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aside the said order holding that it does not consider the order of
Arbitrator as an Interim Award. In support, he relies upon the
following decisions :
(i) M. S. Commercial & Ors. vs. Calicut Engineering Works
Ltd.4
(ii) Sterling Industries vs. Jayprakash Associates Ltd. & Ors.5
(iii) Lindsay International Pvt. Ltd. vs. IFGL Refractories Ltd. 6
19. In rejoinder, Mr. Kapadia, learned counsel for Petitioner would
distinguish the judgments relied upon by Mr. Dhond and would submit
that in proceedings under Section 16, what is required to be tested is
the existence or validity of the Arbitration Agreement and in the
present case, the learned Arbitrator has decided Issue no. 4 which was
an issue in dispute. He submits that the Petitioner’s argument was also
in the context of the incorporation of terms of the earlier contract by
reference and the learned Arbitrator could have decided the issue of
existence of the Arbitration Agreement.
Reasons and Analysis:
4 (2004) 10 SCC 656
5 (2021) 18 SCC 367
6 2022 SCC OnLine Cal 1880
7 2022 SCC OnLine Ker 3489SQ Pathan 11/24
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20. The maintainability of the Petition under Section 34 of
Arbitration Act would depend on the question as to whether the
impugned order dated 21st December, 2025 is a decision on merits of
the dispute so as to qualify as an Interim Award. Section 31(6) of the
Arbitration Act permits making of an Interim Award on any matter with
respect to which it may make a final arbitral award and Section 2(1)(c)
defines arbitral award to include an Interim Award.
21. Prior to the filing of the application under Section 16 of
Arbitration Act, the Learned Arbitrator had framed the issues in
arbitration including Issue No 4 as to whether the Business
Confirmation dated 31st January, 2024 constitutes a binding and
enforceable contract between the parties. The averments in the
application under Section 16 sought the specific relief of declaration
that no arbitration agreement exists in respect of Business
Confirmation dated 31st January, 2024. The application pleaded two
issues firstly that the Business Confirmation never gave rise to any
arbitration agreement and secondly no concluded or binding contract
arose from the Business Confirmation.
22. In paragraph 4, it was averred that the Claimant relies on a
generic and vague phrase in the business confirmation to contend that
the arbitration clause from a prior contract stands incorporated and
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that no valid arbitration agreement arises from the Business
Confirmation dated 31st January, 2024. In paragraph 11, it was pleaded
that no valid or enforceable contract for supply of LAM coke arose
from the issuance of the Business Confirmation dated 31 st January,
2024. In paragraph 13 it is pleaded that the Tribunal does not have
jurisdiction to entertain or adjudicate the claims arising out of the
Business Confirmation that never culminated into an independent
contract and no arbitration agreement exists in relation to the
Business Confirmation nor have the parties consented to submit the
disputes arising out of the same to the jurisdiction of the Tribunal.
23. The parties were alive to the fact that the Petitioner’s
application was filed under Section 16 of the Arbitration Act. Section
16 embodies the principle of Kompetenz Kompetenz permitting the
Arbitrator to rule on its own jurisdiction with respect to the existence
or validity of the arbitration agreement. Section 16(1)(a) and (b)
provides that for that purpose an arbitration clause which forms part
of a contract shall be treated as an agreement independent of the
other terms of the contract and a decision by the arbitral tribunal that
the contract is null and void shall not entail ipso jure the invalidity of
the arbitration clause. The statutory provision recognizes the concept
of separability between the arbitration clause from the underlying
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contract and admits of two independent contracts i.e. the parent
contract and the arbitration agreement. In Enercon (India) Ltd vs
Enercon GmbH8, the Hon’ble Apex Court held in paragraph 83 as under:
“83. The concept of separability of the arbitration clause/agreement from
the underlying contract is a necessity to ensure that the intention of the
parties to resolve the disputes by arbitration does not evaporate into thin air
with every challenge to the legality, validity, finality or breach of the
underlying contract. The Indian Arbitration Act, 1996, as noticed above,
under Section 16 accepts the concept that the main contract and the
arbitration agreement form two independent contracts. Commercial rights
and obligations are contained in the underlying, substantive, or the main
contract. It is followed by a second contract, which expresses the agreement
and the intention of the parties to resolve the dispute relating to the
underlying contract through arbitration. A remedy is elected by parties
outside the normal civil court remedy. It is true that support of the national
courts would be required to ensure the success of arbitration, but, this would
not detract from the legitimacy or independence of the collateral arbitration
agreement, even if it is contained in a contract, which is claimed to be void or
voidable or unconcluded by one of the parties.” (Emphasis supplied)
24. The Arbitral Tribunal under Section 16 is tasked with the inquiry
into the existence or validity of the arbitration agreement. The
application under Section 16, even if pleaded, that there was no valid
or enforceable contract arising from the Business Confirmation, the
remit of inquiry under Section 16 was in a narrow sense of determining
the existence or validity of an arbitration agreement. Paragraph 4.7 of
8 (2014) 5 SCC 1
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CARBP-L-5605-2026.docthe RFA seeks reference of the dispute under the Business
Confirmation by invoking the doctrine of incorporation by reference of
arbitration agreement which existed in Contract No 4. Paragraph 4 of
the application under Section 16 assails the incorporation by reference
on the ground that the phrase contained in the Business Confirmation
neither refers to any specific agreement nor does it reflect any intent
to import the arbitration clause from the fourth contract. The stated
rival contentions formed the substratum of the issue which was
required to be decided by the Learned Arbitrator. Section 7(5) of the
Arbitration Act speaks of the reference in a contract to a document
containing an arbitration clause to constitute an arbitration agreement
if the contract is in writing and the reference is such as to make that
arbitration clause part of the contract.
25. The Learned Arbitrator was thus required to consider whether
there was arbitration agreement by reference. Under Section 16 of the
Arbitration Act, in facts of the present case, the Learned Arbitrator was
called upon to decide whether the specific phrase in the Business
Confirmation constitutes an arbitration agreement applying the
doctrine of incorporation by reference irrespective of whether the
Business Confirmation constitutes a binding and enforceable contract. I
am unable to accept the contention of Mr. Dhond that the issue of
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to be decided in the application when viewed in light of the RFA. Even
if the application under Section 16 contained pleadings about the
Business Confirmation not being a binding contract, the ruling on
jurisdiction did not require the Learned Arbitrator to go into the said
issue as the existence of arbitration agreement was dependent on the
interpretation of the term contained in the Business Confirmation that
“all other terms shall be same as per last contract of 50KT.”
26. It was the Respondent’s own contention that the jurisdictional
issue was fact laden and ought to be deferred to the final adjudication.
The Petitioner chose not to lead any evidence and argued the matter
on the basis of the documents evidently considering that the remit was
inquiry was confined to the existence of arbitration agreement. The
adjudication of the application under Section 16 can result only in a
ruling on the jurisdiction with respect of existence or validity of
arbitration agreement and cannot be accepted as a conclusive finding
on merits of the dispute. The Statement of Claim in paragraph 62
claims that due to refusal to perform obligation under the Business
Confirmation dated 31st January, 2024, which constitutes a valid and
enforceable agreement, the demand notice was sent citing breach of
contractual obligations and sought damages. The Statement of
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Defence raised a categorical denial to the claim of the Business
Confirmation being binding and enforceable contract. The Learned
Arbitrator is presumed to be conscious of the fact that the issue as
regards the binding nature of the Business Confirmation is an issue
framed in arbitration. Issue No 4 thus constituted an issue in dispute
and the finding of the Learned Arbitrator on the binding nature of the
Business Confirmation transgressed into the prohibited arena of merits
of the dispute.
27. The objection of the Respondent raised during the cross
examination acknowledges that the issue has been adjudicated in the
order in Section 16 application and that the Petitioner had applied for a
ruling on jurisdiction and not for an Interim Award. Before this Court
also, the preliminary objection on maintainability of the petition in
effect recognizes that the order of 21st December 2025 is a ruling on
jurisdiction. Having acknowledged the said position, the Respondent
cannot contend that the impugned order finally determines the
binding nature of the Business Confirmation, which cannot be re
adjudicated. The issue as to whether the Business Confirmation
constitutes a concluded contract will necessarily require evidence to be
led and cannot be decided on the basis of documents, which fact is also
accepted by the Respondent.
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28. Perusal of the impugned order will indicate the
compartmentalized findings of the Learned Arbitrator: one in respect
of the binding nature of the Business Confirmation and other in
respect of existence of the arbitration agreement. There is no finding
which rests the existence of the arbitration agreement on the finding
of the Business Agreement being binding and concluded contract. I am
therefore not inclined to accept the submission of Mr. Dhond that
finding an existence of arbitration agreement required a finding on
binding nature of Business Confirmation dated 31 st January, 2024. It
was not necessary for the Learned Arbitrator to venture into the issue
which touched the merits of the dispute and render a finding even if
argued by the Petitioner as the adjudication under Section 16 is limited
to the jurisdictional aspect. The impugned order renders dual findings
one on jurisdictional aspect and other on merits of the dispute.
29. Insofar as the decisions relied upon by Mr. Dhond are concerned,
in M. S. Commercial & Ors. vs. Calicut Engineering Works Ltd. (supra),
the Petitioners therein claimed that there was no arbitration
agreement between the parties, which issue was dependent on
whether or not the Petitioner had signed the documents which
purportedly contained the arbitration clause. The Arbitrator appointed
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the handwriting expert and rejected the application raising objection
to its jurisdiction. After the decision was given, the Petitioners filed an
application seeking permission to cross-examine the handwriting
expert. It is in this factual scenario that the Hon’ble Apex Court held
that once arbitrator has taken a decision that there is an arbitration
agreement, then by virtue of Section 16(5) of the Arbitration Act, the
Arbitrator was bound to continue with the arbitration proceedings and
make an arbitral award. The facts of the case are distinguishable as
what was sought by the Petitioner therein was a reopening of the
decision of the arbitrator that there was an arbitration agreement,
where in the present case, what the Petitioner herein had sought at
the stage of cross-examination was permission to cross-examine the
witness on the issue of not the existence of the arbitration agreement,
but the non-existence of a concluded contract, which issue could not
have been said to have attained finality in the order passed under the
application filed under Section 16(5).
30. In Sterling Industries vs. Jayprakash Associates Ltd. & Ors.
(supra), the Hon’ble Apex Court has reiterated the well-settled
principle that the application was not tenable, which challenged the
Section 16 order on the ground that it was a partial award. There is no
quarrel with the said proposition.
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31. In the case of Lindsay International Pvt. Ltd. vs. IFGL
Refractories Ltd. (supra), the dismissal of the Petitioner’s application
under Section 16 was challenged under Section 34 of the Arbitration
Act. In that case, a question of maintainability was raised and the
argument was that while considering the scope of the existence of the
arbitration agreement, there has been a categorical finding that there
has been no novation of the earlier contract between the parties by
virtue of subsequent Memorandum of Understanding and by reason of
such finding, the counterclaim of the Petitioner would become
infructuous, since the stand of the Petitioner before the arbitrator was
that the arbitration agreement between the parties was novated by
the subsequent MOU. The response of the Respondents therein was
that the claimant had not made any claim on the alleged
novation/supersession of the agreement by the subsequent MOU.
32. The learned Single Judge considered the case of the Petitioner
that the arbitrator has given finding on one of the primary disputes
between the parties and that, in rejecting the contention of novation,
the arbitrator prejudged the issue Nos. 5 and 6 framed in the
arbitration proceedings, which dealt with, whether the termination of
the MOU by the claimant was justified and whether there was any
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breach of the MOU by the Petitioner. The learned Single Judge noted
the factual position therein that the issue Nos. 5 and 6 were framed by
the arbitrator after the impugned decision and rejected the said
contention. It also held that an order passed under Section 16(5) is an
order on jurisdiction simpliciter and in essence, such order would
precede an order on the merits of the claim. It noted that the decision
rejected the Petitioner’s application by holding that there was no merit
in the application under Section 16 of the Arbitration Act, and the
impugned decision does not state in any part thereof that it has
considered or adjudicated on the merits of the dispute contained in
the pleadings before the tribunal as on that date, namely, the
statement of claim of IFGL. It further noted that the statement of claim
sought payment received by the Petitioner from other company as
price of goods and default award for the amount of sales tax payable
and the impugned decision, constitute a partial award, must have
considered and adjudicated on either of the claims in statement of
claim of IFGL. It was further noted that none of the claims of IFGL deals
with the issue of novation or supersession of the arbitration
agreement and the decision could only have been confined to the
statement of filed by IFGL, since the Petitioner’s counterclaim was not
before the arbitrator at the relevant point of time.
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33. This is a distinguishing feature in the said decision, as at that
point of time, the counterclaim of the Petitioner therein was not
before the arbitrator and the statement of claim did not seek any relief
as regards the alleged novation/supersession of the agreement by the
subsequent MOU. It is in these facts that the learned Single Judge held
that the arbitrator has not transgressed into the arena of dispute
between the parties. In the present case, the arbitrator has, in an order
under Section 16 adjudicated the specific issue No. 4, which was
framed, and rendered a finding, which it could not have done under
Section 16 of the Arbitration Act. The very concept of an Interim
Award contemplates the claim of the parties and contains a decision on
the same, which is different from ruling on the existence or validity of
an arbitration agreement. In the case of Lindsay International Pvt.
Ltd. vs. IFGL Refractories Ltd. (supra), the learned Single Judge held
that the order is an order on jurisdiction, bereft of the depth and detail
of part adjudication on the merits of the claim. It specifically held that
the arbitrator therein did not decide any claim made by the claimant
therein. The facts are completely distinguishable and the decision
does not assist the Respondent.
34. In the case of Anto Augustine & Anr. vs. Girish Koshy George &
Ors. (supra), the issue of jurisdictional bar was raised, and one of the
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grounds was that there was no valid agreement between the parties.
The Kerala High Court held that after rendering of the award, the party
aggrieved can challenge the same by filing an application under Section
34 of the Arbitration Act and can raise all issues, including jurisdictional
bar issue. The said decision is not an authority for the proposition that
irrespective of the order under Section 16 deciding the merits of the
claim, the same cannot be challenged by way of Section 34.
CONCLUSION:
35. In light of the above discussion, as the impugned order was
passed under Section 16 of the Arbitration Act, it is not open for the
Petitioner to challenge the order to the extent of upholding the
jurisdiction of the Learned Arbitrator under Section 34 of the
Arbitration Act, and the ruling on jurisdiction is required to be
challenged along with the final Award. As the binding nature of the
Business Confirmation dated 31st January, 2024 was not a jurisdictional
issue but an issue on merits of the dispute, the Learned Arbitrator
under Section 16 of the Arbitration Act could not have rendered any
conclusive findings touching the merits of the claim. The arbitral
autonomy under Section 5 of the Arbitration Act will not come in the
way of deciding whether the Learned Arbitrator could have rendered
conclusive findings on merits of dispute under Section 16, as the
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legislative scheme of Section 16 permits the Learned Arbitrator to rule
only on its jurisdiction in respect of the aspect of existence or validity
of the arbitration agreement. The Petitioner could not be deprived of
its right to lead evidence on the issue of whether the Business
Confirmation dated 31st January, 2024 constituted a concluded
contract or not in light of the position that such issue was fact-laden,
by going into the validity of such finding in present petition. The
Petition is partly allowed by holding that the findings in the impugned
order dated 21st December, 2025 as regards the binding nature of the
Business Confirmation dated 31st January, 2024 are not conclusive
findings.
36. Interim Application do not survive for consideration and stands
dismissed.
[SHARMILA U. DESHMUKH, J.]
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