Court Rules That Objections on Jurisdiction, Limitation, and Maintainability Must Be Raised Before Arbitral Forum, Not Writ Court
In a significant judgment delivered on August 21, 2026, the Bombay High Court (Division Bench) dismissed ITC Limited’s writ petition challenging the jurisdiction of the Metropolitan Stock Exchange of India Limited (MSE) under the Securities and Exchange Board of India’s (SEBI) Online Dispute Resolution (ODR) framework. The petition was filed against communications issued by MSE and Jupitice Justice Technology Private Limited, an ODR Institution empanelled under SEBI’s Master Circular dated July 31, 2023.
ITC Limited contended that MSE lacked jurisdiction to entertain the complaints since its securities were neither listed nor traded on MSE, and argued that the dispute should be resolved by the stock exchange where its securities were actually listed. ITC also raised objections concerning limitation, locus standi, maintainability, and alleged abuse of process due to repeated and similar complaints filed by the complainant over a span of decades.
The High Court held that the writ jurisdiction under Article 226 of the Constitution is not an appellate jurisdiction over arbitral proceedings under the ODR framework. The Court emphasized that objections relating to jurisdiction, limitation, locus, maintainability, and arbitrability must be raised and adjudicated before the arbitral forum constituted under the SEBI Master Circular. Unless there is a demonstrable and patent lack of jurisdiction or authority, the Court will not interfere at the threshold.
The Court noted that the SEBI Master Circular establishes a structured and mandatory dispute resolution mechanism for securities market disputes, including a round-robin allocation system for assigning complaints to Market Infrastructure Institutions (MIIs) like MSE. Although ITC argued that MSE was not the relevant stock exchange for complaint allocation, the Court clarified that the mere fact that ITC’s securities are not listed on MSE does not ipso facto render the allocation invalid. The question of correct allocation and maintainability is a matter for the arbitral forum.
Regarding limitation and res judicata objections, the Court stated that these substantial legal questions must be examined by the arbitral tribunal and are not grounds for quashing the arbitration at inception. The Court also rejected the argument that the age of the dispute (dating back to 1989) invalidated the arbitration, observing that limitation provisions under the Master Circular apply and must be tested by the arbitral forum.
Importantly, the Court underscored that ITC cannot unilaterally refuse participation in the arbitration merely by asserting frivolity or jurisdictional defects. Participation in arbitration proceedings, including payment of fees, is mandatory once conciliation ends without settlement. However, this does not amount to waiver of ITC’s right to raise all objections before the arbitral forum.
The writ petition was dismissed with directions for ITC to comply with the procedural requirements and participate in arbitration within 14 days, without prejudice to its rights to raise all substantive and procedural objections before the competent arbitral forum.
This judgment reinforces SEBI’s ODR mechanism as a robust and integrated framework for resolution of securities market disputes and clarifies the limited scope of High Courts’ writ jurisdiction in such matters.
Bottom Line:
Online Dispute Resolution (ODR) mechanism under SEBI's Master Circular - Jurisdictional objections, limitation, and maintainability of complaints to be raised before the arbitral forum - Writ jurisdiction not to interfere unless there is a patent lack of jurisdiction or authority.
Statutory provision(s):
Article 226, Constitution of India, 1950; Securities and Exchange Board of India (SEBI) Master Circular dated 31.07.2023 (Online Dispute Resolution Mechanism)
ITC Limited v. Metropolitan Stock Exchange, (Bombay)(DB) : Law Finder Doc Id # 2964986
