Court emphasizes minimal judicial interference in arbitration, directing aggrieved parties to pursue statutory appeal under Section 37 rather than writ petitions.
In a significant judgment dated October 9, 2026, the Madhya Pradesh High Court (Division Bench, Jabalpur) adjudicated a complex dispute between Madhya Pradesh Road Development Corporation Limited (MPRDC) and Viva Highways Limited concerning the jurisdictional authority in arbitration proceedings under the Arbitration and Conciliation Act, 1996.
The dispute arose from a concession agreement entered into in 2001, relating to the widening, strengthening, and maintenance of a section of State Highway No. 27 on a Build, Operate and Transfer basis. A conflict between the parties led to invocation of arbitration in 2017 by Viva Highways Limited. MPRDC contested the jurisdiction of the arbitrator, asserting that the matter fell exclusively within the purview of the Tribunal constituted under the Madhya Pradesh Madhyastham Adhikaran Adhiniyam, 1983 (the Act of 1983).
Earlier, a Full Bench of the Madhya Pradesh High Court had held that disputes arising out of such concession agreements, considered "works contracts," were to be adjudicated by the Tribunal under the Act of 1983. This was affirmed by the Supreme Court of India in 2018. Despite this, arbitration was initiated under the Arbitration and Conciliation Act, 1996 (the Act of 1996), and an arbitrator was appointed under Section 11 of the Act of 1996.
MPRDC challenged the arbitrator's jurisdiction under Section 16 of the Act of 1996, but these objections were initially dismissed, leading to a writ petition that directed the arbitrator to decide jurisdiction as a preliminary issue. The arbitrator eventually ruled against MPRDC, holding that he had jurisdiction to adjudicate the dispute.
MPRDC thereafter filed an application under Section 34 of the Act of 1996 to set aside the order on jurisdiction, which the Commercial Court rejected on the ground that such an application was premature since the arbitration proceedings had not concluded. The court held that the decision on jurisdiction did not amount to an arbitral award amenable to challenge under Section 34 at that stage.
The Madhya Pradesh High Court, however, examined this rejection of the Section 34 application in detail. It observed that once the arbitrator finally decides the jurisdictional issue as a preliminary matter, such a decision assumes the character of an interim award, which is challengeable under Section 34. The Court relied heavily on the Supreme Court's jurisprudence, including key rulings in MCM Worldwide Private Limited v. Construction Industry Development Council and IFFCO Ltd. v. Bhadra Products, which clarify that interlocutory decisions on jurisdiction by arbitrators are to be treated as interim awards.
Moreover, the Court emphasized the legislative intent of the Arbitration and Conciliation Act, 1996, which mandates minimal judicial interference in ongoing arbitration proceedings. It reiterated that writ petitions under Articles 226 and 227 of the Constitution challenging arbitration orders are to be entertained only in exceptional cases involving patent lack of jurisdiction or jurisdictional defects glaring on the face of the record.
Accordingly, the Court held that the appropriate remedy against the rejection of a Section 34 application is a statutory appeal under Section 37 of the Act of 1996, not a writ petition. Since MPRDC had a statutory alternative remedy available, the writ petition filed under Article 226 was not maintainable and was dismissed.
The judgment thus underscores the principle of minimal judicial intervention and clarifies the procedural route for challenging arbitration jurisdiction decisions, ensuring expeditious resolution of disputes and adherence to the statutory framework.
Bottom Line:
Arbitration - Order of Arbitrator deciding jurisdiction as a preliminary issue pursuant to direction of High Court held to partake character of interim award - Commercial Court erred in holding Section 34 application not maintainable - However, writ petition against such order not maintainable when statutory appeal under Section 37 is available - In arbitration matters, writ jurisdiction is to be exercised with extreme circumspection in view of policy of minimal judicial interference.
Statutory provision(s):
Arbitration and Conciliation Act, 1996 - Sections 5, 8, 9, 11, 16, 29A, 31, 34, 37;
M.P. Madhyastham Adhikaran Adhiniyam, 1983;
Constitution of India - Articles 226, 227.
