Question

Read the following statements and choose the correct option in the light of the Arbitration and Conciliation Act, 1996. A dispute arises regarding jurisdiction of the arbitral tribunal. Statement I: The arbitral tribunal may rule on its own jurisdiction. Statement II: A plea that the tribunal lacks jurisdiction shall be raised not later than the submission of the statement of defence, unless the arbitral tribunal permits a later plea.

• A. Only Statement I is true
• B. Both Statements I and II are true
• C. Only Statement II is true
• D. Neither Statement I nor Statement II is true

Hint:

Remember the doctrine of Kompetenz-Kompetenz. It means that the arbitral tribunal has the power to decide whether it possesses jurisdiction. Section 16 of the Arbitration and Conciliation Act is frequently asked in examinations.

Answer 1

The Correct Option is B

Concept: One of the most important principles of modern arbitration law is the doctrine of Kompetenz-Kompetenz. This doctrine recognizes that an arbitral tribunal has the authority to determine its own jurisdiction. The Arbitration and Conciliation Act, 1996 incorporates this principle through Section 16, thereby reducing unnecessary judicial interference and ensuring speedy resolution of disputes. Section 16 enables the arbitral tribunal to decide questions relating to:

• Existence of the arbitration agreement.

• Validity of the arbitration agreement.

• Scope of the arbitration clause.

• Jurisdiction of the arbitral tribunal.

Step 1: Examining Statement I.
Statement I states that the arbitral tribunal may rule on its own jurisdiction. Section 16(1) of the Arbitration and Conciliation Act expressly provides that an arbitral tribunal may rule on its own jurisdiction, including objections regarding the existence or validity of the arbitration agreement. This principle is internationally recognized and forms the foundation of modern arbitration law. Therefore,

Statement I is correct.

Step 2: Examining Statement II.
Statement II states that a plea regarding lack of jurisdiction must be raised not later than the submission of the statement of defence unless the tribunal permits it subsequently. Section 16(2) specifically provides that:

• A jurisdictional objection should ordinarily be raised before or at the time of submission of the statement of defence.

• However, the tribunal may admit a delayed objection if it considers the delay justified.
The purpose of this requirement is to prevent parties from participating in arbitration and raising jurisdictional objections only after proceedings have substantially progressed. Therefore,

Statement II is also correct.

Step 3: Applying the correct option.
Since both statements accurately reflect Section 16 of the Arbitration and Conciliation Act, 1996, the correct answer is: \[ \boxed{\text{(B) Both Statements I and II are true}} \]

The arbitral tribunal is the first authority to determine questions relating to its own jurisdiction.

Answer 2

Section 16 of the Arbitration and Conciliation Act, 1996 gives an arbitral tribunal the power to rule on its own jurisdiction and also fixes when a jurisdictional objection must ordinarily be raised, so each statement should be checked against the text of Section 16 before deciding which combination option is correct.

1. Only Statement I is true: this would require Statement II to be false, but Section 16(2) does in fact require a jurisdictional plea to be raised not later than the submission of the statement of defence, unless the tribunal allows a later plea, so Statement II is also accurate and this option incorrectly discards it.
2. Both Statements I and II are true: Statement I reflects Section 16(1), which lets the tribunal rule on its own jurisdiction, including objections to the existence or validity of the arbitration agreement, embodying the kompetenz-kompetenz principle. Statement II reflects Section 16(2), which fixes the timing for raising a jurisdictional plea, generally no later than the statement of defence, while allowing the tribunal discretion to admit a later plea. Both statements track the section accurately, so this combination is correct.
3. Only Statement II is true: this would require Statement I to be false, but Section 16(1) plainly empowers the tribunal to decide on its own jurisdiction, so Statement I is also true and this option wrongly excludes it.
4. Neither Statement I nor Statement II is true: this option would require both statements to misstate the law, but both are directly supported by the text of Section 16, so this combination cannot be correct.

Because both the power to rule on jurisdiction and the timing requirement for raising a jurisdictional objection are accurately described, the option affirming both statements is the correct one.

Therefore, the correct answer is both Statements I and II are true.