Section 16: Competence of arbitral tribunal to rule on

its jurisdiction
• Section 16 of the Arbitration and Conciliation Act, 1996 has been
framed in accordance with Article 16 of the UNCITRAL Model law.
• It embodies the doctrine "Kompetenz – Kompetenz". 
• It empowers the arbitral tribunal to rule upon its 'own' jurisdiction,
brought forth by one of the parties to the dispute.
• Section 16 (1) of the A&C Act states that an arbitral tribunal may rule
on its own jurisdiction, including ruling on any objection with respect
to the existence or validity of the arbitration agreement.
• the arbitral tribunal has the authority to decide whether it has the
jurisdiction to adjudicate the dispute or not.
• Kompetenz-kompetenz is the jurisdictional principle to empower an
adjudicating body to exercise on the issues on its own jurisdiction
submitted before it, i.e., it can decide on the pleas challenging its
own jurisdiction submitted before it.
• The underlying object of this doctrine is to minimize judicial
intervention in order to ensure that the arbitral process is not
thwarted at the very threshold, merely because a preliminary
objection is raised by one of the parties. 
• The first say to the objections raised on the jurisdiction of the
tribunal will be for the tribunal than the court.
• The SC (constitution bench) in the case of SBP & Co. vs. Patel
Engineering Ltd.  held that all the preliminary/threshold issues with
respect to jurisdiction of the arbitral tribunal should be examined
by the Court under Section 11.
• This ruling chipped away the inherent importance of
the Kompetenz-Kompetenz principle incorporated in Section 16.
• Consequently, the 2015 Amendment inserted Section 11(6A) in
order to restrict the powers of the courts to merely examining the
existing of an arbitration agreement (and nothing more). 
Post 2015 Amendment
 # Indian Farmers Fertilizers Cooperative Limited vs. Bhadra Products
(2018) 2 SCC 534
i. whether an award on the issue of limitation can be said to be an
interim award and can be set aside under Section 34 of the A&C
Act.
ii. whether a decision on a point of limitation would go to jurisdiction
and, therefore, be covered by Section 16
• SC, on the First Issue, answered in the affirmative
• SC placed reliance on the Section 30 and 31 of the English
Arbitration Act, 1996 (which is also based on 'Kompetenz-
Kompetenz' principle.
• held that the issue of limitation is not a matter of tribunal's
jurisdiction under Section 16 of A&C Act.
• It also held that the term 'jurisdiction' mentioned in Section 16 of
the A&C Act means reference to a three part test only.
a) whether there is existence of a valid arbitration agreement;
b) whether the arbitral tribunal is properly constituted; and
c) whether the matters submitted for arbitration are in accordance
with the arbitration agreement ("Three Determinatives").
Post 2019 Amendment
• The 2019 Amendment omitted Section 11(6A).
• 11(6A) was not deleted in order to revive the law that was in place
prior to 2015 Amendment, but to enable the appointment of
arbitrator(s) by arbitral institutions(s) appointed by the SCI in case
of international commercial arbitrations or by the High Courts in
case of all other arbitrations.
• clarified that the scope of enquiry under Section 16 of A&C Act is
limited to the Three Determinatives only.
• As a result, issues (of preliminary nature) such as an issue of limitation
or non-joinder of necessary or proper parties could not be raised
under Section 16 of A&C Act.
• SCI (also a division bench), subsequently in Uttarakhand Purv Sainak
Kalyan Nigam Limited vs. Northern Coal Field Limited (2020) 2 SCC
455 observed that the arbitral tribunal (as and when constituted) shall
be empowered to determine the issue of limitation under the Section
16 of the A&C Act.
• Relying on the UPSKNL Click
Case, thetext
to add High Court of Bombay recently in C.
Shamsuddin vs. Now Realty Ventures LLP and others (AIR Online 2020
Bom 76) also gave a similar finding and held that the question of
limitation will be kept open for decision by the arbitral tribunal under
Section 16 of A&C Act.
• In view of the divided findings of the SC in the IFFCO and UPSKNL
judgment (both division benches) and of the BHC in RVL Case, the
scope of jurisdiction under Section 16 of the A&C Act remains unclear.
16 (1) (a) an arbitration clause which forms part of a contract shall be
treated as an agreement independent of the other terms of the
contract; and
(b) a decision by the arbitral tribunal that the contract is null and
void shall not entail ipso jure the invalidity of the arbitration clause.
(2) A plea that the arbitral tribunal does not have jurisdiction shall
be raised not later than the submission of the statement of defence;
however, a party shall not be precluded from raising such a
plea merely because that he has appointed, or participated in the
appointment of, an arbitrator.
(3) A plea that the arbitral tribunal is exceeding the scope of its
authority shall be raised as soon as the matter alleged to be beyond
the scope of its authority is raised during the arbitral proceedings.
(4) The arbitral tribunal may, in either of the cases referred to in
sub-section (2) or sub-section (3), admit a later plea if it considers
the delay justified.
(5) The arbitral tribunal shall decide on a plea referred to in sub-
section (2) or sub-section (3) and, where the arbitral tribunal takes a
decision rejecting the plea, continue with the arbitral proceedings
and make an arbitral award.
(6) A party aggrieved by such an arbitral award may make an
application for setting aside such an arbitral award in accordance
with section 34.