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

Hint:

Section 16 = "Kompetenz-Kompetenz." The Arbitrator acts as the judge of their own jurisdiction! If you have a dispute about the tribunal's authority, raise it early (by the defence statement) or risk losing the right to challenge.

Answer 1

The Correct Option is A

Arbitration exists as an alternative to litigation precisely so that disputes can be resolved without constantly running back to a court, and Section 16 of the Arbitration and Conciliation Act, 1996 is built around that goal. Statement I, that the tribunal may rule on its own jurisdiction, reflects the doctrine of Kompetenz-Kompetenz, letting the tribunal decide at the outset whether it even has authority over the dispute, instead of forcing the parties to first litigate that question in a civil court and only then begin arbitration. Without this power, every arbitration could be stalled indefinitely by a party simply denying the tribunal's authority and dragging the question through the court system, defeating the entire purpose of choosing arbitration in the first place. So Statement I is true, and it serves the goal of keeping arbitration self-contained and efficient.

Statement II serves a related but slightly different purpose. If a party could raise a jurisdictional objection at any point, including after fully participating in the hearing and losing on the merits, it would allow tactical delay and unfairness, letting a losing party manufacture a jurisdictional challenge as an afterthought. Requiring the objection to be raised by the time the statement of defence is filed forces the issue to be settled early, while still leaving room for the tribunal to excuse a late plea if there is genuine justification. This is also true, and it protects the fairness and finality of the arbitral process.

Since both the tribunal's power to rule on its own jurisdiction and the early-objection requirement serve real, complementary purposes within the scheme of the Act, both statements accurately describe the law.
\[ \boxed{\text{Both Statements I and II are true}} \]

Answer 2

A useful way to test these two statements is to imagine what arbitration would look like if each one were false, and see whether that imagined world matches how the Arbitration and Conciliation Act, 1996 actually operates.

1. Option (A): If Statement I were false, no tribunal could ever decide its own competence, and every arbitration would need a preliminary court ruling on jurisdiction before proceeding, which is not how Section 16 operates. If Statement II were false, a party could raise a jurisdictional challenge at any late stage, even after a full hearing, which would invite exactly the kind of tactical delay Section 16(2) was drafted to prevent. Since neither of these counterfactual scenarios reflects the actual law, both statements must be true as they stand, making this option correct.
2. Option (B): This would mean the timing bar in Section 16(2) does not exist, so a jurisdictional plea could be raised at any point without consequence. That is not the position under the Act, which fixes the point by which such a plea should ordinarily be raised, so this option does not hold.
3. Option (C): This would mean the tribunal has no power at all to rule on its own jurisdiction and there is no timing requirement either, effectively erasing Section 16 from the statute book, which is plainly inconsistent with the express text of the section.
4. Option (D): This would mean the tribunal cannot rule on its own jurisdiction but a timing bar somehow still exists for objections raised to some other body, which does not correspond to how Section 16 is structured, since the timing bar in Section 16(2) only makes sense as a limit on objections raised before the very tribunal empowered by Section 16(1).

Working through each imagined scenario confirms that both the tribunal's self-ruling power and the procedural time limit are real, operative features of Section 16.

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