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

Rather than judging the combination options directly, it helps to test Statement I and Statement II independently against Section 16 first, since each maps onto a separate sub-section.

1. Statement I against Section 16(1): this sub-section allows the arbitral tribunal to rule on its own jurisdiction, including any objection to the existence or validity of the arbitration agreement, which is exactly what Statement I describes, so it is true.
2. Statement II against Section 16(2): this sub-section requires a plea that the tribunal lacks jurisdiction to be raised no later than the submission of the statement of defence, while allowing the tribunal to permit a later plea if it considers the delay justified, which matches Statement II precisely, so it too is true.

Since both statements are independently confirmed by their respective sub-sections of Section 16, the correct combination option is the one holding that both statements are true.

Answer 2

Statement I and Statement II describe two different aspects of the same underlying scheme in Section 16, one substantive and one procedural, and comparing their roles side by side confirms that both belong together as correct.

1. Statement I, the substantive power: this reflects the kompetenz-kompetenz doctrine, under which the tribunal itself is the first authority to decide questions about its own jurisdiction, including whether the arbitration agreement even exists or is valid. Without this power, every jurisdictional dispute would have to go straight to a court, defeating much of the efficiency arbitration is meant to offer.
2. Statement II, the procedural safeguard: this reflects the companion rule that a party cannot sit on a jurisdictional objection indefinitely and must generally raise it by the time it files its statement of defence, though the tribunal retains discretion to excuse a later plea for good reason. This timing rule exists precisely to make the substantive power in Statement I workable in practice, by preventing late, tactical jurisdictional challenges.
3. The remaining combination options: treating only one of these two connected rules as true, or treating neither as true, breaks the natural pairing between the tribunal's jurisdictional power and the procedural timing that regulates how objections to it must be raised.

Because the substantive rule in Statement I and its procedural companion in Statement II both accurately state Section 16, the option holding both statements true is the correct one.

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