Bombay High Court
Jindal Steel Limited vs India Coke And Power Private Limited on 4 March, 2026
2026:BHC-OS:5537
CARBP-L-5605-2026.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
IN ITS COMMERCIAL DIVISION
COMMERCIAL ARBITRATION PETITION (LODGING) NO.5605 OF 2026
WITH
INTERIM APPLICATION (LODGING) NO.5620 OF 2026
IN
COMMERCIAL ARBITRATION PETITION (LODGING) NO.5605 OF 2026
Jindal Steel Limited (Formerly known as
Jindal Steel and Power Limited)
A Company registered under the
Companies Act, 1956, having its
registered office at O.P. Jindal Marg,
Hissar, HISAR, Haryana, ...Petitioner/
India-125 005 Applicant
Versus
India Coke And Power Private Limited,
A Company registered under
Companies Act, 1956 having its
registered office at 904, Windfall,
Sahar Plaza Complex, Andheri-Kurla Road,
Andheri-East, Mumbai, Maharashtra-400059 ...Respondent
------------
Mr. Darius J. Khambata, Senior Advocate a/w Mr. Shyam Kapadia
(Through V.C.), Ms. Shalaka Patil, Mr. Ketan Gaur, Mr. Ankit Pathak, Mr.
Neil Chatterjee, Ms. Nidhisha Garg, Ms. Saumya Sinha, Mr. Ayush
Chaturvedi, Mr. Naman Joshi, Mr. Rahul Chahar, Mr. Shivam Gera, Ms.
Ekta Gupta, Ms. Neha Maniktala and Mr. Manish Kharbanda i/b Trilegl for
the Petitioner/Applicant
Mr. Venkatesh Dhond, Senior Advocate a/w Mr. Shashwat Singh Sawno,
Mr. Abhiraj Rao, Mr. Rahul Kanojia (Through V.C.) and Ms. Aanchal Gupta
for the Respondent
------------
CORAM : SHARMILA U. DESHMUKH, J.
RESERVED ON : 26th FEBRUARY 2026
PRONOUNCED ON : 4th MARCH 2026
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JUDGMENT :
1. The present Petition is filed under Section 34 of the Arbitration and Conciliation Act, 1996 (for short, "the Arbitration Act"), seeking to challenge the order dated 21st December 2025 passed by the Arbitral Tribunal comprising of the sole Arbitrator in MCIA/Arb/116/2024, terming the order as Interim Award. The alternate prayer is to set aside the impugned Interim Award dated 21 st December 2025 in respect of the issue as to whether the business confirmation dated 31 st January 2024 constitutes a binding and enforceable agreement between the parties and alternatively, to remand the Interim Award under Section 34(4) of the Arbitration Act for fresh adjudication, by permitting the parties to lead oral evidence.
2. A preliminary objection has been raised as to the maintainability of the petition by Mr. Dhond, learned Senior Advocate appearing for the Respondent, contending that the impugned order is passed under Section 16 of the Arbitration Act, and does not constitute an Interim Award.
3. As maintainability was questioned, with consent, the Petition was taken up for hearing on the preliminary objection. SQ Pathan 2/24 ::: Uploaded on - 04/03/2026 ::: Downloaded on - 04/03/2026 20:34:13 :::
CARBP-L-5605-2026.doc FACTUAL MATRIX:
4. The relevant facts are that on 7th August 2024, the Respondent issued a Request for Arbitration ("RFA") to the Mumbai Centre for International Arbitration ("MCIA") against the Petitioner under the arbitration agreement contained in five contracts dated 17 th October 2023, 10th January 2024, 17th January 2024, 22nd January 2024, and 21st June 2024. In respect of Business Confirmation dated 31 st January, 2024, the RFA states that certain disputes arose between the parties and the arbitration clause contained in the contract dated 22 nd January, 2024 has been incorporated by reference in the Business Confirmation dated 31st January, 2024.
5. On 7th August 2024, the Petitioner responded to the RFA opposing the consolidated reference to arbitration sought in the RFA under the five contracts and denying all averments raised in the RFA. On 26th November 2024, the MCIA notified the appointment of Sole Arbitrator. On 4th August 2025, the Learned Sole Arbitrator framed the issues in the arbitration. Relevant for our purpose are Issue Nos. 4 and 5, which read as under:
"(4) Whether the business confirmation dated 31 st January 2024 constitutes a binding and enforceable contract between the parties?
(5) Whether the Tribunal has jurisdiction to adjudicate SQ Pathan 3/24 ::: Uploaded on - 04/03/2026 ::: Downloaded on - 04/03/2026 20:34:13 ::: CARBP-L-5605-2026.doc disputes arising out of the business confirmation dated 31 st January 2024?"
6. On 12th April 2025, the Petitioner filed an application under Section 16(1) of the Arbitration Act, raising an objection to the Tribunal's jurisdiction in respect of disputes purportedly arising out of the Business Confirmation dated 31st January 2024. The prayers in the application read as under:
(a) Allow the present Application under Section 16(1) of the Arbitration and Conciliation Act, 1996.
(b) Declare that no arbitration agreement exists in respect of the Business Confirmation dated 31.01.2024.
(c) Dismiss the claims in the Statement of Claim that purportedly arise from the said Business Confirmation dated 31.01.2024 for lack of jurisdiction.
7. In reply, the Respondent interalia raised preliminary objection that the jurisdictional objection cannot be decided as pure questions of law, at this stage, without oral and documentary evidence, and that incorporation by reference of the arbitration clause is a triable mixed question.
8. Vide order dated 21st December 2025, the Learned Sole Arbitrator held that the emails exchanged between the parties SQ Pathan 4/24 ::: Uploaded on - 04/03/2026 ::: Downloaded on - 04/03/2026 20:34:14 ::: CARBP-L-5605-2026.doc confirming the business constitutes a concluded contract and the Business Confirmation incorporates by reference the terms of the contract dated 22nd January 2024. It held that it had the jurisdiction in the matter and dismissed the application. In light of the findings in favour of the Respondent, the Learned Sole Arbitrator declined to go into the Respondent's plea that the application requires evidence and the decision be deferred to final adjudication.
9. The Arbitration proceeded further and on 9 th February 2026, during the cross-examination of the Respondent's witness by the Petitioner, the questions put to the witness on the binding nature of the Business Confirmation were objected by the Respondent on the ground that the issue stands concluded by the order dated 21 st December, 2025 passed under Section 16 of Arbitration. The objection was upheld by the Learned Sole Arbitrator, hence the present Petition came to be filed terming the impugned order dated 21st December, 2025 as Interim Award.
SUBMISSIONS:
10. Mr. Khambhata, learned Senior Advocate appearing for the Petitioner submits that under Section 31(6) of the Arbitration Act, the Arbitral Tribunal is entitled to make an interim arbitral award on any matter with respect to which it may make a final arbitral award. He has SQ Pathan 5/24 ::: Uploaded on - 04/03/2026 ::: Downloaded on - 04/03/2026 20:34:14 ::: CARBP-L-5605-2026.doc drawn attention of this Court to the provisions of Section 2(1)(c) to contend that an arbitral award includes an Interim Award and, therefore, even an Interim Award can be challenged under Section 34 of the Arbitration Act. He submits that there can be no quarrel with the position that an order passed under Section 16 determining incorporation of arbitration agreement would be an order on jurisdiction which cannot be challenged under Section 34 of the Act. He submits that, however, in the present case, the Learned Sole Arbitrator has proceeded to conclusively decide Issue No 4 framed in the Arbitration and the finding is on merits of the matter and as a consequence an Interim Award amenable to challenge under Section 34 of the Act.
11. He submits that the application under Section 16 sought a ruling on the Arbitrator's jurisdiction and there was no question of leading any evidence at that stage. He submits that though the jurisdictional objection was based on the Business Confirmation of 31 st January 2024 not being a concluded contract, the relief sought was specific to the Arbitrator's jurisdiction. He has taken this Court to the objection raised during cross examination and the Learned Arbitrator's ruling on the objection to contend that having held that the issue of binding nature of the Business Confirmation stands concluded by the order of 21 st SQ Pathan 6/24 ::: Uploaded on - 04/03/2026 ::: Downloaded on - 04/03/2026 20:34:14 ::: CARBP-L-5605-2026.doc December 2025, the Issue No 4 stands decided which constitutes an Interim Award within the meaning of Section 2(1)(c) of the Arbitration Act, drawing support from the decision of the Hon'ble Apex Court in the case of Indian Farmers Fertilizer Co-operative Limited (`IFFCO') v. Bhadra Products1.
12. He submits that it was the Respondent's own case in reply to Section 16 application that the issue whether there is concluded contract is fact laden requiring evidence and should be deferred to the final adjudication.
13. He submits that one of the contentions raised was in respect of non existence of arbitration agreement in the Business Confirmation and that the notice of arbitration is silent on the Business Confirmation, which was required to be adjudicated by the Learned Arbitrator under Section 16.He submits that the Arbitral Tribunal's findings that Business Confirmation dated 31st January 2024 is a binding and concluded contract is ex facie illegal. He submits that the Learned Arbitrator has opined that the draft contract itself constituted in line confirmation sought in the Business Confirmation when neither the email of 31st January, 2024 nor the draft contract is indicative that it is in line confirmation. He submits that the impugned order ignores the established practice of execution of formal contract 1 (2018) 2 SCC 534 SQ Pathan 7/24 ::: Uploaded on - 04/03/2026 ::: Downloaded on - 04/03/2026 20:34:14 ::: CARBP-L-5605-2026.doc and that the draft contract itself required signing. In support he relies upon the following decisions:
(i) IFFCO') v. Bhadra Products (supra)
(ii) National Thermal Power Corpn. Ltd. v. Siemens Atkeingesellschaft2
(iii) Mukhtar Alam v. Yasmin Khalique & Ors.3
14. Mr. Dhond, learned Senior Advocate appearing for Respondent submits that the impugned order passed under Section 16 of the Act is not an Interim Award under Section 31(6) of the Act and hence can be challenged after the final award has been passed. He submits that even if the jurisdictional objection is accepted effectively determining that no claim sustains, the only remedy available to the aggrieved party is an appeal under Section 37 and not under Section 34. He submits that under Section 16(1) when there is challenge to the existence or validity of the arbitration agreement, Section 34 has no application.
15. He submits that the jurisdictional objection in the present case was intertwined with the aspect of existence of the parent contract. He submits that in view of the specific case put forth by the Petitioner, under Section 16, the arbitral tribunal had the statutory competence to rule on its own jurisdiction including the objections with respect of
2 (2007) 4 SCC 451 3 (2024) 1 High Court Cases (Cal) 675 SQ Pathan 8/24 ::: Uploaded on - 04/03/2026 ::: Downloaded on - 04/03/2026 20:34:14 ::: CARBP-L-5605-2026.doc existence of arbitration agreement and validity of the underlying parent contract. He submits that it was the Petitioner's own case that there is no arbitration agreement as there is no concluded contract between the parties driving the Arbitral Tribunal to rule on the jurisdictional objection by considering whether the Business Confirmation was concluded contract. He would submit that in view of the arguments canvassed, the learned Arbitrator has considered the e- mails making the offer and confirming the business as constituting a concluded contract. He submits that the Petitioner took a chance and invited a finding on the concluded contract and is now bound by the findings of the Tribunal which cannot be re-adjudicated. He submits that in the course of cross-examination, the questions put on the binding effect of business confirmation were rightly refused in view of the said issue being concluded. He submits that having invited a finding, the Petitioner now cannot term the findings as Interim Award and would have to await the outcome of the final adjudication. He submits that it was the Petitioner's own decision to not apply for oral evidence and argue on basis of documents.
16. He submits that the decision of IFFCO v. Bhadra Products (supra), is distinguishable on facts as the Hon'ble Apex Court was dealing with the order of dismissal of the claim on the ground of SQ Pathan 9/24 ::: Uploaded on - 04/03/2026 ::: Downloaded on - 04/03/2026 20:34:14 ::: CARBP-L-5605-2026.doc limitation and it was not a case of an application under Section 16. He submits that the Hon'ble Apex Court held that the award which does not relate to the Arbitral Tribunal's own jurisdiction under Section 16 does not have to follow the drill of Sections 16(5) and (6) of the Act. He submits that in fact, the decision in IFFCO vs. Bhadra Products (supra) supports the Respondent as the Hon'ble Apex Court considered that Section 16 deals with the Arbitral tribunal's jurisdiction in the narrow sense of ruling on objections with respect to existence or validity of the arbitration agreement.
17. He would submit that in the decision of National Thermal Power Corpn. Ltd. (supra), the rejection of the counter claim was on the ground of the settlement entered into between the parties and is not a decision rendered in the context of Section 16 of the Act. He submits that the Hon'ble Apex Court expressly held that the plea opposing the counter claim was not raised in context of lack of jurisdiction under Section 16. He would point out the findings of the Hon'ble Apex Court that the decision rejecting a claim on basis of settlement, or barred by limitation or non maintainability constitutes adjudication on merits and does not amount to refusal to exercise jurisdiction under Section 16.
18. He would submit that the decision of the Calcutta High Court in AP-COM No 677 of 2024 is of no avail as the Division Bench has set SQ Pathan 10/24 ::: Uploaded on - 04/03/2026 ::: Downloaded on - 04/03/2026 20:34:14 ::: CARBP-L-5605-2026.doc aside the said order holding that it does not consider the order of Arbitrator as an Interim Award. In support, he relies upon the following decisions :
(i) M. S. Commercial & Ors. vs. Calicut Engineering Works Ltd.4
(ii) Sterling Industries vs. Jayprakash Associates Ltd. & Ors.5
(iii) Lindsay International Pvt. Ltd. vs. IFGL Refractories Ltd. 6
(iv) Anto Augustine & Anr. vs. Girish Koshy George & Ors.7
19. In rejoinder, Mr. Kapadia, learned counsel for Petitioner would distinguish the judgments relied upon by Mr. Dhond and would submit that in proceedings under Section 16, what is required to be tested is the existence or validity of the Arbitration Agreement and in the present case, the learned Arbitrator has decided Issue no. 4 which was an issue in dispute. He submits that the Petitioner's argument was also in the context of the incorporation of terms of the earlier contract by reference and the learned Arbitrator could have decided the issue of existence of the Arbitration Agreement.
Reasons and Analysis:
4 (2004) 10 SCC 656 5 (2021) 18 SCC 367 6 2022 SCC OnLine Cal 1880 7 2022 SCC OnLine Ker 3489 SQ Pathan 11/24 ::: Uploaded on - 04/03/2026 ::: Downloaded on - 04/03/2026 20:34:14 ::: CARBP-L-5605-2026.doc
20. The maintainability of the Petition under Section 34 of Arbitration Act would depend on the question as to whether the impugned order dated 21st December, 2025 is a decision on merits of the dispute so as to qualify as an Interim Award. Section 31(6) of the Arbitration Act permits making of an Interim Award on any matter with respect to which it may make a final arbitral award and Section 2(1)(c) defines arbitral award to include an Interim Award.
21. Prior to the filing of the application under Section 16 of Arbitration Act, the Learned Arbitrator had framed the issues in arbitration including Issue No 4 as to whether the Business Confirmation dated 31st January, 2024 constitutes a binding and enforceable contract between the parties. The averments in the application under Section 16 sought the specific relief of declaration that no arbitration agreement exists in respect of Business Confirmation dated 31st January, 2024. The application pleaded two issues firstly that the Business Confirmation never gave rise to any arbitration agreement and secondly no concluded or binding contract arose from the Business Confirmation.
22. In paragraph 4, it was averred that the Claimant relies on a generic and vague phrase in the business confirmation to contend that the arbitration clause from a prior contract stands incorporated and SQ Pathan 12/24 ::: Uploaded on - 04/03/2026 ::: Downloaded on - 04/03/2026 20:34:14 ::: CARBP-L-5605-2026.doc that no valid arbitration agreement arises from the Business Confirmation dated 31st January, 2024. In paragraph 11, it was pleaded that no valid or enforceable contract for supply of LAM coke arose from the issuance of the Business Confirmation dated 31 st January, 2024. In paragraph 13 it is pleaded that the Tribunal does not have jurisdiction to entertain or adjudicate the claims arising out of the Business Confirmation that never culminated into an independent contract and no arbitration agreement exists in relation to the Business Confirmation nor have the parties consented to submit the disputes arising out of the same to the jurisdiction of the Tribunal.
23. The parties were alive to the fact that the Petitioner's application was filed under Section 16 of the Arbitration Act. Section 16 embodies the principle of Kompetenz Kompetenz permitting the Arbitrator to rule on its own jurisdiction with respect to the existence or validity of the arbitration agreement. Section 16(1)(a) and (b) provides that for that purpose an arbitration clause which forms part of a contract shall be treated as an agreement independent of the other terms of the contract and a decision by the arbitral tribunal that the contract is null and void shall not entail ipso jure the invalidity of the arbitration clause. The statutory provision recognizes the concept of separability between the arbitration clause from the underlying SQ Pathan 13/24 ::: Uploaded on - 04/03/2026 ::: Downloaded on - 04/03/2026 20:34:14 ::: CARBP-L-5605-2026.doc contract and admits of two independent contracts i.e. the parent contract and the arbitration agreement. In Enercon (India) Ltd vs Enercon GmbH8, the Hon'ble Apex Court held in paragraph 83 as under:
"83. The concept of separability of the arbitration clause/agreement from the underlying contract is a necessity to ensure that the intention of the parties to resolve the disputes by arbitration does not evaporate into thin air with every challenge to the legality, validity, finality or breach of the underlying contract. The Indian Arbitration Act, 1996, as noticed above, under Section 16 accepts the concept that the main contract and the arbitration agreement form two independent contracts. Commercial rights and obligations are contained in the underlying, substantive, or the main contract. It is followed by a second contract, which expresses the agreement and the intention of the parties to resolve the dispute relating to the underlying contract through arbitration. A remedy is elected by parties outside the normal civil court remedy. It is true that support of the national courts would be required to ensure the success of arbitration, but, this would not detract from the legitimacy or independence of the collateral arbitration agreement, even if it is contained in a contract, which is claimed to be void or voidable or unconcluded by one of the parties." (Emphasis supplied)
24. The Arbitral Tribunal under Section 16 is tasked with the inquiry into the existence or validity of the arbitration agreement. The application under Section 16, even if pleaded, that there was no valid or enforceable contract arising from the Business Confirmation, the remit of inquiry under Section 16 was in a narrow sense of determining the existence or validity of an arbitration agreement. Paragraph 4.7 of 8 (2014) 5 SCC 1 SQ Pathan 14/24 ::: Uploaded on - 04/03/2026 ::: Downloaded on - 04/03/2026 20:34:14 ::: CARBP-L-5605-2026.doc the RFA seeks reference of the dispute under the Business Confirmation by invoking the doctrine of incorporation by reference of arbitration agreement which existed in Contract No 4. Paragraph 4 of the application under Section 16 assails the incorporation by reference on the ground that the phrase contained in the Business Confirmation neither refers to any specific agreement nor does it reflect any intent to import the arbitration clause from the fourth contract. The stated rival contentions formed the substratum of the issue which was required to be decided by the Learned Arbitrator. Section 7(5) of the Arbitration Act speaks of the reference in a contract to a document containing an arbitration clause to constitute an arbitration agreement if the contract is in writing and the reference is such as to make that arbitration clause part of the contract.
25. The Learned Arbitrator was thus required to consider whether there was arbitration agreement by reference. Under Section 16 of the Arbitration Act, in facts of the present case, the Learned Arbitrator was called upon to decide whether the specific phrase in the Business Confirmation constitutes an arbitration agreement applying the doctrine of incorporation by reference irrespective of whether the Business Confirmation constitutes a binding and enforceable contract. I am unable to accept the contention of Mr. Dhond that the issue of SQ Pathan 15/24 ::: Uploaded on - 04/03/2026 ::: Downloaded on - 04/03/2026 20:34:14 ::: CARBP-L-5605-2026.doc binding nature of the Business Confirmation was a jurisdictional issue to be decided in the application when viewed in light of the RFA. Even if the application under Section 16 contained pleadings about the Business Confirmation not being a binding contract, the ruling on jurisdiction did not require the Learned Arbitrator to go into the said issue as the existence of arbitration agreement was dependent on the interpretation of the term contained in the Business Confirmation that "all other terms shall be same as per last contract of 50KT."
26. It was the Respondent's own contention that the jurisdictional issue was fact laden and ought to be deferred to the final adjudication. The Petitioner chose not to lead any evidence and argued the matter on the basis of the documents evidently considering that the remit was inquiry was confined to the existence of arbitration agreement. The adjudication of the application under Section 16 can result only in a ruling on the jurisdiction with respect of existence or validity of arbitration agreement and cannot be accepted as a conclusive finding on merits of the dispute. The Statement of Claim in paragraph 62 claims that due to refusal to perform obligation under the Business Confirmation dated 31st January, 2024, which constitutes a valid and enforceable agreement, the demand notice was sent citing breach of contractual obligations and sought damages. The Statement of SQ Pathan 16/24 ::: Uploaded on - 04/03/2026 ::: Downloaded on - 04/03/2026 20:34:14 ::: CARBP-L-5605-2026.doc Defence raised a categorical denial to the claim of the Business Confirmation being binding and enforceable contract. The Learned Arbitrator is presumed to be conscious of the fact that the issue as regards the binding nature of the Business Confirmation is an issue framed in arbitration. Issue No 4 thus constituted an issue in dispute and the finding of the Learned Arbitrator on the binding nature of the Business Confirmation transgressed into the prohibited arena of merits of the dispute.
27. The objection of the Respondent raised during the cross examination acknowledges that the issue has been adjudicated in the order in Section 16 application and that the Petitioner had applied for a ruling on jurisdiction and not for an Interim Award. Before this Court also, the preliminary objection on maintainability of the petition in effect recognizes that the order of 21st December 2025 is a ruling on jurisdiction. Having acknowledged the said position, the Respondent cannot contend that the impugned order finally determines the binding nature of the Business Confirmation, which cannot be re adjudicated. The issue as to whether the Business Confirmation constitutes a concluded contract will necessarily require evidence to be led and cannot be decided on the basis of documents, which fact is also accepted by the Respondent.
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28. Perusal of the impugned order will indicate the compartmentalized findings of the Learned Arbitrator: one in respect of the binding nature of the Business Confirmation and other in respect of existence of the arbitration agreement. There is no finding which rests the existence of the arbitration agreement on the finding of the Business Agreement being binding and concluded contract. I am therefore not inclined to accept the submission of Mr. Dhond that finding an existence of arbitration agreement required a finding on binding nature of Business Confirmation dated 31 st January, 2024. It was not necessary for the Learned Arbitrator to venture into the issue which touched the merits of the dispute and render a finding even if argued by the Petitioner as the adjudication under Section 16 is limited to the jurisdictional aspect. The impugned order renders dual findings one on jurisdictional aspect and other on merits of the dispute.
29. Insofar as the decisions relied upon by Mr. Dhond are concerned, in M. S. Commercial & Ors. vs. Calicut Engineering Works Ltd. (supra), the Petitioners therein claimed that there was no arbitration agreement between the parties, which issue was dependent on whether or not the Petitioner had signed the documents which purportedly contained the arbitration clause. The Arbitrator appointed SQ Pathan 18/24 ::: Uploaded on - 04/03/2026 ::: Downloaded on - 04/03/2026 20:34:14 ::: CARBP-L-5605-2026.doc the handwriting expert and rejected the application raising objection to its jurisdiction. After the decision was given, the Petitioners filed an application seeking permission to cross-examine the handwriting expert. It is in this factual scenario that the Hon'ble Apex Court held that once arbitrator has taken a decision that there is an arbitration agreement, then by virtue of Section 16(5) of the Arbitration Act, the Arbitrator was bound to continue with the arbitration proceedings and make an arbitral award. The facts of the case are distinguishable as what was sought by the Petitioner therein was a reopening of the decision of the arbitrator that there was an arbitration agreement, where in the present case, what the Petitioner herein had sought at the stage of cross-examination was permission to cross-examine the witness on the issue of not the existence of the arbitration agreement, but the non-existence of a concluded contract, which issue could not have been said to have attained finality in the order passed under the application filed under Section 16(5).
30. In Sterling Industries vs. Jayprakash Associates Ltd. & Ors. (supra), the Hon'ble Apex Court has reiterated the well-settled principle that the application was not tenable, which challenged the Section 16 order on the ground that it was a partial award. There is no quarrel with the said proposition.
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31. In the case of Lindsay International Pvt. Ltd. vs. IFGL Refractories Ltd. (supra), the dismissal of the Petitioner's application under Section 16 was challenged under Section 34 of the Arbitration Act. In that case, a question of maintainability was raised and the argument was that while considering the scope of the existence of the arbitration agreement, there has been a categorical finding that there has been no novation of the earlier contract between the parties by virtue of subsequent Memorandum of Understanding and by reason of such finding, the counterclaim of the Petitioner would become infructuous, since the stand of the Petitioner before the arbitrator was that the arbitration agreement between the parties was novated by the subsequent MOU. The response of the Respondents therein was that the claimant had not made any claim on the alleged novation/supersession of the agreement by the subsequent MOU.
32. The learned Single Judge considered the case of the Petitioner that the arbitrator has given finding on one of the primary disputes between the parties and that, in rejecting the contention of novation, the arbitrator prejudged the issue Nos. 5 and 6 framed in the arbitration proceedings, which dealt with, whether the termination of the MOU by the claimant was justified and whether there was any SQ Pathan 20/24 ::: Uploaded on - 04/03/2026 ::: Downloaded on - 04/03/2026 20:34:14 ::: CARBP-L-5605-2026.doc breach of the MOU by the Petitioner. The learned Single Judge noted the factual position therein that the issue Nos. 5 and 6 were framed by the arbitrator after the impugned decision and rejected the said contention. It also held that an order passed under Section 16(5) is an order on jurisdiction simpliciter and in essence, such order would precede an order on the merits of the claim. It noted that the decision rejected the Petitioner's application by holding that there was no merit in the application under Section 16 of the Arbitration Act, and the impugned decision does not state in any part thereof that it has considered or adjudicated on the merits of the dispute contained in the pleadings before the tribunal as on that date, namely, the statement of claim of IFGL. It further noted that the statement of claim sought payment received by the Petitioner from other company as price of goods and default award for the amount of sales tax payable and the impugned decision, constitute a partial award, must have considered and adjudicated on either of the claims in statement of claim of IFGL. It was further noted that none of the claims of IFGL deals with the issue of novation or supersession of the arbitration agreement and the decision could only have been confined to the statement of filed by IFGL, since the Petitioner's counterclaim was not before the arbitrator at the relevant point of time. SQ Pathan 21/24 ::: Uploaded on - 04/03/2026 ::: Downloaded on - 04/03/2026 20:34:14 :::
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33. This is a distinguishing feature in the said decision, as at that point of time, the counterclaim of the Petitioner therein was not before the arbitrator and the statement of claim did not seek any relief as regards the alleged novation/supersession of the agreement by the subsequent MOU. It is in these facts that the learned Single Judge held that the arbitrator has not transgressed into the arena of dispute between the parties. In the present case, the arbitrator has, in an order under Section 16 adjudicated the specific issue No. 4, which was framed, and rendered a finding, which it could not have done under Section 16 of the Arbitration Act. The very concept of an Interim Award contemplates the claim of the parties and contains a decision on the same, which is different from ruling on the existence or validity of an arbitration agreement. In the case of Lindsay International Pvt. Ltd. vs. IFGL Refractories Ltd. (supra), the learned Single Judge held that the order is an order on jurisdiction, bereft of the depth and detail of part adjudication on the merits of the claim. It specifically held that the arbitrator therein did not decide any claim made by the claimant therein. The facts are completely distinguishable and the decision does not assist the Respondent.
34. In the case of Anto Augustine & Anr. vs. Girish Koshy George & Ors. (supra), the issue of jurisdictional bar was raised, and one of the SQ Pathan 22/24 ::: Uploaded on - 04/03/2026 ::: Downloaded on - 04/03/2026 20:34:14 ::: CARBP-L-5605-2026.doc grounds was that there was no valid agreement between the parties. The Kerala High Court held that after rendering of the award, the party aggrieved can challenge the same by filing an application under Section 34 of the Arbitration Act and can raise all issues, including jurisdictional bar issue. The said decision is not an authority for the proposition that irrespective of the order under Section 16 deciding the merits of the claim, the same cannot be challenged by way of Section 34. CONCLUSION:
35. In light of the above discussion, as the impugned order was passed under Section 16 of the Arbitration Act, it is not open for the Petitioner to challenge the order to the extent of upholding the jurisdiction of the Learned Arbitrator under Section 34 of the Arbitration Act, and the ruling on jurisdiction is required to be challenged along with the final Award. As the binding nature of the Business Confirmation dated 31st January, 2024 was not a jurisdictional issue but an issue on merits of the dispute, the Learned Arbitrator under Section 16 of the Arbitration Act could not have rendered any conclusive findings touching the merits of the claim. The arbitral autonomy under Section 5 of the Arbitration Act will not come in the way of deciding whether the Learned Arbitrator could have rendered conclusive findings on merits of dispute under Section 16, as the SQ Pathan 23/24 ::: Uploaded on - 04/03/2026 ::: Downloaded on - 04/03/2026 20:34:14 ::: CARBP-L-5605-2026.doc legislative scheme of Section 16 permits the Learned Arbitrator to rule only on its jurisdiction in respect of the aspect of existence or validity of the arbitration agreement. The Petitioner could not be deprived of its right to lead evidence on the issue of whether the Business Confirmation dated 31st January, 2024 constituted a concluded contract or not in light of the position that such issue was fact-laden, by going into the validity of such finding in present petition. The Petition is partly allowed by holding that the findings in the impugned order dated 21st December, 2025 as regards the binding nature of the Business Confirmation dated 31st January, 2024 are not conclusive findings.
36. Interim Application do not survive for consideration and stands dismissed.
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