A&C Act | Arbitrator’s Decision On Jurisdiction Treated As A Preliminary Issue Amounts To An 'Interim Award' Amenable To Challenge Under Section 34: Madhya Pradesh High Court

"If the Arbitrator has already decided the issue of jurisdiction finally then there cannot be any further adjudication of the issue in the final hearing before the Arbitrator. Meaning thereby, now the issue in regard to jurisdiction has become final and it cannot be tested again by the Arbitrator." Madhya Pradesh High Court, in a significant ruling dated October 9, 2026, held that when an Arbitral Tribunal decides a plea of jurisdiction as a preliminary issue, such a decision constitutes an 'interim award' within the meaning of the Arbitration and Conciliation Act, 1996, and is consequently amenable to challenge under Section 34.

A bench comprising Chief Justice Alpesh Y. Kogje and Justice Deepak Khot observed that once a jurisdictional issue is conclusively decided at the preliminary stage, it attains finality before the Tribunal and cannot be re-agitated during the final hearing, thereby necessitating a challenge under Section 34 rather than waiting for the final award.

The dispute arose from a Concession Agreement between the Madhya Pradesh Road Development Corporation (MPRDC) and Viva Highways Limited. While the petitioner argued that the dispute fell under the exclusive jurisdiction of the Tribunal constituted under the M.P. Madhyastham Adhikaran Adhiniyam, 1983, the respondent invoked the Arbitration and Conciliation Act, 1996. Following a series of procedural orders and a direction from the High Court to decide the jurisdictional issue as a preliminary matter, the Sole Arbitrator held that the 1996 Act was applicable, dismissing the petitioner's jurisdictional objection.

The primary question before the court was whether an order passed by an Arbitrator deciding the issue of jurisdiction as a preliminary matter qualifies as an 'interim award' challengeable under Section 34 of the Arbitration and Conciliation Act, 1996. The court was also called upon to determine whether, if such an application under Section 34 is dismissed by a Commercial Court as 'not maintainable,' the aggrieved party should approach the High Court under Article 226/227 or avail the remedy under Section 37 of the Act.

Nature of Preliminary Jurisdictional Rulings

The Court emphasized that the distinction between a routine Section 16 application and a 'preliminary issue' ruling is critical. Relying on the Supreme Court's decision in MCM Worldwide (P) Ltd. v. Construction Industry Development Council, the bench noted that when an arbitrator treats a jurisdictional plea as a preliminary issue and renders a final decision on it, that decision cannot be revisited during the final proceedings.

Arbitrator’s Decision as Interim Award

The court reasoned that because the Arbitrator had already conclusively decided the jurisdictional issue, the ruling serves as an 'interim award.' As such, the procedural rigour of Section 16(5) and 16(6)—which usually requires parties to wait until the final award—is bypassed in favor of immediate challengeability.

"Once the Arbitrator has taken a view on an issue and decided it in negative then subsequently it cannot be entertained or adjudicated. Therefore, the issue has become final."

Exhaustion of Statutory Remedies

Addressing the maintainability of the writ petition, the Court clarified that since the order of the Commercial Court (dismissing the Section 34 application) constitutes an appealable order under Section 37(1)(c) of the Act, the petitioner cannot invoke the High Court's extraordinary jurisdiction under Article 226/227. The Court underscored that the Arbitration Act mandates minimal judicial interference and prescribes a specific appellate hierarchy that must be followed.

"The petitioner has to avail statutory remedy under Section 37 of the Act of 1996 in furtherance of the statutory object of the Act of 1996 of minimal interference."

Dismissal of Writ Petition

The bench concluded that the appropriate legal path for the petitioner was to file an appeal under Section 37 against the order of the Commercial Court. Finding that the present writ petition was not the correct remedy, the Court dismissed the matter, directing the parties to pursue the statutory appellate route to ensure the expeditious resolution of the arbitration proceedings.

Date of Decision: 09 October 2026