SUPREME COURT HOLDS ARTICLE 227 CANNOT ORDINARILY BE INVOKED TO CHALLENGE REJECTION OF A SECTION 16 APPLICATION BY AN ARBITRAL TRIBUNAL INTRODUCTION
The Hon’ble Supreme Court of India has reiterated that High Courts must exercise extreme circumspection when exercising their supervisory jurisdiction under Article 227 of the Constitution in relation to orders passed by an Arbitral Tribunal during ongoing arbitral proceedings.
In Manash Kamal Bezboruah v. M/s Bokahola Tea Company Private Limited & Ors., 2026 INSC 701, decided on 14 July 2026, a Bench comprising Hon’ble Justice K.V. Viswanathan and Hon’ble Justice Vijay Bishnoi considered whether a High Court could entertain a challenge under Article 227 against an Arbitral Tribunal’s rejection of an application questioning its jurisdiction over non-signatory parties.
The Supreme Court held that although the constitutional jurisdiction of the High Court under Article 227 is not completely excluded, it must be exercised only in exceptional circumstances. In particular, intervention at the interlocutory stage of an arbitration would ordinarily be inappropriate unless the order of the Arbitral Tribunal suffers from a patent lack of inherent jurisdiction.
The Court reaffirmed that the Arbitration and Conciliation Act, 1996 (“the Act”) is a self-contained statutory framework and that its legislative policy is one of minimal judicial intervention during the pendency of arbitral proceedings.
BRIEF FACTS
The dispute arose from a long-standing partnership and business arrangement involving several family members and companies connected with tea businesses.
A partnership firm, M/s Boloma Tea Company, was originally constituted in 1948. Various partnership deeds were subsequently executed, and disputes later arose concerning the management and affairs of the firm.
In 2012, the Appellant instituted a civil suit alleging mismanagement of funds and seeking, inter alia, rendition of accounts.
An application under Section 8 of the Arbitration and Conciliation Act, 1996, seeking reference of the disputes to arbitration, was initially rejected by the Trial Court. The rejection was subsequently upheld by the High Court.
The matter thereafter reached the Hon’ble Supreme Court. By a consent order dated 21 November 2024, the Supreme Court referred the disputes to arbitration and appointed an Arbitral Tribunal.
Certain Respondent companies, which were non-signatories to the arbitration agreement, had also been parties to the proceedings before the Supreme Court but did not contest the reference to arbitration or subsequently seek modification or review of the Supreme Court’s order.
During the arbitral proceedings, Respondent Nos. 1 to 3 filed applications under Order VII Rule 11 read with Order I Rule 10(2) and Section 151 of the Code of Civil Procedure, seeking deletion of their names from the array of parties on the ground that they were non-signatories to the arbitration agreement.
The Arbitral Tribunal treated the applications as raising a jurisdictional objection under Section 16 of the Arbitration Act and rejected them. The Tribunal relied, inter alia, upon the earlier consent order of the Supreme Court referring the parties to arbitration.
The Respondents thereafter approached the Gauhati High Court under Article 227 of the Constitution. The High Court stayed the notices issued to the Respondents and subsequently rejected the Appellant’s preliminary objection concerning the maintainability of the Article 227 proceedings.
The Appellant consequently approached the Supreme Court.
ISSUES CONSIDERED BY THE SUPREME COURT
The principal questions before the Supreme Court were:
Whether the High Court was justified in entertaining a challenge under Article 227 against an order of an Arbitral Tribunal rejecting a jurisdictional objection treated as a Section 16 application.
Whether such intervention was consistent with the legislative policy of minimal judicial interference under Section 5 of the Arbitration and Conciliation Act, 1996.
Whether the Arbitral Tribunal was competent to determine whether the non-signatory Respondents were bound by the arbitration agreement.
Whether the High Court could interfere at the interlocutory stage in the absence of a patent lack of inherent jurisdiction on the part of the Arbitral Tribunal.
SUPREME COURT’S ANALYSIS
1. Arbitration Act is a Self-Contained Code
The Supreme Court reiterated that the Arbitration and Conciliation Act is a code in itself and that this has significant consequences for the manner in which courts exercise their jurisdiction during arbitral proceedings.
Section 5 of the Act contains a non-obstante clause restricting judicial intervention in arbitral proceedings except where such intervention is specifically contemplated by the Act.
The Court observed that the legislative objective is to reduce unnecessary judicial interference and allow arbitration to proceed with minimum interruption.
2. Article 227 Is Not Completely Excluded, but Must Be Exercised With Extreme Circumspection
The Supreme Court clarified that Article 227, being a constitutional provision, is not completely ousted by Section 5 of the Arbitration Act.
However, this does not mean that parties can routinely approach the High Court against orders passed by an Arbitral Tribunal.
The Court relied upon its earlier decisions, including Deep Industries Ltd. v. Oil and Natural Gas Corporation Ltd. and Punjab State Power Corporation Ltd. v. Emta Coal Ltd., and reiterated that interference under Article 227 would be justified only where there is a patent lack of inherent jurisdiction.
The Court explained that such a defect must be apparent on the face of the order. It should be so perverse that the only possible conclusion is that the Tribunal lacked inherent jurisdiction.
The Supreme Court further observed that a High Court considering an Article 227 challenge to a Section 16 order should ordinarily record a prima facie finding regarding the alleged patent lack of inherent jurisdiction before entertaining the matter.
3. Parties Should Ordinarily Await the Statutory Remedy
The Court reiterated that the Arbitration Act provides a statutory mechanism for challenging arbitral decisions.
Where an order rejecting a Section 16 jurisdictional objection is not otherwise appealable under Section 37, the aggrieved party ordinarily has to await the conclusion of the arbitral proceedings and challenge the matter in accordance with Section 34 after the final award.
The Court specifically held that the remedy against rejection of a Section 16 application, in the circumstances of the present case, lies under Section 34 following the final award.
4. Complex Questions Concerning Non-Signatories Are for the Arbitral Tribunal
An important aspect of the judgment concerns the status of non-signatory parties.
The Supreme Court referred to the Constitution Bench decision in Cox and Kings Ltd. v. SAP India Pvt. Ltd., observing that determining whether a non-signatory is a party to an arbitration agreement can involve complex factual, circumstantial and legal considerations.
The referral court is required to undertake a prima facie examination, while the more detailed determination concerning whether a non-signatory is actually bound by the arbitration agreement can be left to the Arbitral Tribunal.
This approach gives effect to the doctrine of kompetenz-kompetenz, embodied in Section 16 of the Arbitration Act, under which the Arbitral Tribunal is empowered to determine its own jurisdiction.
In the present case, therefore, the Supreme Court held that the Arbitral Tribunal was competent to determine whether Respondent Nos. 1 to 3 were veritable parties to the arbitration agreement notwithstanding their non-signatory status.
5. Importance of Avoiding Multiple Judicial Interventions
The Supreme Court also took note of the fact that Respondent Nos. 1 to 3 had been parties to the earlier proceedings before the Supreme Court but had not contested the reference to arbitration.
The Court observed that, if the Respondents believed that the Supreme Court’s earlier order required clarification or modification, they could have sought appropriate relief at that stage.
Instead, raising the issue subsequently resulted in another round of litigation and unnecessary delay.
The Court cautioned that repeated judicial intervention during arbitration can ultimately defeat the very purpose for which the Arbitration Act was enacted.
MAINTAINABILITY AND ENTERTAINABILITY
The judgment also makes an important distinction between the concepts of “maintainability” and “entertainability” of a constitutional petition.
The Supreme Court explained that the availability of an alternative statutory remedy does not necessarily render a writ petition legally incapable of being maintained. However, whether the High Court should actually entertain such a petition is a matter involving judicial discretion.
In the context of arbitration, the existence of a statutory remedy under Section 34, together with the legislative requirement of minimal judicial intervention under Section 5, substantially raises the threshold for exercising constitutional jurisdiction during the pendency of arbitral proceedings.
DECISION OF THE SUPREME COURT
The Supreme Court held that the High Court was not justified in entertaining the Article 227 challenge and staying the arbitral proceedings.
The Court set aside the High Court’s orders and dismissed the revision petition pending before it.
The Supreme Court directed the Arbitral Tribunal to determine the status of Respondent Nos. 1 to 3 in relation to the arbitration proceedings independently and without being influenced by the observations made by the Supreme Court, and to complete the arbitral proceedings expeditiously in accordance with law.
CONCLUSION
The decision in Manash Kamal Bezboruah v. M/s Bokahola Tea Company Private Limited & Ors., 2026 INSC 701 reinforces the principle that arbitration should not be interrupted by routine challenges before constitutional courts.
While Article 227 remains constitutionally available, the Supreme Court has made it clear that its use in relation to interlocutory orders of an Arbitral Tribunal must be exceptional and exercised with extreme circumspection.
In particular, a challenge to the rejection of a Section 16 application should ordinarily await the conclusion of the arbitral proceedings and be pursued through the statutory mechanism provided by the Arbitration Act, unless the Tribunal’s order demonstrates a patent lack of inherent jurisdiction.
The judgment also confirms the important role of the Arbitral Tribunal in determining its own jurisdiction and in deciding complex questions concerning the participation of non-signatory parties.
The decision therefore reinforces three important principles of Indian arbitration law:
Minimal judicial intervention during arbitral proceedings;
Respect for the kompetenz-kompetenz principle under Section 16; and
Reliance on the statutory remedy under Section 34 rather than premature interlocutory challenges.
EDITOR’S COMMENTS
Arbitration is intended to provide an effective alternative mechanism for the resolution of disputes without subjecting parties to prolonged and repeated court proceedings.
The Supreme Court’s judgment reinforces the principle that once arbitral proceedings have commenced, parties should ordinarily allow the Arbitral Tribunal to complete the process without seeking judicial intervention at every interlocutory stage.
The judgment is particularly significant in the context of Section 16 applications involving non-signatory parties, where questions of jurisdiction may involve complex factual and legal considerations. The Supreme Court has emphasised that such issues should ordinarily be determined by the Arbitral Tribunal in accordance with the statutory framework.
At the same time, the judgment does not completely exclude the constitutional jurisdiction of High Courts. Rather, it establishes that intervention under Article 227 must be approached with considerable restraint and would ordinarily require a clear and patent lack of inherent jurisdiction.
The decision is therefore an important reaffirmation of the legislative objective of minimal judicial intervention and expeditious completion of arbitral proceedings.
The Supreme Court ultimately directed the Arbitral Tribunal to proceed independently and complete the arbitration expeditiously and in accordance with law.
Sushila Ram Varma
Advocate and Chief Consultant
The Indian Lawyer & Allied Services