Maintainability of an appeal u/s 37 of A&C Act, 1996 against a Tribunal's order on addition or deletion of parties under section 16 of the A&C Act,1996.

Section 16 of the A&C Act, 1996 is one of the important and complex statutes of the Act. It is not complex for the bare statutory provisions, but for the weight of powers envisaged behind it. It reads as thus

 Section 16: Competence of an arbitral tribunal to rule on its jurisdiction. 

(2) A plea that the arbitral tribunal does not have jurisdiction shall be raised not later than the submission of the statement of defence; however, a party shall not be precluded from raising such a plea merely because that he has appointed, or participated in the appointment of, an arbitrator. 

(3) A plea that the arbitral tribunal is exceeding the scope of its authority shall be raised as soon as the matter alleged to be beyond the scope of its authority is raised during the arbitral proceedings. 

(4) The arbitral tribunal may, in either of the cases referred to in sub-section (2) or sub-section (3), admit a later plea if it considers the delay justified. 

(5) The arbitral tribunal shall decide on a plea referred to in sub-section (2) or sub-section (3) and, where the arbitral tribunal takes a decision rejecting the plea, continue with the arbitral proceedings and make an arbitral award. 

(6) A party aggrieved by such an arbitral award may make an application for setting aside such an arbitral award in accordance with section 34.

The Courts time and again have fortified and reaffirmed the autonomy, power and the jurisdiction of the arbitral tribunal which is synonymous to that of the court. But when a Tribunal exercising its power under section 16 exceeds its scope of jurisdiction or disregards its jurisdiction the statutory provision under section 37 of the act provides that it can be appealed. It stipulates as thus:

(2) Appeal shall also lie to a court from an order of the arbitral tribunal— (a) accepting the plea referred to in sub-section (2) or sub-section (3) of section 16; or 

However, when a Tribunal accepts or rejects a jurisdictional plea under sub section (2) and (3) whether an appeal under section 37 of the Act or a writ under article 227 is maintainable?

The arbitration is a self contained code and section 5 of the act ensures minimal judicial interventions. As per the statutory scheme an order which can be appealable under section 37, only if the Tribunal accepts that it has no jurisdiction under section 16(2)&(3). The Section bars an appeal against any other order apart from those specifically mentioned. 

The Supreme Court in MCM Worldwide Pvt. Ltd. v. Construction Industry Development Council 2026INSC425 observed that “Section 37 of the Arbitration Act, titled ‘Appealable orders’, provides for an appeal being filed only in the event an arbitrator upholds the plea of lack of jurisdiction under Section 16(2) or (3), i.e., where the arbitrator puts an end to the arbitration proceedings by accepting the plea that he/she has no jurisdiction to proceed further.”

The SC further observed that in the event the Tribunal rejects the jurisdictional plea under section, section 16(5) would kick in and the Tribunal must proceed to adjudicate the dispute and pass the award. Any challenge thereto must be proceeded under section 34 of the Act. The relevant paras reads thus:

“……..if the arbitrator rejects that plea, Sections 16(5) and Section 16(6) would apply. In that situation, there is no option for the party aggrieved by the decision of the arbitrator upon the application filed under Section 16 except to wait till the conclusion of the arbitral proceedings and then raise that issue by way of an application under Section 34 against the final award.”

16……..it is only an order accepting the plea of lack of jurisdiction under Section 16(2) or (3) that is amenable to appeal directly, without going through the process under Section 34 thereof. This crucial aspect of the matter was entirely lost sight of.”

A writ under art 227 is not maintainable against an order passed under section 16 of the Act.

The SC in Tarini Prasad Mohanty v. M/s Sunflag Iron and Steel Company Limited, reported in 2026 INSC 566, also observed that a High Court cannot interfere with an Arbitral Tribunal's orders passed under Section 16 of the Arbitration and Conciliation Act via writ jurisdiction unless there is a complete lack of inherent jurisdiction. 

(Also see Serosoft Solutions Pvt. Ltd. vs. Dexter Capital Advisors Pvt. Ltd.,  Deep Industries Ltd. v. Oil and Natural Gas Corporation Ltd. & Anr.2025 INSC 26 4 (2020) 15 SCC 706  

On a similar footing, the Supreme Court in Manash Kamal Bezboruah vs M/S Bokahola Tea Company Private 2026 INSC 701 while deciding on a factum that the Tribunal had passed an order rejecting deletion from the array of parties under section 16 and aggrieved by the same the parties had preferred a writ against the said order. The Supreme court opined that High Courts cannot use Article 227 to review an Arbitral Tribunal's rejection of a Section 16 jurisdictional plea. The Court clarified that such challenges must wait until the final award, holding that Article 227 interference is limited to cases with a patent lack of inherent jurisdiction, upholding the doctrine of kompetenz-kompetenz. The revenant paras reads as thus:

“Therefore, this is a settled position of law that the High Court must exercise extreme circumspection while invoking its supervisory jurisdiction under Article 227 of the Constitution of India in matters challenging an Arbitral Tribunal’s rejection of an application under Section 16 of the Act. In the absence of such a manifest jurisdictional defect, judicial interference at the interlocutory stage would be unwarranted and contrary to the legislative policy of minimal court intervention in arbitral proceedings. Orders passed by the Tribunal on an application under Section 16 of the Act are ordinarily amenable to challenge only under Section 34 of the Act upon the conclusion of the arbitral proceedings and the passing of the final award. It is always safe for the High Courts that, before entertaining revision petitions under Article 227 of the Constitution of India against the Orders passed by the Arbitral Tribunal, while exercising powers under Section 16 of the Act, it should record a prima facie finding regarding the patent lack of inherent jurisdiction and that too after providing an opportunity of hearing to the rival party/parties.”

Thus from the aforesaid precedents it is clear that a writ is not maintainable against an order under section 16 and the right remedy is to wait for the finality of the award and seek the same under section 34. The SC herein has correctly pointed out that a writ petition is normally not maintainable unless there is a patent lack of inherent jurisdiction of the Tribunal order under section 16. However this judgement Manash kamal (supra)does not elucidate the statutory maintainability of a section 16 appeal under section 37 of the Act in the event of addition or deletion of a party by the Tribunal by exercising its jurisdiction under section 16. 

The Tribunal’s power to add or delete a party under section 16 

The Supreme Court in Asf Buildtech Private Limited vs Shapoorji Pallonji And Company Private 2025 INSC 616 decided the issue of ―whether the tribunal has the power to implead/join non-signatories to the arbitration agreement. It was held that the tribunal is empowered to examine whether a non-signatory is bound by the arbitration agreement and can implead such a necessary party. It opined that 

“―103. Thus, even in the absence of the non-signatory being made a party to the proceedings before the Referral Court, and where the question of its impleadment has neither been raised nor addressed or left open to the Arbitral Tribunal by the Referral Court, the Arbitral Tribunal would be full empowered to examine this issue in the first instance and determine whether any non-signatory is bound by the arbitration agreement based on the factual circumstances of the case, and if necessary, implead such non-signatory to the arbitration proceedings. 

110…….On the other hand, the apprehensions of prejudice can be properly mitigated by leaving such question for the Arbitral Tribunal to decide, as such party can always take recourse to Section 16 of the 1996 Act and thereafter in appeal under Section 37, and where it is found that such party was put through the rigmarole of arbitration proceedings vexatiously, both the Tribunal and the courts, as the case may be, should not only require that all costs of arbitration insofar as such non-signatory is concerned be borne by the party who vexatiously impleaded it, but the Arbitral Tribunal would be well within its powers to also impose costs”

The SC in ASF buildtech had affirmed that even if the referral court had prime facie decided the parties to an arbitration, the Tribunal had the jurisdiction to decide on the same and add or delete a party under section 16. However any prejudice to the same could be appealed under section 37 of the Act. 

Whether an appeal under section 37 is maintainable against a Tribunal’s order accepting or rejecting addition or deletion of party under section 16 of the Act.

From the aforesaid SC judgments, it is clear that only an acceptance of a jurisdictional plea under 16(2) and (3) is appealable under 37 of the Act. Now with the passing obiter by the SC in Asf Buildtech, it brings to our concerns that under what circumstances can it be considered that the Tribunal has accepted the plea under section 16 which is amenable to an appeal under section 37.

When a Tribunal accepts the plea of impleadment of a party or deletion of a party, does this amount to acceptance of jurisdictional plea under 16(2) and (3) which can be amenable to an appeal under section 37 of the Act. There have been contradicting jurisdictional findings to this issue. 

As discussed above, the SC in Manash kamal (supra) deciding on a similar factum where the Tribunal had rejected the deletion of a party only observed that a writ petition is not maintainable against the said order and have not given any finding as far as maintainability of an appeal under section 37 is concerned. However in ASF buildtech, the SC had clarified that the determination made by the tribunal on the issue of impleadment and jurisdiction would be amenable to challenge under Section 16 and 37 of the Act. However there have been contrasting findings. 

The Delhi High court in Era Infra Engineering Limited vs National Highways Authority Of India ARB. A. (COMM.) 47/2025  while deciding on a factum that the Tribunal had rejected the impleadment of a party, and the same was appealed under 37 of the Act. On the maintainability of the appeal,the court while heavily relying on ASF buildtech opined that 

“19.The Supreme Court in ASF Buildtech (P) Ltd. (supra) while holding that the issue of impleadment should be left to be decided by the tribunal, considered that a statutory remedy would be available against the decision of the tribunal. In case the preliminary objection of the respondent that an appeal under Section 37 of the Act is not maintainable is accepted, the only remedy if available to the petitioner would be under Section 34 of the Act i.e. after passing of the arbitral award. Prejudice would be caused to the petitioner for having to challenge the award within the limited scope under Section 34 of the Act and that too without participating in the arbitral proceedings. Moreover, in case if under section 34 it is concluded that the petitioner in spite of being a non-signatory to the agreement is a necessary party the entire proceedings shall come to naught for non-impleadment of a necessary party in arbitral proceedings. The parties would then have to undergo another round, resulting in delay which would be contrary to the basic objective of speedy and efficient dispute resolution through arbitration. 

20. The rejection of the application for impleadment brings a dead end to the proceedings so far as the non-signatory seeking impleadment is concerned. The wait for seeking remedy till passing of the award and thereafter in case of success, the entire arbitration exercise to be undertaken de novo would defeat the object of the enactment of the Act especially when a right to appeal is provided on a conjoint reading of Sections 16 and 37 of the Act 

24……The rejection of the application for impleadment of a nonsignatory to the CA falls within the ambit of Sections 16(2) & (3) and is appealable under Section 37 of the Act.”

The Delhi High Court in the aforesaid judgment has clearly opined that the rejection of an application for implead falls under the ambit of 16(2) & (3) which is appealable under section 37 of the Act.

Per contra another judgement of the Delhi High Court in  Ms Nidhi Arya Through Special Power Of Attorney Holder Shri Ramesh Dalal Vs M/S Oyo Hotels And Homes Pvt Ltd & Ors 2026 DHC 1750 on a factum wherein the Tribunal had rejected the impleadment application, the High Court observed that a writ petition to challenge the same in not maintainable but granted the parties the leave to take up the issue at an appropriate stage i.e under 37 or 34 of the Act. The obiter reads thus.

“10.In the instant case, as regards the decision passed by the Tribunal refusing impleadment of respondent nos. 2, 3 and 4, the said issue can be taken up at an appropriate stage under Section 34/37 of the Act, 1996, if need arises.

The Need for Legislative or Judicial Clarity 

Thus, from the aforesaid judgments of the supreme court the law is clear that courts have to be circumvent while exercising a writ against an order passed by the Tribunal under section 16 and is usually not maintainable. With regard to whether the order adding or deleting a party by the Tribunal under section 16 of Act is appealable under section 37, Asf Build tech answers in the affirmative and the same has been elucidated by the Delhi High court in Era Infra (supra). It is important to note that the Delhi HC judgement in Era infra was passed prior to the SC judgment in Manash kamal (supra) which held that section 16 order can only be challenged after the passing of the award under section 34. However the said judgement does not comment or take note of the applicability of section 37 and whether the Tribunal exercising its jurisdiction under section 16 by adding or deleting a party can be considered as accepting or rejecting the plea which can be amenable to appeal under section 37 of the Act. have been contrasting findings 

If parties aggrieved by the order of addition or deletion by the Tribunal were to wait till the passing of the award and challenge the same under section 34, it would be prejudicial to the aggrieved party in terms of cost and time and would especially be a violation of natural justice. It is Equally important to keep in mind, section 5 of the act and prevent minimal judicial interference as failure to maintain the same would defeat the scope of the act, however, the power of section 16 now conferred upon by many Precedents cannot be left unchecked and leave it to be challenged only at the stage of section 34. The scope of 34 has also been narrowed and can only be entertained if the award is patently perverse. The Decision under section 16 on Addition or deletion of a party being preliminary yet of major importance would decide the outcome of the arbitration proceedings, any order of failure to make the concerned interested party a part of the proceedings may alter the course of the proceedings causing grave prejudice. The failure for an instant, statutory appeal thereto would defeat the very purpose of arbitration

There has to be a clear binding precedent on under what circumstances a Tribunal jurisdiction is deemed to have exercised and accepted its jurisdiction under section 16 especially with regard to addition or deletion of a party and the maintainability of an appeal under 37 thereto. This would minimise the area of conflict and the burden of section 34 courts and also cut down the cost of the parties. Further the court or the legislation ought to clarify whether a Tribunal exercising its jurisdiction under section 16, especially in matters related to joinder and non-joinder of the parties (since the courts have granted autonomy to the Tribunal) is amenable to appeal under 37. By a bare reading of section 16(2)&(3), if Tribunal proceeds to accept and decide a jurisdictional plea of addition or deletion of party any order whether granting or rejecting the said relief by the Tribunal would amount to accepting the plea under 16(2) and (3) which would be amenable to appeal as per section 37 2(a) of the act i.e Appeal shall also lie to a court from an order of the arbitral tribunal— (a) accepting the plea referred to in sub-section (2) or sub-section (3) of section 16)

Thus, ASF build tech (supra) lays down a blueprint of the aforesaid statutory steps and the Delhi High Court in Era Infar (supra) has personified the same in detail. However, the recent SC judgement of MCM and Manash kamal (supra) and Tarini Prasad (supra) opine to the contrary, but the said precedents do not shed any discussions on the applicability of appeal under section 37 (2) (a) against a section 16 order. 

Further in MCM the SC has only clarified that an appeal under 37 is only maintainable against a plea accepting section 16(2)(3) i.e where the arbitrator puts an end to the arbitration proceedings by accepting the plea that he/she has no jurisdiction to proceed further.  I beg to differ with the said obiter as clearly the legislation did not envisage an appeal under 37 against section 16 only to that limited essence. 

Since courts through various major judgments have upheld the autonomy of the Tribunal, the Courts should also be mindful of the fact that the arbitration process is continuing against the envisaged scope of the Act. Section 16 being the major threshold of jurisdiction ought to have a statutory remedy to be challenged in the instant or else grave prejudice would be brought to the party suffering leading to even longer litigation after the award is pronounced and at the stage of section 34.

To preserve both tribunal autonomy and commercial efficiency, either the Supreme Court through a Bench ruling or Parliament via amendment must clarify that orders definitively determining the status of joinder or non-joinder of parties under Section 16 constitute appealable orders under Section 37(2)(a) of the Act.