High Court cannot interdict arbitration proceedings when jurisdictional objections can be raised under Section 16.

The Petitioner, Union of India, challenged a decision by the MSME Council, District Shahdara, Delhi, which referred a dispute to the Delhi International Arbitration Centre (DIAC).

The Petitioner contended that the referral was made without considering the mandates of Clause 70 and Clause 72 of the General Condition of Contract IAFW-2249.

The Petitioner sought the High Court's interference under Article 226 of the Constitution to interdict the arbitral proceedings.

1. Whether the High Court should exercise its writ jurisdiction under Article 226/227 to interfere with arbitration proceedings when a jurisdictional objection is raised.

2. Whether an Arbitral Tribunal has the competence to decide upon its own jurisdiction and legal objections regarding the underlying contract.

The Court primarily applied Section 16 of the Arbitration and Conciliation Act, 1996, which empowers an Arbitral Tribunal to rule on its own jurisdiction (competence-competence).

It relied on the Division Bench decision in Corrtech International Pvt. Ltd. vs. DIAC, which affirms that the Act is a complete code and jurisdictional challenges must first be dealt with by the Tribunal.

Furthermore, it applied the restrictive principles established in Bhaven Construction v. Executive Engineer, Sardar Sarovar Narmada Nigam Ltd., which mandates that High Courts should only interfere in arbitral processes in "exceptional circumstances" such as patent lack of jurisdiction or manifest bad faith.

The Court reasoned that the Arbitration and Conciliation Act provides a self-contained mechanism for redressal, specifically via Section 16, which mandates that jurisdictional issues be addressed by the Tribunal before they can be examined by a court under Section 34.

The Judge noted that the Petitioner’s grievance regarding the non-consideration of contractual clauses (Clauses 70 and 72) could be suitably redressed within the framework of the Act.

The Court observed that judicial interference under Article 226 must be "sparing" to maintain the principle of minimal judicial intervention.

Since the Petitioner is not left remediless—as they can challenge a jurisdictional ruling following a final award—the Court found no "exceptional circumstances" or "patent lack of jurisdiction" to justify bypassing the statutory arbitral process.

The Court declined to interdict the arbitral proceedings, affirming that all objections must first be raised before the Tribunal.

The writ petition and all pending applications were dismissed.