No immediate appeal lies against arbitral tribunal’s rejection of a jurisdiction objection; challenge may follow the final award, Delhi High Court rules

The parties entered into an agreement dated 24 January 2015 for optical-fibre network works in Patiala.

After payment disputes arose, the respondent, registered under the MSMED Act, approached the Micro, Small and Medium Enterprises Facilitation Council.

Following unsuccessful conciliation, the dispute was referred to arbitration through DIAC.

The appellant objected before the sole arbitrator that the agreement was a composite works contract outside the MSMED Act.

The arbitrator rejected the objection by order dated 1 September 2025.

The appellant challenged that order under Section 37 of the Arbitration and Conciliation Act, 1996; the High Court considered appealability before addressing the merits.

1. Whether an arbitral tribunal’s order rejecting a jurisdictional objection under Section 16 is immediately appealable under Section 37 of the Arbitration and Conciliation Act, 1996

2. Whether the appellant could rely on Section 151 of the Code of Civil Procedure, 1908, to maintain an appeal not provided for by Section 37

Section 37(2)(a) of the Arbitration and Conciliation Act permits an appeal from an arbitral tribunal’s order accepting a plea under Section 16(2) or 16(3), while Section 37(2)(b) permits an appeal from an order granting or refusing an interim measure under Section 17; the right of appeal is statutory and cannot be enlarged beyond the categories specified

Under Sections 16(5) and 16(6), when the tribunal rejects a jurisdictional plea, it must continue the proceedings and make an award, which may then be challenged under Section 34

In MCM Worldwide (P) Ltd. v. Construction Industry Development Council, 2026 SCC OnLine SC 717, the Supreme Court reaffirmed that rejection of a Section 16 plea is not independently challengeable under Sections 34 or 37 at the interlocutory stage; the challenge may be pursued after the final award

Inherent powers under Section 151 CPC cannot create a substantive right of appeal absent statutory authority

The arbitrator rejected the appellant’s jurisdictional objection and allowed the arbitration to continue; the order therefore did not accept a Section 16 plea and was not appealable under Section 37(2)(a).

Nor did it grant or refuse an interim measure under Section 17, as required by Section 37(2)(b).

Applying MCM Worldwide, the Court held that the appellant’s challenge to the rejection of its jurisdictional objection must await the statutory stage following the award.

The nature of the underlying objection—whether the contract fell within the MSMED Act—did not alter the character or appealability of the order.

Section 151 CPC could not supply the missing appellate right.

Those questions, including the effect of the respondent’s MSME registration, were left open; the appellant remained at liberty to pursue remedies available under law.

Pending applications were disposed of, with no order as to costs.