Section 16 of the Act, in line with the kompetenz-kompetenz principle, provides that the arbitral tribunal is competent to rule on its jurisdiction. While Section 16 allows parties to challenge jurisdiction, sub-section (2) bars a party from raising such a challenge after submission of the statement of defence.

In the instant matter, the statement of defence was filed before the erstwhile arbitral tribunal. Subsequently, the tribunal was reconstituted. The Respondent agreed to file its earlier statement of defence before the newly constituted tribunal, then later sought to raise jurisdictional objections.

Ruling

The Supreme Court held that filing a modified statement of defence before a reconstituted tribunal does not create a fresh opportunity to raise jurisdictional challenges already barred under Section 16(2). The right to challenge jurisdiction is exhausted once the statement of defence is filed.