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Late objection to arbitration invalid - SC

If a party to an agreement joins arbitration proceedings without raising objections, it cannot question the jurisdiction of the arbitration tribunal at a later stage. It would be deemed that the party had waived its right to object to the jurisdiction of the arbitration panel, the Supreme Court has stated in the judgment, Union of India vs M/s Pam Development (P) Ltd. In this case, the government had entered into an agreement with the works contractor to construct an electric loco shed. Later it terminated the contract alleging delay on the part of the contracting firm and inferior quality of work. This led to disputes and the contractor moved the Calcutta High Court to appoint an arbitrator. The High Court appointed a retired judge as the sole arbitrator. He decided in favour of the contractor. The government then moved the High Court to set aside the award. The court dismissed the application, leading to the appeal in the Supreme Court. In the apex court, the government argued that the arbitration tribunal was not properly constituted as the appointment was against the terms of the contract. The Supreme Court rejected the contention and stated that when the government did not object to the appointment of the arbitrator, the order became final. Moreover, the government filed its statement of defence and even raised counter claims before the arbitrator. Therefore, it was too late in the day for the government to question the jurisdiction of the arbitrator.

 Article referred: http://www.business-standard.com/article/opinion/late-objection-to-arbitration-invalid-114032300753_1.html

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