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Civil · Reportable judgment

Municipal Corporation of Greater Mumbai vs M/s R.V. Anderson Associates Limited

Court
Supreme Court of India
Date
11 March 2026
Case No.
Civil Appeal No(s). 3277-78 of 2026
Result
Dismissed
Bench
J.K. Maheshwari
Citation
[2026] 3 S.C.R. 525 : 2026 INSC 228
Acts & Sections
Arbitration and Conciliation Act, 1996
Supreme Court Reports [2026] 3 S.C.R. 525 : 2026 INSC 228
Issue for consideration
Whether the arbitral award deserves to be set aside on the ground of lack of jurisdiction due to improper constitution of the arbitral tribunal or patent illegality.
Headnote

Arbitration and Conciliation Act, 1996 – ss.16, 34, 37, 4 – Constitution of Arbitral Tribunal – Interpretation of arbitration clause – Waiver – The Appellant-MCGM had floated a tender and invited proposals – The stipulated duration for completion of the work under the Agreement was 72 months and the contract was designed to be implemented in stages – The work under the contract was completed – A dispute arose in respect of payment of outstanding dues – On 09.08.2005, the Respondent invoked the arbitration clause as contained in the Agreement – On 07.07.2009, MCGM filed an application u/s.16 of the 1996 Act, challenging the appointment of the Presiding Arbitrator as a ‘nullity’ and seeking consequential reliefs – Arbitral Tribunal dismissed the application holding that the appointment of the Presiding Arbitrator was valid – On 05.06.2010, the Tribunal passed the final award, directing MCGM to pay specified amounts – Application seeking setting aside of the arbitral award u/s.34 of the 1996 Act was filed before the High Court – The Single Judge of the High Court dismissed the application – An appeal was preferred u/s.37 of the 1996 Act – High Court dismissed the appeal and confirmed the judgment and order of the Single Judge – Correctness: Held: 1. In the facts of this case, it cannot be said that the Arbitral Tribunal has been improperly constituted in derogation of the arbitration agreement, or that the interpretation of the arbitration clause as made by the Arbitral Tribunal has resulted in any patent illegality, which would warrant setting aside of the award – As such, the High Court has rightly decided not to interfere with the arbitral award u/s.34(2)(a)(v) or s.34(2A) while rejecting the application to set aside the award. [Para 37]

Read the full headnote (3 more paragraphs)

2. The MCGM raised their objection for the first time, addressing the letter dated 20.02.2009 to the Presiding Arbitrator, alleging that his appointment is a ‘nullity’ since the Co-Arbitrators had not succeeded in appointing the third arbitrator within 30 days and therefore had no power to appoint – In the facts of this case, beyond 30 days from the date of appointment of the second Arbitrator, i.e. 07.10.2005, the MCGM agreed to attempt mediation /conciliation by its letter dated 07.01.2006 and then informed the Co-Arbitrators about there being no mediation / conciliation by its letter dated 15.12.2006 – MCGM passively sat idle while three different persons were appointed as the Presiding Arbitrator under Clause 8.3(b) of the Agreement by the Co-Arbitrators, without any demur. [Paras 54, 63]

3. In the present case, the MCGM was completely aware about the non-compliance of a contractual requirement under the arbitration agreement – It proceeded with the arbitration process without any demur, agreed to keep the arbitration proceedings in abeyance to pursue other methods of dispute resolution (mediation / conciliation), and did not object to such non-compliance on three different occasions when such alleged non-compliance took place – In such a case, filing of an application u/s.16 of the 1996 Act cannot regularize or condone its conduct and such conduct is a relevant consideration to decipher its understanding of the contractual terms while deciding the s.16 application on merits by the Tribunal even in the absence of statutory waiver u/s.4 being attracted – A party cannot keep a ‘jurisdictional ace’ up their sleeve and then claim that filing of the jurisdictional challenge u/s.16 would go back in time and wipe out the past conduct and acquiescence of the party which would clearly evince how the contractual terms were viewed by the parties – If the same is permitted, it will erode the basic principles of alternative dispute resolution and ethos of arbitration. [Paras 66, 67]

Arbitration and Conciliation Act, 1996 – ss.16, 4 – Conduct, Acquiescence and waiver – Discussed. [Paras 39-42, 55, 56]

Keywords: Principle of party autonomy · Co-arbitrators · Jurisdictional ace · Dispute resolution · forum non conveniens · Section 16 of Arbitration and Conciliation Act, 1996 · Mediation/conciliation · Non-compliance of the arbitration agreement · Waiver of right · Conduct · Constitution of Arbitral Tribunal · Arbitral autonomy · Acquiescence · Waiver · Minimum judicial interference · Appointment of arbitrator

As published in the Supreme Court Reports, Supreme Court of India. Headnotes prepared by: Ankit Gyan. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.

Full Judgment Text

Judgment J.K. Maheshwari, J. 1. Leave granted. 2. The instant appeal(s) are directed against the judgment dated 04.07.2025 of the High Court of Bombay (hereinafter referred to as “High Court”) in Arbitration Appeal (L) No. 4339 of 2024 with Interim Application (L) No. 7312 of 2024. 3. By the impugned judgement, the High Court dismissed the appeal of the Appellant – Municipal Corporation of Greater Mumbai (hereinafter referred to as “MCGM”) under Section 37 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as “1996 Act”) and confirmed the judgment and order dated 19th a
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