Supreme Court Held That Party Making Challenge To Composition Of Tribunal Must Be Made Within The Timelines Provided Under Section 16 Of A&C Act, Otherwise Waiver Under Section 4 Of A&C Act Is Attracted

The Supreme Court of India, through its judgment dated 11.03.2026 in Municipal Corporation of Greater Mumbai v. M/s R.V. Anderson Associates Ltd¹ held that waiver under Section 4 of the Arbitration and Conciliation Act, 1996 (“A&C Act”) would be attracted in case an objection under Section 16 of A&C Act challenging the composition of tribunal and lack of jurisdiction is not filed prior to the expiry of the timelimit prescribed under Section 16(2) of A&C Act.

In the present case, Municipal Corporation of Greater Mumbai (“MCGM”) entered into a contract with R.V. Anderson Associates Ltd (“R.V. Anderson”) for consultancy services to upgrade sewerage operations and maintenance services. However, dispute arose in respect to payment of outstanding dues. R.V. Anderson invoked the arbitration clause and appointed an arbitrator. Thereafter, MCGM also appointed their arbitrator. However, co-arbitrators appointed the presiding arbitrator after lapse of 30 days. The contract provided that if co arbitrators failed to appoint the presiding arbitrator within 30 days, then International Centre for Settlement of Investment Disputes (“ICSID”) shall appoint the presiding arbitrator. MCGM challenged the arbitral award on ground that the tribunal is improperly constituted.

The court held that the contractual stipulation providing appointment of presiding arbitrator by ICSID upon expiry of the 30-day period is enabling in nature. It does not provide that in case the co-arbitrators do not succeed in appointing the third arbitrator within the period so prescribed, the co-arbitrators will lose their power of appointment of the third arbitrator. Rather, the power of appointment of the third arbitrator is enabling in nature, permitting the parties to approach ICSID after 30 days, in case the co-arbitrators appointed by the parties reach an impasse and do not succeed in making such appointment.

The court also held that when the composition of the tribunal is challenged on the ground of non-compliance of the arbitration clause, the conduct of parties right from the stage of invocation of arbitration clause is relevant, such as the alleged departure from the contractual scheme, acquiescence by a party in its conduct, actions pursuant to the contractual terms, and how a party has understood and acted upon terms of the contract.

Footnote

1. SLP (C) Nos. 23846-47 OF 2025.

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