Article 227 Cannot be Invoked to Challenge Rejection of Application by Arbitral Tribunal

Source: Supreme Court 

Why in News? 

A bench of Justice KV Viswanathan and Justice Vijay Bishnoi, in Manash Kamal Bezboruah v. M/S Bokahola Tea Company Private Limited & Ors. (2026), held that it is impermissible for a High Court to interfere, under Article 227, with an Arbitral Tribunal's rejection of a Section 16 application, and set aside the Gauhati High Court's order staying the arbitral proceedings. 

What was the Background of Manash Kamal Bezboruah v. M/S Bokahola Tea Company Private Limited & Ors. (2026) Case? 

• The dispute stemmed from a partnership firm constituted in 1948 by the Bezboruah family, governed by a partnership deed executed on November 16, 1976, which contained an arbitration clause. 
• After the plea seeking reference to arbitration was rejected by the trial court and the High Court, the Supreme Court, with the consent of parties, appointed a Sole Arbitrator to adjudicate the disputes. 
• Respondent Nos. 1 to 3, though parties to the proceedings, did not contest the reference. 
• Following the reference, the Arbitral Tribunal framed issues. Respondent Nos. 1 to 3 filed applications seeking deletion of their names, contending that being non-signatories, they were not bound by the arbitration agreement. The Tribunal rejected the applications on August 4, 2025. 
• Aggrieved, Respondent Nos. 1 to 3 filed a revision petition under Article 227 before the Gauhati High Court. The High Court stayed the Tribunal's notices on September 2, 2025, and on January 28, 2026, held the revision petition maintainable. 
• Aggrieved, the appellant moved the Supreme Court. 

What were the Court's Observations? 

• On the scheme of the Act: The Court observed that the Act is a "self-contained code" and that Section 5 restricts judicial intervention except where expressly contemplated under the Act, with Section 16 empowering the Arbitral Tribunal to rule on its own jurisdiction under the doctrine of kompetenz-kompetenz. 
• On the error committed by the High Court: The Court held that the High Court committed an egregious error in entertaining the revision petition under Article 227, since interference under that provision is permissible only in cases of a "patent lack of inherent jurisdiction." 
• On the role of the referral court and non-signatory parties: The Court held that in cases involving the joinder of non-signatory parties, the referral court is only required to prima facie rule on the existence of the arbitration agreement, leaving the determination of whether the non-signatory is bound by the agreement to the Arbitral Tribunal. This gives true effect to the doctrine of kompetenz-kompetenz under Section 16, and accordingly the Tribunal possessed the competence to decide whether Respondent Nos. 1 to 3 were parties to the arbitration agreement notwithstanding their non-signatory status. 
• On the High Court's duty before invoking Article 227: The Court held that the High Court must exercise extreme circumspection while invoking supervisory jurisdiction under Article 227 in matters challenging a Tribunal's rejection of a Section 16 application. In the absence of a manifest jurisdictional defect, interference at the interlocutory stage is unwarranted and contrary to the legislative policy of minimal court intervention in arbitral proceedings. Before entertaining such revision petitions, the High Court should record a prima facie finding of patent lack of inherent jurisdiction, after affording an opportunity of hearing to the rival parties. 
• On relief granted: The Court set aside both impugned orders of the High Court and dismissed the revision petition, allowing the appeal. 

What is Section 16 of the Arbitration and Conciliation Act, 1996? 

Section 16 of the Arbitration and Conciliation Act, 1996 — Competence of Arbitral Tribunal to Rule on its Jurisdiction  

• Sub-section (1): The arbitral tribunal has the power to rule on its own jurisdiction, including objections regarding the existence or validity of the arbitration agreement. For this purpose:  
  • An arbitration clause forming part of a contract is treated as an agreement independent of the other terms of the contract. 
  • A decision by the tribunal that the contract is null and void does not automatically render the arbitration clause invalid. 
• Sub-section (2): A plea challenging the tribunal's jurisdiction must be raised no later than the submission of the statement of defence. Merely having appointed or participated in the appointment of an arbitrator does not preclude a party from raising such a plea. 
• Sub-section (3): A plea that the tribunal is exceeding the scope of its authority must be raised as soon as the matter allegedly beyond its authority arises during the proceedings. 
• Sub-section (4): The tribunal may admit a late plea under Sub-sections (2) or (3) if it considers the delay to be justified. 
• Sub-section (5): The tribunal shall decide on any such plea and, if the plea is rejected, shall continue with the arbitral proceedings and make an arbitral award. 
• Sub-section (6): A party aggrieved by such an arbitral award may seek its setting aside by making an application under Section 34.

Article 227 – Power of Superintendence Over All Courts by the High Court 

• Clause (1) – General power of superintendence: Every High Court has superintendence over all courts and tribunals throughout the territories in relation to which it exercises jurisdiction. 
• Clause (2) – Specific powers without prejudice to generality: The High Court may —  
  • (a) Call for returns from such courts; 
  • (b) Make and issue general rules and prescribe forms for regulating the practice and proceedings of such courts; and 
  • (c) Prescribe forms in which books, entries, and accounts shall be kept by the officers of such courts. 
• Clause (3) – Power to settle fees: The High Court may settle tables of fees allowed to the sheriff, clerks, officers of such courts, and to attorneys, advocates, and pleaders practising therein.  
  • Proviso: Any rules made, forms prescribed, or fee tables settled under clause (2) or (3) must not be inconsistent with any law for the time being in force, and require the previous approval of the Governor. 
• Clause (4) – Exclusion: Nothing in this Article confers on a High Court powers of superintendence over any court or tribunal constituted by or under any law relating to the Armed Forces.