The Supreme Court has held that a party cannot belatedly challenge the constitution of an arbitral tribunal after participating in arbitration proceedings without objection.

The Bench of Justices J.K. Maheshwari and Atul S. Chandurkar upheld the decision of the Bombay High Court which had refused to set aside the arbitral award under Section 34 of the Arbitration and Conciliation Act, 1996.

The Court ruled that the municipal corporation had acquiesced in the arbitration process and could not later raise a jurisdictional challenge based on the alleged improper constitution of the tribunal.

The dispute traces back to a consultancy contract awarded by the Municipal Corporation of Greater Mumbai in 1995 for a World Bank-funded project aimed at upgrading sewerage operations and maintenance services in Mumbai.

The contract was awarded to R.V. Anderson Associates Ltd., a Canadian engineering consultancy firm, in association with a Mumbai-based partner. The agreement envisaged consultancy services for improving sewerage handling facilities and maintenance protocols over a period of 72 months.

The project work was completed in June 2001, following which the consultant submitted its final report. However, disputes soon emerged regarding payment of outstanding dues under the contract.

During discussions held in October 2002, the municipal corporation rejected most of the claims raised by the consultant, though it made partial payments in February 2004. Dissatisfied with the response, the firm invoked the arbitration clause in August 2005.

A three-member arbitral tribunal was constituted in accordance with the arbitration clause in the agreement. After considering the claims and evidence presented by both sides, the tribunal passed an award on June 5, 2010 in favour of the consultancy firm.

The Municipal Corporation subsequently challenged the award before the Bombay High Court under Section 34 of the Arbitration and Conciliation Act. The challenge was based on three grounds: improper constitution of the arbitral tribunal; limitation; and award of interest.

However, during the appeal before the Supreme Court, the corporation confined its arguments primarily to the issue of lack of jurisdiction due to improper constitution of the tribunal.

Both the Single Judge and the Division Bench of the Bombay High Court rejected the corporation’s challenge, holding that there was no valid ground to interfere with the arbitral award.

Affirming the High Court’s view, the Supreme Court emphasized that parties cannot participate in arbitration proceedings without objection and later attempt to invalidate the process on jurisdictional grounds.

The Court noted that the conduct of the parties during arbitration demonstrated that they had accepted the tribunal’s constitution and participated fully in the proceedings.

The Bench observed that allowing such belated objections would undermine the integrity of arbitration as a dispute resolution mechanism.

The Court cautioned that parties cannot keep a “jurisdictional ace up their sleeve” to challenge the tribunal only after an unfavourable award is passed.

According to the Court, permitting such tactics would erode the principles of alternative dispute resolution and weaken the arbitration framework.

The Supreme Court held that a party that participates in arbitration without timely raising objections to the tribunal’s constitution cannot subsequently challenge the award on that ground.

The Bench also reiterated that courts exercising jurisdiction under Section 34 of the Arbitration and Conciliation Act should not interfere with arbitral awards unless clear statutory grounds are established.

In the present case, the Court found that the arbitral tribunal’s interpretation of the contract and its findings were plausible and supported by the evidence.

Finding no merit in the municipal corporation’s challenge, the Supreme Court dismissed the appeals and upheld the arbitral award.

The Court also confirmed the decisions of both the Single Judge and the Division Bench of the Bombay High Court, concluding that there were no valid grounds to set aside the award under Section 34 of the Arbitration and Conciliation Act, 1996.

Case Details

Case Title: Municipal Corporation Of Greater Mumbai Versus M/S R.V. Anderson Associates Limited

Citation: JURISHOUR-316-SC-2026

Case No.: SLP (C) Nos. 23846-47 OF 2025

Date: 11/10/2026

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