Jurisdictional Objection Rejected By Arbitrator Cannot Be Challenged Under Article 227: Telengana High Court

The Telangana High Court has recently held that its supervisory jurisdiction under Article 227 of the Constitution cannot be invoked to challenge an arbitral tribunal's rejection of a jurisdictional objection when the Arbitration and Conciliation Act, 1996 provides a specific post-award remedy.

Dismissing a writ petition filed by Sagar Asia Private Limited, a Division Bench of Justice Moushumi Bhattacharya and Justice Gadi Praveen Kumar held that the petitioner must await the arbitral award and pursue remedies under Sections 34 and 37 of the Act.

“The petitioner's choice of forum is entirely misplaced as a clear statutory remedy is available under section 16(6) of the Act. That stage has not yet been reached. There is no conceivable reason as to why the Writ Court would impede the momentum of the arbitral proceedings midway,” the court observed.

The dispute arose from an LLP Agreement dated 19 April 2019 executed between the partners of Sagar Asia Global LLP. One of the partners initiated arbitration seeking dissolution of the LLP.

Sagar Asia Private Limited was not a signatory to the LLP Agreement. However, it was impleaded in the arbitral proceedings. It filed an application under Section 16 seeking discharge, contending that it was not bound by the LLP Agreement and that no relief had been claimed against it.

On October 8, 2025, the sole arbitrator rejected the application. The tribunal held that the agreements formed part of a single composite transaction and that the petitioner had active and substantial involvement in the LLP's affairs despite being a non-signatory.

Aggrieved by the rejection of its jurisdictional objection, the company approached the High Court under Article 227, seeking to challenge the arbitrator's decision at this stage.

Examining the statutory framework under Sections 16, 34 and 37 of the Act, the High Court held that once a plea under Section 16 is rejected, the arbitral tribunal is required to continue the proceedings and render its award. Only thereafter can the aggrieved party challenge the award under Section 34. If that challenge fails, an appeal lies under Section 37(1)(c).

The bench clarified that Section 37(2)(a) permits an appeal only where a jurisdictional plea is accepted, not rejected. It held that supervisory interference under Article 227 is permissible only in cases of patent lack of jurisdiction or exceptional perversity, neither of which was made out in the present case.

Observing that “Thus, arresting the continuity of the Arbitral process by recourse to a route outside the contemplation of the Act would be abhorrent to the statutory scheme. The recent pronouncement of the Supreme Court enabling a party to invoke the writ jurisdiction of a High Court in lieu of the prescribed statutory route, has carved out only a very small window (more of a crack) in the comprehensive armour of the Act. The Supreme Court has clarified that the aperture can only be opened for cases of exceptional rarity or a perversity which is patent” the Court dismissed the plea and declined to interfere with the arbitrator's order dated October 8, 2025. 

For petitioner (Sagar Asia Private Limited): Senior Advocate Vivek Reddy representing Ms. Sagarika Koneru.

For respondent Nos.1–3 (Mr. V. Agastya Sagar & Ors.): Advocate D. Pavan Kumar.

For respondent Nos.4–5: Senior Advocate A. Venkatesh representing P. Pavan Kumar Rao.