Creative Contractors Ltd (CCL), a listed Company entered into a long-term contract with Mahati Interiors (MI), an architect firm run by Mahati. The contract was finalised on February 15, 2021. As per the terms of the agr

At the core of the principle of Competence-competence is the power to determine jurisdiction. If there is no challenge to the arbitral tribunal's Competence-competence decision, it takes effect within the state of the seat, and the resulting award is recognized under the New York Convention in the same way as an award from an arbitral tribunal whose Competence-competence was challenged before the courts of the seat but upheld. Any limitation of Competence-competence over a question for which jurisdiction may potentially be exercised will be used by respondents to delay and complicate the proceedings. Relying solely on the will of the parties is logically insufficient to encompass Competence-competence determinations on the operability of such will and to give effect to arbitral decisions denying jurisdiction due to the inoperability of party will. Regarding the principle of Competence-competence in India, it is important to consider the extent of powers exercised by a judicial authority when appointing an arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996 (the Act). This scope has been subject to constant changes over time. Before the Arbitration and Conciliation (Amendment) Act, 2015, the section's wording did not provide much clarity on the matters that could be reviewed when granting or denying an application under Section 11. The scope of powers exercised by a judicial authority appointing an arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996, which has been constantly evolving, is relevant in the context of the principle of competence-competence. The scope of power exercised under Section 11 case of SBP & Co. v. Patel Engineering Ltd. , as follows: determining whether there is a valid arbitration agreement between the parties; determining whether the party which has made the request under Section 11, is a party to the arbitration agreement; and whether the party making the motion had approached the appropriate High Court. The court pointed out that the Competence-competence principle would only apply if the parties had gone to the Arbitral Tribunal without recourse to Section 8 or 11 of the Act. If jurisdictional issues are decided under these sections before a reference is made, Section 16 cannot be used by the Arbitral Tribunal to ignore the decision given by the judicial authority. The court held that the finality conferred on an order passed prior to the reference by the statute that creates it cannot be reopened by the arbitrator during the proceeding before the tribunal. Therefore, the case undermined the importance of the Competence-competence principle enshrined in Section 16 of the Act. As a result of this case, the Law Commission in its 246th report recommended that the scope of judicial intervention under Section 11 should be restricted to only examining the existence of the arbitration agreement. This recommendation was incorporated through the insertion of Section 11(6A) by the 2015 amendment. The purpose of this doctrine - minimize judicial interference in disputes submitted to the tribunal by parties. Case of Duro Felguera S.A. v. Gangavaram Port Ltd. also upheld the same. When there is a jurisdictional issue and a determination of competence, the question of limitation often arises. Hon'ble Supreme Court held in Pandurang Dhoni Chougule v. Maruti Hari Jadhav that "a plea of limitation is a plea of law which concerns the jurisdiction of the court which tries the proceedings, as a finding on these pleas in favour of the party raising them would oust the jurisdiction of the concerned court." The Supreme Court in Uttarakhand Purv Sainik Kalyan Nigam Ltd. v. Northern Coal Field Ltd. has ruled that if an application under Section 11 is rejected on the grounds of limitation, the issue should be left for determination by the arbitrator. However, there are exceptions to this doctrine, such as when the arbitration agreement is procured by fraud or deception, or when parties have only entered into a draft agreement as a proposal to arbitrate. Conclusion Therefore, in light of the above mentioned judicial pronouncement, the following can be concluded: Yes, a company can challenge the appointment of arbitrators on the grounds of competence under the Arbitration and Conciliation Act, 1996. The grounds and procedure for such a challenge are outlined in Sections 12 and 13 of the Act. Relevant Provisions: Section 12: This section specifies the grounds for challenging an arbitrator, including circumstances that give rise to justifiable doubts about the arbitrator's independence or impartiality, and lack of the necessary qualifications agreed upon by the parties. Section 13: This section outlines the procedure for challenging an arbitrator. The party must send a written statement of the reasons for the challenge to the arbitral tribunal within 15 days after becoming aware of the constitution of the tribunal or after becoming aware of the circumstances leading to the challenge. When a company seeks to challenge the competence of an arbitrator, it can do so on grounds such as: The arbitrator not possessing the qualifications required by the arbitration agreement. There being justifiable doubts regarding the arbitrator's independence or impartiality. The arbitrator's conduct demonstrating a lack of requisite expertise or competence to handle the arbitration. Therefore, taking into consideration the Arbitration and Conciliation Act, 1996, a company can challenge the appointment of arbitrators on the grounds of competence by adhering to the provisions of Sections 12 and 13. The judicial pronouncement in Perkins Eastman Architects DPC v. HSCC (India) Ltd. underscores the importance of impartiality and independence in the arbitration process. Therefore, if the arbitrator does not meet the agreed qualifications or there are valid concerns about their competence or impartiality, the company can legitimately challenge their appointment to ensure a fair and just arbitration process.