Case at a Glance
In a family tea-estate dispute referred to arbitration by the Supreme Court on consent in 2024, three companies applied to the Arbitral Tribunal to be deleted as parties, arguing they were non-signatories. The Tribunal rejected their plea, but the Gauhati High Court entertained an Article 227 revision and stayed notices against them. The Supreme Court held that while Article 227 cannot be ousted, a High Court may interfere with a Tribunal’s Section 16 ruling mid-arbitration only for patent lack of inherent jurisdiction, after recording a prima facie finding to that effect. Whether a non-signatory is a veritable party is for the Tribunal, and the remedy lies under Section 34 after the award. The High Court’s orders were set aside.
The dispute concerns a family partnership, M/s Boloma Tea Company, constituted in 1948, and related tea companies. The appellant, then an IAS officer, became a sleeping partner in 1974; the partnership deed of 16 November 1976 contained an arbitration clause. In 2012 he filed a title suit at Jorhat seeking accounts and damages for alleged mismanagement. The trial court in 2014 refused to refer the suit to arbitration, relying on Sukanya Holdings (P) Ltd. v. Jayesh H. Pandya, (2003) 04 SC CK 0048, (2003) 5 SCC 531, and the High Court dismissed the revision in 2021.
On 21 November 2024, on consent, the Supreme Court referred the disputes to arbitration and appointed Justice (Retd.) B.P. Katakey as sole arbitrator; the three respondent companies were served but did not contest. In 2025 the companies applied to the Tribunal to be deleted as parties. The Tribunal rejected the applications on 4 August 2025. The High Court, in a revision under Article 227 (CRP/120/2025), stayed notices to the companies on 2 September 2025 and on 28 January 2026 rejected the appellant’s objection to maintainability, relying on Deep Industries and Punjab State Power. The Supreme Court stayed those orders on 16 February 2026.
The Key Question Before the Court
Is a revision petition under Article 227 of the Constitution maintainable against an Arbitral Tribunal’s order rejecting a non-signatory’s application to be removed from the arbitration?
Minimal Judicial Intervention and the ‘Patent Lack of Jurisdiction’ Test
Justice Vijay Bishnoi, writing for the Bench, noted that the Arbitration and Conciliation Act, 1996 “is a Code in itself”, that Section 5 limits judicial intervention and that Section 16 embodies kompetenz-kompetenz. Article 227 is part of the basic structure and cannot be ousted by legislation, but its exercise must respect the Act’s scheme. Drawing on SBP & Co. v. Patel Engineering Ltd., (2005) 10 SC CK 0103, (2005) 8 SCC 618, Deep Industries Ltd. v. Oil and Natural Gas Corporation Ltd., (2019) 11 SC CK 0095, (2020) 15 SCC 706, Punjab State Power Corporation Ltd. v. Emta Coal Ltd., (2020) 17 SCC 93 and Tarini Prasad Mohanty v. Sunflag Iron and Steel Company Ltd., (2026) 05 SC CK 0512, 2026 INSC 566, it held that intervention is confined to orders patently lacking inherent jurisdiction — and “a patent lack of inherent jurisdiction requires no argument whatsoever”. High Courts “must exercise extreme circumspection” and, before entertaining such petitions, should record a prima facie finding of patent lack of jurisdiction after hearing the parties.
Applying Cox and Kings Ltd. v. SAP India Pvt. Ltd., (2023) 12 SC CK 0024, 2024 (4) SCC 1, the Court held that a referral court only prima facie examines the arbitration agreement, and whether a non-signatory is a veritable party is for the Tribunal: “the Arbitral Tribunal possessed the absolute competence to decide the question”. The High Court recorded no specific finding of perversity or patent lack of jurisdiction. The Court also noted that the companies were parties to the 2024 appeal, did not contest it and never sought modification or review, and such multiplicity of proceedings defeats the Act’s objectives. The remedy against a Section 16 rejection “strictly lies under Section 34 of the Act after the pronouncement of the final award”.
What the Court Actually Held
- Article 227 jurisdiction cannot be ousted, but High Courts may interfere with an Arbitral Tribunal’s order during arbitration only where it patently lacks inherent jurisdiction.
- Before entertaining such a petition against a Section 16 ruling, the High Court should record a prima facie finding of patent lack of jurisdiction after hearing the parties.
- Whether a non-signatory is a veritable party to the arbitration agreement is for the Tribunal to decide; the remedy against rejection of a Section 16 objection lies under Section 34 after the final award.
- The High Court’s orders of 2 September 2025 and 28 January 2026 were set aside and CRP/120/2025 dismissed; the Tribunal is to decide the companies’ status independently and complete the proceedings expeditiously.
Why This Judgment Matters
- Mid-arbitration writ and revision petitions are a major source of delay; this ruling tightens the gate.
- It confirms that disputes about joinder of non-signatories (group of companies, veritable party) belong first to the Tribunal.
- It requires High Courts to record a prima facie finding of patent lack of jurisdiction before entertaining such challenges.
What Should Advocates Take Away From the Judgment?
For Parties in Arbitration
- If a Tribunal rejects your Section 16 objection, your main remedy is a Section 34 challenge after the award, not an immediate writ or revision.
- Raise objections at the earliest stage, including before the referral court, and seek modification or review there if needed.
For Counsel
- Opposing an Article 227 petition mid-arbitration, insist that the High Court first record a prima facie finding of patent lack of inherent jurisdiction.
- Cite Cox and Kings to argue that veritable-party status is for the Tribunal.
- Point to the challenger’s conduct (non-contest, no review) as a reason to decline interference.
Key Takeaways
- The Arbitration Act is a self-contained code with minimal judicial intervention.
- Article 227 survives but is reserved for patent lack of inherent jurisdiction.
- Non-signatory joinder questions are for the Tribunal under Section 16.
- Challenge lies under Section 34 after the final award.
Frequently Asked Questions
Can a High Court ever interfere with an arbitral tribunal’s order under Article 227?
Yes, but only exceptionally, where the order patently lacks inherent jurisdiction, and after recording a prima facie finding to that effect having heard the parties.
Who decides whether a non-signatory company is bound by the arbitration agreement?
The Arbitral Tribunal, under Section 16, applying the principles in Cox and Kings. The referral court only examines the agreement prima facie.
What can a party do if its Section 16 objection is rejected?
It must ordinarily wait for the final award and raise the objection in a challenge under Section 34 of the Act.
Conclusion
Manash Kamal Bezboruah v. Bokahola Tea Company reinforces the Supreme Court’s consistent message: arbitration must be allowed to run its course, and constitutional supervisory jurisdiction is a narrow safety valve, not a parallel appeal.
Practical takeaway: Non-signatories dragged into arbitration should argue their case before the Tribunal and preserve it for Section 34; an Article 227 petition will rarely succeed.
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