The IFFCO Case clarified that the scope of enquiry under Section 16 of A&C Act is limited

to the Three Determinatives only. As a result, issues (of preliminary nature) such as an issue
of limitation or non-joinder of necessary or proper parties could not be raised under Section
16 of A&C Act and remained a subject for determination as part of the merits of the case.

However, the SC, subsequently in Uttarakhand Purv Sainak Kalyan Nigam Limited vs.
Northern Coal Field Limited6 ("UPSKNL Case") while dealing with the issue whether the
court is entitled to reject an application under Section 11 of the A&C Act, on the ground that
it was barred by limitation, held that the issue of limitation along with all other preliminary
jurisdictional issues cannot be determined by the court under Section 11 of the A&C Act. In
UPSKNL Case, the SCI after incorrectly relying on the IFFCO Case, observed that the
arbitral tribunal (as and when constituted) shall be empowered to determine the issue of
limitation under the Section 16 of the A&C Act.

Relying on the UPSKNL Case, the High Court of Bombay ("BHC") recently in C.
Shamsuddin vs. Now Realty Ventures LLP and others7 ("RVL Case") also gave a similar
finding and held that the question of limitation will be kept open for decision by the arbitral
tribunal under Section 16 of A&C Act. Interestingly, similar to UPSKNL Case, RVL Case
was also concerned with an application under Section 11 of the A&C Act.

In view of the divided findings of the SCI in the IFFCO and UPSKNL judgment (both
division benches) and of the BHC in RVL Case, the scope of jurisdiction under Section 16 of
the A&C Act remains unclear.

As mentioned above, the interesting facet is the absurdity of conclusions arrived at by both
UPSKNL Case and RVL Case by incorrectly interpreting and applying the IFFCO Case and
has left the scope of 'jurisdiction' under Section 16 unclear. Therefore, a decision of the SCI
clarifying on the issue of scope of 'jurisdiction' under Section 16 is much awaited, as the
existing dubiety might put the Arbitral Tribunals in a dilemma in interpreting the scope of
jurisdiction under Section 16 of the A&C Act.

In view of the aforesaid position, it can be argued that the reliance in respect to the law on the
scope of jurisdiction under Section 16 of the A&C Act shall be placed upon the IFFCO
judgment and not on UPSKNL judgment, as the IFFCO judgment has specifically dealt with
the issue of scope of jurisdiction under Section 16 of the A&C Act and has stated the law in
relation to its scope more elaborately and accurately.

In any case, the UPSKNL Case was limited to examining whether the courts were
empowered to determine the issue of limitation as part of an application filed under Section
11 of the A&C Act. Thus, the observation of the SCI in UPSKNL Case that all the
preliminary issues including limitation will be kept open for decision by the arbitral tribunal
under Section 16 of the A&C Act, was clearly an obiter dictum, and thus not binding as a
precedent.

Till the time an issue arises before the SCI driving it to deliver a more focused judgment on
the scope of Section 16 of the A & C Act, the position as laid down under the IFFCO Case
should be held to be the predominant position