The Bombay High Court has refused to interfere with a sole arbitrator’s decision on its jurisdiction to hear a ₹45.99‑crore claim by bankrupt travel company Cox & Kings against SAP India [SAP India Pvt Ltd v. Cox and Kings].In a verdict delivered on December 23, a division bench of Justices RI Chagla and Farhan P Dubash dismissed a writ petition filed by SAP India Private Limited challenging two orders of a sole arbitrator passed under Section 16 of the Arbitration and Conciliation Act, 1996 (competence of arbitral tribunal to rule on its jurisdiction).The Court held that the case does not meet the rare and exceptional threshold for judicial intervention at the Section 16 stage..The bench held that the case did not fall within the narrow category of “rare and exceptional” situations warranting writ interference with an arbitral tribunal’s ruling on its own jurisdiction and that SAP’s objections could instead be raised in a post‑award challenge under Section 34 of the Arbitration and Conciliation Act..The dispute arose from three interconnected agreements between SAP India and Cox & Kings - SAP Software and License Support agreement, Services General Terms and Conditions (GTC) agreement and SAP Global Service and Support agreement.An earlier arbitral tribunal headed by former Supreme Court judge Justice Madan B Lokur had been constituted on SAP’s claim of about ₹17 crore and Cox & Kings’ counterclaim of ₹45.99 crore. However, those proceedings were adjourned sine die (without any specific date of resumption) after the travel company was admitted to corporate insolvency by the National Company Law Tribunal (NCLT) on October 22, 2019..Shortly after insolvency proceeded commenced, Cox & Kings through its then Insolvency Resolution Professional (IRP), invoked the arbitration clause in the GTC, which had not been invoked earlier. SAP opposed this invocation.Cox & Kings then approached the Supreme Court, which on September 9, 2024 appointed former Chief Justice of Bombay High Court Justice Mohit Shah as a new sole arbitrator..In that order, the Court expressly left SAP free to press all its jurisdictional and other objections before the arbitrator under Section 16, directing the tribunal to decide those first before going into the merits of the claim.The arbitral tribunal of Justice Shah rejected SAP’s applications under Section 16 on the jurisdiction after holding that all three contracts formed a composite arrangement. This was challenged by SAP before the High Court..SAP argued that the Justice Shah tribunal was appointed only under the GTC/Services framework and could not entertain claims traceable to the license agreement, which had a distinct arbitration clause and institutional mechanism.It contended that by treating the three contracts as a composite transaction and assuming jurisdiction over license-based claims, the tribunal had “ex-facie usurped jurisdiction”, warranting writ interference even at an interlocutory stage..The High Court held that at least at the pre-award stage, it could not say the tribunal had acted without jurisdiction or with patent illegality, and stressed that the proper remedy for SAP was to wait for the final award and then move a Section 34 challenge.Cox & Kings relied on Supreme Court decision to argue that writs against Section 16 orders are barred except in extraordinary situations.The Bench accepted this and held that SAP had already had “three bites at the cherry” (once before the Supreme Court and twice before the arbitrator) and “cannot be permitted a fourth”.It held that the present case does not meet the high threshold for writ intervention and dismissed the same..Senior advocate Navroz H Seervai with advocates Yohaann Limathwalla, Farhad Sorabjee, Pratik Pawar, Shanaya Cyrus Irani and Siddhesh S Pradhan briefed by J Sagar Associates appeared for SAP. Advocates Hiroo Advani, Navdeep Dahiya, Janhavi Sakalkar and Esham Karanjikar briefed by Bharucha & Partners appeared for Cox & Kings. [Read Order].Follow Bar and Bench channel on WhatsAppDownload the Bar and Bench Mobile app for instant access to the latest legal news.
