M/s GVV Constructions Private Limited v. Union of India & Ors.

Supreme Court of India   •   08 September 2026   •   2026 INSC 976
Case Summary
Whether a contractual dispute falls within an “excepted matters” clause is for the Arbitral Tribunal to determine in the first instance under Section 16 of the Arbitration and Conciliation Act. A writ court cannot pre-empt or restrict that jurisdiction.
Coram: Justice Pamidighantam Sri Narasimha and Justice Alok Aradhe
Area of Law: Arbitration / Civil Law — Section 16, Kompetenz-Kompetenz, Excepted Matters & Judicial Intervention
Citation: 2026 INSC 976
Date: 08 September 2026

Legal Issue

Whether a High Court, while exercising jurisdiction under Article 226 of the Constitution, could issue observations or directions that effectively restrict the Arbitral Tribunal's authority to determine whether a dispute concerning termination of a contract falls within an “excepted matters” clause.

The Supreme Court specifically examined whether such a direction impinges upon the Arbitral Tribunal's power under Section 16 of the Arbitration and Conciliation Act, 1996, which embodies the principle of Kompetenz-Kompetenz.

Brief Facts

GVV Constructions was awarded a contract by South Central Railway for doubling works on the Guntur–Guntakal railway section. A formal contract was executed on 30 November 2017.

On 10 June 2022, the Railway terminated the contract under Clause 62 of the Standard General Conditions of Contract (GCC), forfeited the performance guarantee and security, and denied compensation.

GVV Constructions challenged the termination through a writ petition. The Single Judge dismissed the petition, observing that complicated factual disputes were inappropriate for adjudication under Article 226 and that the contractor could raise its defences before the Arbitral Tribunal.

On appeal, the Division Bench set aside the Single Judge's finding that there was no irregularity in termination and permitted the contractor to raise its claims before the Arbitral Tribunal. However, it stated that the Tribunal should decide those claims strictly in accordance with the contractual terms.

Arbitration subsequently commenced, and the Tribunal framed issues including whether the termination was valid and whether certain claims constituted “excepted matters” and were therefore non-arbitrable.

The matter consequently reached the Supreme Court regarding the permissible limits of judicial interference with the Tribunal's jurisdiction.

Held / Decision

The Supreme Court clarified that the High Court's direction could not be construed as restricting the jurisdiction of the Arbitral Tribunal.

The Court held that whether a particular dispute falls within an “excepted matters” clause is a question falling within the competence of the Arbitral Tribunal under Section 16.

The Tribunal therefore has the authority to determine, in the first instance, whether the dispute concerning termination of the contract falls within its jurisdiction.

A writ court exercising jurisdiction under Article 226 cannot prescribe beforehand how the Tribunal should determine such jurisdictional questions or place constraints upon the Tribunal's Section 16 inquiry.

The Court clarified that the Division Bench's direction requiring the Arbitrator to decide claims according to the contract must not be interpreted as curtailing the Tribunal's jurisdiction to adjudicate the dispute concerning termination.

The appeal was accordingly disposed of, with no order as to costs.

Important Observations

1. Kompetenz-Kompetenz is central to the Arbitration Act
Section 16 empowers an Arbitral Tribunal to rule upon its own jurisdiction, including objections concerning the existence, validity and scope of the arbitration agreement.

2. “Excepted matters” must first be examined by the Tribunal
Whether a particular claim is covered by or excluded under an “excepted matters” clause is ordinarily a question for the Arbitral Tribunal itself.

3. Courts should exercise limited intervention
The judgment reiterates the policy embodied in Section 5 of the Arbitration and Conciliation Act, restricting judicial intervention in arbitral proceedings except where the Act permits it.

4. Writ courts cannot pre-determine arbitral jurisdiction
A High Court exercising Article 226 jurisdiction cannot prescribe in advance how the Tribunal must determine its jurisdiction or arbitrability.

5. Section 16 applies to termination disputes as well
Whether the dispute regarding termination is wholly or partly an excepted matter outside the Arbitrator's jurisdiction is itself a question the Tribunal must consider in the first instance.

6. “When in doubt, do refer”
The Court traced the development of Indian arbitration law toward progressively narrower judicial scrutiny at the referral stage, including the principle that doubtful questions of arbitrability should ordinarily be left to the Tribunal.

Full Headnote

Arbitration and Conciliation Act, 1996 — Sections 5 and 16 — Kompetenz-Kompetenz — Jurisdiction of Arbitral Tribunal — Excepted Matters — Termination of Contract — Arbitrability — Article 226 of Constitution — Judicial Intervention — Limits of Writ Court's Jurisdiction

The Supreme Court considered the extent to which a constitutional court could make observations affecting the jurisdiction of an Arbitral Tribunal where the underlying contract contained clauses excluding certain disputes as “excepted matters”.

The appellant-contractor had entered into an agreement with South Central Railway for infrastructure works. Following termination of the contract by the Railway, the contractor invoked writ jurisdiction and subsequently arbitration. The Arbitral Tribunal framed issues concerning, inter alia, the validity of termination and whether certain claims were barred as “excepted matters”.

The Division Bench of the High Court permitted the appellant to raise its claims before the Arbitral Tribunal but observed that the Tribunal should decide them strictly in accordance with the terms of the contract.

Held: Section 16 of the Arbitration and Conciliation Act incorporates the principle of Kompetenz-Kompetenz and empowers an Arbitral Tribunal to rule upon its own jurisdiction.

Whether a particular claim falls within or outside an “excepted matters” clause of a works contract falls squarely within the Tribunal's competence under Section 16 in the first instance.

The Supreme Court traced the evolution of the law governing judicial scrutiny at the arbitration referral stage and reiterated the progressively narrower conception of the court's role. Questions concerning the scope of an arbitration agreement and arbitrability are ordinarily matters for determination by the Tribunal, subject to the limited statutory framework for judicial intervention.

A writ court exercising jurisdiction under Article 226 cannot pre-determine the manner in which an Arbitral Tribunal should determine its own jurisdiction, particularly where the writ court itself has declined to adjudicate the underlying factual dispute.

Whether the termination dispute is wholly or partly an “excepted matter”, whether it falls outside the Arbitrator's jurisdiction, and what remedy remains available if it does, are matters which Section 16 commits to the Arbitrator in the first instance.

Accordingly, the Supreme Court clarified that the High Court's direction requiring the Arbitrator to decide claims strictly in accordance with the contractual terms shall not be construed as restricting or impinging upon the jurisdiction of the Arbitral Tribunal to adjudicate the dispute concerning termination of the contract.

The Court expressly refrained from expressing any opinion upon the merits of the underlying dispute.

Appeal disposed of. No order as to costs.

Legal Significance

The judgment reinforces the Kompetenz-Kompetenz principle under Section 16 and the autonomy of arbitral tribunals in determining the boundaries of their own jurisdiction.

It is particularly important for construction, infrastructure and government contracts containing “excepted matters” clauses, because the mere assertion that a claim is contractually excluded from arbitration does not permit a writ court to conclusively pre-determine the Tribunal's jurisdiction.

The ruling also reinforces India's broader arbitration policy of minimal judicial intervention and confirms that jurisdictional and arbitrability questions should ordinarily be considered by the Arbitral Tribunal in the first instance.

Disclaimer: This case summary and headnote are provided for informational and educational purposes. Readers should refer to the original judgment for the complete text and authoritative legal position.