Pramod Kumar Goel vs Union Of India
- Court
- Delhi High Court
$~J
* IN THE HIGH COURT OF DELHI AT NEW DELHI
%
Judgment pronounced on: 16.10.2026
# CNR No.DLHC010374732026
ARB.P. 1399/2026
+
PRAMOD KUMAR GOEL .....Petitioner
Through: Mr. Rudraksh Gupta, Adv. (through
v/c)
versus
UNION OF INDIA .....Respondent
Through: Mr. Adhitya Srinivasan, SPC, Mr.
Srajan Tyagi, Mr. Rishabh Kanojiya
and Mr. Rishiraj Singh, Advs., UOI.
CORAM:
HON'BLE MR. JUSTICE SACHIN DATTA
JUDGMENT
1. The present petition has been filed under Section 11(6) of the
Arbitration and Conciliation Act, 1996 (“ A&C Act ”) seeking appointment of
a Sole Arbitrator to adjudicate the disputes between the parties arising out of
Agreement No. 37/EE(E)/DED-41/2025-26.
2. The respondent invited percentage rate e-tenders vide NIT No.
09/NIT/DC-IV/2025-26 for the work “Renovation & Furnishing of 4th Floor
and Modification of Ground Floor, Corporate Office of Punjab & Sind
Bank, East Kidwai Nagar, New Delhi”. The bid of the petitioner, a sole
proprietorship concern carrying on business as a civil and electro-
mechanical works contractor, was accepted vide Letter of Acceptance dated
01.01.2026 for a sum of Rs. 8,66,99,100/-. The petitioner furnished
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performance guarantee of Rs. 43,35,000/- on 08.01.2026, whereafter Letter
of Commencement dated 14.01.2026 was issued, stipulating the date of start
as 11.01.2026 and the date of completion as 10.06.2026.
3. The disputes arise out of the Manufacturer’s Authorisation
Forms/consent documents furnished by the petitioner in respect of certain
specialised sub-heads. The petitioner submitted documents issued through
authorised channel partners of Cisco Systems and Gallagher Security on
16.01.2026; the respondent, vide letter dated 28.01.2026, called upon it to
furnish documents issued directly by the Original Equipment Manufacturers.
A show cause notice dated 03.02.2026 was issued under Clause 3 of the
agreement, to which the petitioner replied on 06.02.2026. Vide letter dated
16.02.2026, the respondent forfeited the performance guarantee and did not
permit the petitioner to participate in the tendering process for the said work.
4. The petitioner referred the disputes for conciliation vide reference
dated 23.02.2026 addressed to the Additional Director General (D), CPWD,
and, no proposal for settlement being forthcoming, invoked arbitration vide
notice dated 29.05.2026 under Section 21 of the A&C Act read with Clause
25 of the agreement. The said notice is addressed to the Superintending
Engineer, DC-4, CPWD, East Block, R.K. Puram, New Delhi, described
therein as the “Arbitrator Appointing Authority under Schedule ‘F’”, with
copies to the Additional Director General (D), CPWD and to the Executive
Engineer (E), DED-41, CPWD. It bears the receipt stamps of the offices of
the Superintending Engineer, DC-4, of the Additional Director General,
CPWD, and of the Executive Engineer (E), DED-41. No arbitral tribunal has
been constituted pursuant thereto.
5. There is a controversy between the parties as to which version of
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Clause 25 of the General Conditions of Contract constitutes the arbitration
agreement between them. The petitioner relies upon Clause 25 as annexed to
the petition, which reads as under:
“Clause 25 — Settlement of Disputes & Arbitration
Except where otherwise provided in the contract, all questions and
disputes relating to the meaning of the specifications, design,
drawings and instructions here-in before mentioned and as to the
quality of workmanship or materials used on the work or as to any
other question, claim, right, matter or thing whatsoever in any way
arising out of or relating to the contract, designs, drawings,
specifications, estimates, instructions, orders or these conditions or
otherwise concerning the works or the execution or failure to execute
the same whether arising during the progress of the work or after the
cancellation, termination, completion or abandonment thereof shall
be dealt with as mentioned hereinafter:
(i) If the contractor considers any work demanded of him to be outside
the requirements of the contract, or disputes any drawings, record or
decision given in writing by the Engineer-in-Charge or if the Engineer
in Charge considers any act or decision of the contractor on any
matter in connection with or arising out of the contract or carrying
out of the work, to be unacceptable and is disputed, such party shall
promptly within 15 days of the arising of the disputes request the
Chief Engineer/CPM, or where there is no Chief Engineer/CPM, the
Additional Director General/Special Director General
(CE/ADG/SDG) who shall refer the disputes to Dispute Redressal
Committee (DRC) within 15 days along with a list of disputes with
amounts claimed if any in respect of each such dispute. The Dispute
Redressal Committee (DRC) give its decision within a period of 60
days extendable by 30 days by consent of both the parties from the
receipt of reference from CE/CPM/ADG/SDG. The constitution of
Dispute Redressal Committee (DRC) shall be as indicated in Schedule
‘F’. Provided that no party shall be represented before the Dispute
Redressal Committee by an advocate/legal counsel etc.
The DRC will submit its decision to the concerned ADG/SDG for
acceptance. ADG/SDG in a time limit of 30 days from receipt of DRC
decision will convey acceptance or otherwise on the said decision if
the Dispute Redressal Committee (DRC) fails to give its decision
within the aforesaid period or the ADG/SDG fails to give his
acceptance in the aforesaid time limit or any party is dissatisfied with
the decision of Dispute Redressal Committee (DRC) ADG/SDG then
either party may within a period of 30 days from the receipt of the
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decision of Dispute Redressal Committee (DRC), ADG/SDG or on
expiry of aforesaid the time limits available to DRC/ADG/SDG may
give notice to the Chief Engineer/CPM, CPWD, in charge of the work
or if there be no Chief Engineer/CPM, the Additional Director
General/Special Director General of the concerned region of CPWD
or if there be no Additional Director General/Special Director
General, the Director General, CPWD for appointment of arbitrator
on prescribed proforma as per Appendix XV under intimation to the
other party.
It is a term of contract that each party invoking arbitration must
exhaust the aforesaid mechanism of settlement of claims/disputes
prior to invoking arbitration.
The CE/CPM/ADG/SDG/DG shall in such case appoint the sole
arbitrator or one of the three arbitrators as the case may be within 30
days of receipt of such a request and refer such disputes to
arbitration. Wherever the Arbitral Tribunal consists of three
Arbitrators, the contractor shall appoint one arbitrator within 30 days
of making request for arbitration or of receipt of request by Engineer-
in-charge to CE/ADG/SDG/DG for appointment of arbitrator, as the
case may be, and two appointed arbitrators shall appoint the third
arbitrator who shall act as the Presiding Arbitrator. In the event of —
a. A party fails to appoint the second Arbitrator, or
b. The two appointed Arbitrators fail to appoint the Presiding
Arbitrator, then the Director General, CPWD shall appoint the
second or Presiding Arbitrator as the case may be.
(ii) Disputes or difference shall be referred for adjudication through
arbitration by a Tribunal having sole arbitrator where claimed
amount is Rs. 20 Crore or less. Where claimed Value is more than Rs.
20 Crore, Tribunal shall consist of three Arbitrators as above. The
requirements of the Arbitration and Conciliation Act, 1996 (26 of
1996) and any further statutory modification or re-enactment thereof
and the rules made there under and for the time being in force shall be
applicable.
It is a term of this contract that the party invoking arbitration shall
give a list of disputes with amounts claimed, if any, in respect of each
such dispute along with the notice for appointment of arbitrator and
giving reference to the decision of the ADG/SDG on the
finding/recommendation of DRC.
It is also a term of this contract that any member of the Arbitration
Tribunal shall be a Graduate Engineer with experience in handling
public works engineering contracts, and further he shall have earlier
worked at a level not lower than Chief Engineer/equivalent (i.e. Joint
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Secretary level of Government of India). This shall be treated as a
mandatory qualification to be appointed as arbitrator.
Parties, before or at the time of appointment of Arbitral Tribunal may
agree in writing for fast track arbitration as per the Arbitration and
Conciliation Act, 1996 (26 of 1996) as amended in 2015.
Subject to provision in the Arbitration and Conciliation Act, 1996 (26
of 1996) as amended in 2015 whereby the counter claims if any can be
directly filed before the arbitrator without any requirement of
reference by the appointing authority. The arbitrator shall adjudicate
on only such disputes as are referred to him by the appointing
authority and give separate award against each dispute and claim
referred to him and in all cases where the total amount of the claims
by any party exceeds Rs. 1,00,000/-, the arbitrator shall give reasons
for the award.
It is also a term of the contract that fees payable to arbitral tribunal
shall be as approved by DG, CPWD, OM issued vide
no.2/2006/SE(TLC)/CSQ/137 dated 19-11-2019 (or its latest
amendment as approved by DG, CPWD). This fee shall be shared
equally by parties.
The place of arbitration shall be as mentioned in Schedule F. In case
there is no mention of place of arbitration, the arbitral tribunal shall
determine the place of arbitration.
The venue of the arbitration shall be such place as may be fixed by the
Arbitral Tribunal in consultation with both the parties. Failing any
such agreement, then the Arbitral Tribunal shall decide the venue.”
6. The respondent contends that the aforesaid clause stood superseded,
and relies upon Clause 25 of the CPWD General Conditions of Contract,
2023 (“the GCC, 2023”), which reads as under:
“Clause 25: Settlement of Disputes by Conciliation and Arbitration
Except where otherwise provided in the contract, all questions and
disputes relating to the meaning of the specifications, designs,
drawings and instructions hereinbefore mentioned and as to the
quality of workmanship or materials used in the work or as to any
other question, claim, right, matter or thing whatsoever in any way
arising out of or relating to the contract, designs, drawings,
specifications, estimates, instructions, orders or otherwise concerning
the works or the execution or failure to execute the same whether
arising during the progress of the work or after the cancellation,
termination, completion or abandonment thereof shall be dealt with as
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mentioned hereinafter.
25.1 Conciliation: If the contractor considers any work demanded of
him to be outside the requirements of the contract, or disputes any
drawing, record or decision given in writing by the Engineer-in-
Charge; or if the Engineer-in-Charge considers any act or decision of
the contractor on any matter in connection with or arising out of the
contract or carrying out of the work to be unacceptable and disputed;
such party may promptly refer such disputes and amount claimed for
each dispute to the Conciliator (Special Director General or the
Additional Director General concerned with the work, as applicable)
in the proforma prescribed in Appendix XVII mentioned in Schedule
F, under intimation to the other party. The Conciliator may then
request each party to submit to him a brief written statement
describing the disputes and the points at issue. Each party shall send
a copy of such statement to the other party. At any stage of the
conciliation proceedings, the Conciliator may request a party to
submit to him such additional information as he deems appropriate.
When it appears to the Conciliator that there exist elements of a
settlement which may be acceptable to the parties, he shall formulate
the terms of a possible settlement and submit them to the parties for
their observations. After receiving the observations of the parties, he
may re-formulate the terms of a possible settlement in the light of such
observations. If the parties reach agreement on a settlement of the
disputes, they may draw up and sign a written settlement agreement
on non-judicial stamp paper as per Stamp Act. The Conciliator shall
authenticate the settlement agreement and furnish a copy thereof to
each party. The termination of conciliation proceedings shall be in
accordance with Section 76 of The Arbitration and Conciliation Act,
1996. No party shall be represented before the said Conciliator by an
advocate or legal counsel. The conciliation proceedings shall be
completed within 45 days from the receipt of reference. This time may
be enlarged by 15 days by the Conciliator. The conciliation
proceedings shall be deemed to have been terminated at the end of 60
days from the receipt of reference.
25.2 Arbitration: If the aforesaid conciliation proceedings fail or the
Conciliator fails to give proposal for settlement within the aforesaid
period, either party may promptly give notice in the proforma
prescribed in Appendix XVIII, under intimation to the other party, to
the Chief Engineer or the Superintending Engineer concerned with the
work (as applicable), hereinafter referred to as the Arbitrator
Appointing Authority as indicated in Schedule F, for appointment of
Arbitrator.
However, a party may seek appointment of Arbitrator without taking
recourse to the process of conciliation mentioned in sub-clause 25.1
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above.
In the event of either party giving a notice to the Arbitrator
Appointing Authority for appointment of Arbitrator, the said Authority
shall appoint Arbitrator as per the procedure given below and refer
such disputes to arbitration.
(a) Number of Arbitrators: If the contract amount is less than Rs.100
crore, the disputes may be referred for adjudication by a sole
Arbitrator. If the contract amount is Rs.100 crore or more, the
disputes may be referred to an Arbitral Tribunal of three Arbitrators.
(b) Qualification of Arbitrators: It is a term of this contract that each
member of the Arbitral Tribunal shall be Graduate Engineer with
experience in execution of public works engineering contracts, and he
should have worked earlier at a level not lower than the Chief
Engineer (equivalent to level of Joint Secretary to the Government of
India).
The aforesaid educational qualification and work experience shall be
mandatory for appointment as Arbitrator.
The age of Arbitrator at the time of appointment shall not exceed 75
years. An Arbitrator may be appointed notwithstanding the total
number of active arbitration cases with him.
(c) Parties to select Arbitrator: Based on the criteria specified above,
a list of empanelled Arbitrators has been prepared in CPWD, and the
parties shall have option to select an Arbitrator from the list sent to
them.
25.3 Appointment of Sole Arbitrator: The parties may opt for
appointment of the Arbitrator of the Ministry of Housing and Urban
Affairs. In such cases, the party seeking arbitration has to submit an
express agreement in writing as per Appendix XIX towards waiver of
Section 12(5) of the Arbitration and Conciliation Act, 1996 along with
the notice for appointment of Arbitrator in the proforma prescribed in
Appendix XVIII, under intimation to the other party. The Arbitrator
Appointing Authority shall, within 30 days of receipt of the said
notice, appoint Arbitrator of the Ministry of Housing and Urban
Affairs as Arbitrator in the matter, provided the other party also
submits waiver of Section 12(5), ibid in Appendix XIX within 7 days of
the receipt of the said notice.
Where any one of the parties does not opt for the Arbitrator of the
Ministry of Housing and Urban Affairs, or does not submit the waiver
agreement, the Arbitrator Appointing Authority shall propose five
Arbitrators from the list of CPWD Empanelled Arbitrators to the party
seeking arbitration under intimation to the other party within 15 days
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of receiving the notice. The party seeking arbitration shall give his
choice for one of them within 15 days of receiving the list, and the
Arbitrator Appointing Authority shall appoint the chosen person as
the Sole Arbitrator within 15 days of the receipt of choice.
It is a term of this arbitration agreement that if the parties fail to
select, within the period prescribed above, an Arbitrator of their
choice from the list of CPWD Empanelled Arbitrators forwarded to
them, the Arbitrator Appointing Authority shall himself select and
appoint Arbitrator from the said list.”
25.4 Appointment of Arbitral Tribunal of three Arbitrators: The
Arbitrator Appointing Authority shall prepare two separate lists of
five Arbitrators each from the list of CPWD Empanelled Arbitrators,
and send one to the party seeking arbitration and other to the
responding party, within 15 days of the receipt of notice. The parties
will then choose any one Arbitrator from the list provided to them
within 15 days of receipt of the list. The Arbitrator Appointing
Authority shall then appoint those chosen by the respective parties as
Arbitrators and also a third Arbitrator from the list of CPWD
Empanelled Arbitrators to act as presiding Arbitrator, within 15 days
of receipt of choice from both the parties.
It is a term of this arbitration agreement that if the parties fail to
select, within the period prescribed above, an Arbitrator of their
choice from the list of CPWD Empanelled Arbitrators forwarded to
them, the Arbitrator Appointing Authority shall himself select and
appoint Arbitrator from the said list.
25.5 Applicable Law: The provisions of the Arbitration and
Conciliation Act, 1996 (Act 26 of 1996) and any further statutory
modification or re-enactment thereof shall be applicable. Further, the
fast-track procedure for arbitration contained in Section 29B of the
said Act shall apply.
25.6 Fee payable to Arbitrator(s): The fee payable to the arbitral
tribunal shall be as per CPWD OM No.2/2006/SE(TLC)/CSQ/137
dated 19.11.2019 (or latest amendment), and shall be shared equally
by both the parties.
25.7 Place of Arbitration: The place of arbitration shall preferably be
as mentioned in Schedule F. However, the Arbitral Tribunal may
decide the place in consultation with both the parties.
25.8 Terms of reference: The Arbitral Tribunal shall adjudicate on
only such disputes as are referred to it by the Arbitrator Appointing
Authority and give separate award against each dispute referred to
him and shall give reason for the award in all cases where the total
amount of the claim by any party exceeds Rs.1,00,000.
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25.9 Interest on Arbitration award: It is also a term of this arbitration
agreement that where the Arbitral award against any dispute is for the
payment of money, no pre-suit and pendent elite interest shall be
payable on any part of the Arbitral award.”
7. Schedule ‘F’ of the agreement put forth by the petitioners designates
the Additional Director General (D), CPWD as the Conciliator; the
Superintending Engineer, DC-4, CPWD as the Arbitrator Appointing
Authority; and New Delhi as the Place/Seat of Arbitration. This Court is,
accordingly, possessed of the requisite jurisdiction to entertain the present
petition.
8. Notice in the present petition was issued on 14.08.2026 and was
accepted on behalf of the respondent. A reply has been filed on behalf of the
respondent, taking three objections: first, that the petitioner has relied upon
an incorrect and superseded version of the arbitration agreement; secondly,
that the petitioner failed to issue notice in the proforma prescribed in
Appendix XVIII, which alone sets the appointment machinery in motion,
rendering the invocation of Section 11(6) premature; and thirdly, that the
disputes sought to be referred are in the nature of deadwood.
9. The scope of enquiry at the referral stage stands settled by the Seven-
Judge Bench of the Supreme Court in In Re: Interplay Between Arbitration
Agreements under the Arbitration and Conciliation Act 1996 and the
Indian Stamp Act 1899 , (2024) 6 SCC 1, and by SBI General Insurance
Co. Ltd. v. Krish Spinning , 2 024 SCC Online SC 1754, in terms whereof
the referral court must, under Section 11(6A), confine itself to the
examination of the existence of an arbitration agreement. All other issues
fall to be decided by the arbitral tribunal under Section 16 of the A&C Act.
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10. The first objection is self-defeating. Both parties assert that the
agreement contains an arbitration clause. They differ only as to which
version of it governs. That difference does not touch the existence of an
arbitration agreement, which is all that falls for examination at this stage.
Under either version, moreover, the power of appointment is vested in an
officer of the respondent.
11. As regards the second objection, the record does not bear out the
assertion that no notice in the prescribed proforma was issued. Appendix
XVIII is titled “Notice for appointment of Arbitrator”, is addressed to the
Chief Engineer/Superintending Engineer, and calls for particulars of the
applicant, the work and contract number, the contract amount, the dates of
commencement and completion, and the number and amount of claims,
followed by a certification and a list of enclosures. The notice dated
29.05.2026 is titled “Notice for Appointment of Arbitrator”, is addressed to
the Superintending Engineer, DC-4, CPWD described as the “Arbitrator
Appointing Authority under Schedule ‘F’”, recites that it is issued “in terms
of Section 21 of the Arbitration and Conciliation Act, 1996 read with Clause
25 of the Agreement, particulars of which are given below”, sets out those
particulars, carries the certification that the information given is true,
encloses the list of claims with amounts, and was marked to the Executive
Engineer (E), DED-41, CPWD by way of intimation to the other party. The
notice thus substantially conforms to Appendix XVIII. That it reached the
Arbitrator Appointing Authority is not open to doubt, the notice bearing the
receipt stamp of that office dated 29.05.2026.
12. Even otherwise, the objection would not avail the respondent. The
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purpose of the stipulation as to proforma is to ensure that the appointing
authority is apprised of the particulars necessary to make an appointment;
that purpose having been served, a departure in form could not defeat a
substantive right to arbitrate. In any event, an objection founded upon non-
compliance with a pre-arbitral procedural requirement is not one for the
referral court to adjudicate upon. Nor can the respondent aver that the
appointment machinery was never set in motion, when, for the reasons laid
down below, that machinery could not lawfully have yielded a valid
appointment in any case.
13. The third objection is urged without indicating the basis upon which
the disputes are said to be deadwood. In any event, that is not a
characterisation for this Court to examine in terms of SBI General
Insurance Co. Ltd. v. Krish Spinning (supra), the same is a matter for the
learned Sole Arbitrator under Section 16 of the A&C Act.
14. The existence of the arbitration agreement is thus not in doubt. What
falls for consideration is the appointment machinery, and putting it to test it
on the respondent’s own version of Clause 25. Sub-clause 25.2 requires
notice for appointment of an arbitrator to be given “to the Chief Engineer or
the Superintending Engineer concerned with the work (as applicable),
hereinafter referred to as the Arbitrator Appointing Authority as indicated in
Schedule F” being, in terms of Schedule ‘F’, the Superintending Engineer,
DC-4, CPWD, an officer of the respondent. Sub-clause 25.3 thereafter
provides two routes. The first is the appointment of an Arbitrator of the
Ministry of Housing and Urban Affairs, which is available only where the
party seeking arbitration furnishes an express agreement in writing as per
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Appendix XIX waiving Section 12(5) of the A&C Act, and the other party
submits a like waiver within seven days. The second operates “where any
one of the parties does not opt for the Arbitrator of the Ministry of Housing
and Urban Affairs, or does not submit the waiver agreement”, and requires
the Arbitrator Appointing Authority to propose five names from the list of
CPWD Empanelled Arbitrators, failing selection from which “the Arbitrator
Appointing Authority shall himself select and appoint Arbitrator from the
said list”. No waiver under Appendix XIX has been furnished by either
party; the petitioner, on the contrary, objected in its notice dated 29.05.2026
to any unilateral appointment by an interested authority or from a
departmental panel. The consequence, on the respondent’s own clause, is
that the Sole Arbitrator falls to be appointed by an officer of the respondent,
and from a panel prepared by the respondent. As regards the former, the
Supreme Court in Perkins Eastman Architects DPC v. HSCC (India) Ltd. ,
(2020) 20 SCC 760, has observed:-
“ 21. But, in our view that has to be the logical deduction from TRF
Ltd. Para 50 of the decision shows that this Court was concerned with
the issue, "whether the Managing Director, after becoming ineligible
by operation of law, is he still eligible to nominate an arbitrator". The
ineligibility referred to therein, was as a result of operation of law, in
that a person having an interest in the dispute or in the outcome or
decision thereof, must not only be ineligible to act as an arbitrator but
must also not be eligible to appoint anyone else as an arbitrator and
that such person cannot and should not have any role in charting out
any course to the dispute resolution by having the power to appoint an
arbitrator. The next sentences in the paragraph, further show that
cases where both the parties could nominate respective arbitrators of
their choice were found to be completely a different situation. The
reason is clear that whatever advantage a party may derive by
nominating an arbitrator of its choice would get counter-balanced by
equal power with the other party. But, in a case where only one party
has a right to appoint a sole arbitrator, its choice will always have an
element of exclusivity in determining or charting the course for
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dispute resolution.
Naturally, the person who has an interest in the
outcome or decision of the dispute must not have the power to appoint
a sole arbitrator. That has to be taken as the essence of the
amendments brought in by the Arbitration and Conciliation
(Amendment) Act, 2015 (3 of 2016) and recognised by the decision of
this Court in TRF Ltd.”
15. As regards the latter, an appointment mechanism of this description is
impermissible in terms of the judgment of the Supreme Court in Central
Organisation for Railway Electrification v. ECI SPIC SMO MCML (JV) ,
(2025) 4 SCC 641. It has been observed therein as under:
“132. In Voestalpine and CORE, one of the parties curated a panel of
arbitrators and mandated the other party to select their arbitrator
from the panel. Since the curation of the list is exclusively undertaken
by one party, the other party is effectively excluded from the process
of curating the panel from which exclusively, the appointment of an
arbitrator is to be made. The other party has to mandatorily select its
arbitrator from a curated panel, restricting their freedom to appoint
an arbitrator of their choice. This is against the principle of equal
treatment contained under Section 18. In this situation, there is no
effective counterbalance because both parties do not participate
equally in the process of appointing arbitrators. The party curating
the panel can restrict the choice of the party only to a person who is
on the panel selected by the other party and to no other person.
133. Many PSUs are regularly involved in arbitration disputes and
constantly need the services of arbitrators. Such institutions often
maintain a pool of potential arbitrators with the sole object of having
a ready pool of qualified professionals who have committed their time
and consented to act as arbitrators for fixed fees. The Arbitration Act
does not prohibit parties to an arbitration agreement from
maintaining a curated panel of potential arbitrators. However, the
problem arises when the PSUs make it mandatory for other parties to
select their nominees from the curated panel of arbitrators. When a
PSU exercises its discretion to curate a panel, the very factor that the
PSU is choosing only a certain number of persons as potential
arbitrators and not others will raise a reasonable doubt in the mind of
a fair-minded person. The PSUs may conceivably have nominated a
person on the panel of potential arbitrators because they have a
certain predisposition in favour of the former. This doubt is reinforced
when the other party is given no choice but to select its arbitrator
from the curated panel.”
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16. Recently, a Coordinate Bench of this Court in Kalpataru Projects
International Ltd. v. Northern Railway , 2026 SCC OnLine Del 110, while
relying upon the aforesaid judgment of the Supreme Court, has, in a similar
factual conspectus, appointed a sole arbitrator, while, inter alia, observing as
under:
“12. The position of law is, thus, clear that even in cases, where there
is a three member panel, an Arbitration Clause mandating the other
party to select its Arbitrator from a curated panel of potential
Arbitrators, is against the Principle of Equal Treatment of Parties.
Accordingly, it is evident that the Arbitration Clause detailing the
procedure for appointment of the Arbitral Tribunal, i.e., Clause 24.1
in the present case cannot be sustained, and would be invalid.”
17. Applying the aforesaid principles to the present case, the Arbitrator
Appointing Authority under sub-clause 25.2 read with Schedule ‘F’ is an
officer of the respondent, and falls within Entry 1 of the Seventh Schedule
read with Section 12(5) of the A&C Act. He is therefore ineligible to act as
an arbitrator and, in terms of Perkins Eastman Architects DPC (supra),
equally ineligible to appoint one. That the power of appointment was
understood by the respondent to be its own is evident from its reply, which
avers that “no arbitrator was appointed by the Respondent”.
18. In the other option, the choice of the petitioner stands confined to a
list of “CPWD Empanelled Arbitrators” prepared by the respondent, with
the Arbitrator Appointing Authority empowered to select and appoint from
that list himself should the petitioner not exercise its option. That is not
permissible as per Central Organisation for Railway Electrification (supra)
and Kalpataru Projects International Ltd. (supra) . The appointment
mechanism contained in Clause 25 cannot, therefore, be sustained, and it is
incumbent on this Court to appoint an independent Sole Arbitrator.
ARB. P. 1399/2026 Page 14 of 15
Signature Not Verified
Digitally Signed
By:ABHISHEK THAKUR
Signing Date:16.10.2026
22:18:48
19. Accordingly, Ms. Ritika Jhurani, Advocate (Mob. No. +91
9910699943) is appointed as the Sole Arbitrator to adjudicate the disputes
between the parties.
20. The learned Sole Arbitrator may proceed with the arbitration
proceedings subject to furnishing to the parties requisite disclosures as
required under Section 12 of the A&C Act, and in the event there is any
impediment to the appointment on that count, the parties are given liberty to
file an appropriate application in this Court.
21. Let the arbitration take place under the aegis of and as per the rules of
the Delhi International Arbitration Centre (DIAC). The learned Sole
Arbitrator shall be entitled to fee in accordance with the applicable
rules/schedule of the DIAC; or as may otherwise be agreed to between the
parties and the learned Sole Arbitrator.
22. The respondent shall be entitled to raise preliminary objections as
regards jurisdiction/arbitrability, which shall be decided by the learned Sole
Arbitrator, in accordance with law.
23. All rights and contentions of the parties in relation to the
claims/counter-claims are kept open, to be decided by the learned Arbitrator
on merits, in accordance with law.
24. Needless to say, nothing in this order shall be construed as an
expression of opinion of this Court on the merits of the contentions of the
parties.
25. The present petition, along with the pending applications, stands
disposed of in the above terms.
SACHIN DATTA, J
nb
OCTOBER 16, 2026/
ARB. P. 1399/2026 Page 15 of 15
Signature Not Verified
Digitally Signed
By:ABHISHEK THAKUR
Signing Date:16.10.2026
22:18:48