A party interested in the dispute cannot unilaterally appoint the sole arbitrator.

The petitioner sought appointment of an arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996, in relation to disputes arising from two separate construction contracts with the respondent.

In each matter, the respondent’s Chief Engineer had appointed a sole arbitrator under Clause 25 of the General Conditions of Contract (GCC); awards were made, but the Delhi High Court set them aside on 29 April 2026 because the appointments were unilateral.

The petitioner then issued fresh notices invoking arbitration under Clause 25(ii) and filed these petitions.

The respondent did not dispute that appointment by the designated officers under Clause 25 would be unilateral and legally impermissible.

1. Whether Clause 25 of the GCC, insofar as it authorised the respondent’s designated officers to appoint the sole arbitrator, was enforceable.

2. Whether the Court should appoint an independent arbitrator under Section 11 of the 1996 Act to decide the disputes under the two contracts.

Section 11 of the 1996 Act empowers the Court to appoint an arbitrator where the agreed appointment procedure cannot lawfully be followed; Section 12(5) addresses the ineligibility of persons whose relationship with a party gives rise to justifiable doubts about their independence or impartiality.

Under TRF Ltd. v. Energo Engineering Projects Ltd., an ineligible person cannot appoint another arbitrator; under Perkins Eastman Architects DPC v. HSCC (India) Ltd., a party interested in the outcome of a dispute cannot unilaterally appoint the sole arbitrator, including through an appointee of its choice.

The Court also relied on Bharat Broadband Network Ltd. v. United Telecoms Ltd., Proddatur Cable TV Digi Services v. Siti Cable Network Ltd., CORE v. ECI SPIC SMO MCML (JV), and the Supreme Court’s decision in Hindustan Construction Company Ltd. v. Bihar Rajya Pul Nirman Nigam Ltd.; the latter supports severing an invalid unilateral appointment mechanism while preserving the parties’ agreement to arbitrate.

The Court followed its decision in Mahavir Prasad Gupta and Sons v. Government of NCT of Delhi, which addressed the same Clause 25.

Clause 25 empowered officers of the respondent to appoint the sole arbitrator.

Applying Perkins and the related authorities, the Court held that an appointing authority connected to a party interested in the dispute cannot control the appointment, because this creates a possibility of bias and undermines equal treatment and procedural equality.

Following Mahavir Prasad Gupta, the Court held that the appointment power was void and unenforceable, but that this did not invalidate the parties’ substantive agreement to arbitrate.

Given the parties’ agreement that the disputes required technical expertise, the Court appointed a sole arbitrator with the relevant technical qualifications.

It appointed Mr. Rakesh Kumar Agrawal, SDG, CPWD, as sole arbitrator for both matters, directing that they proceed as separate references under the aegis of the Delhi International Arbitration Centre, with fees under the applicable DIAC rules.

The arbitrator was directed to make the disclosure required by Section 12 of the 1996 Act.

The petitions were disposed of, with all merits and other contentions left open.