Delhi HC Sets Aside Contractor’s Award Against GNCTD: PWD Could Not Unilaterally Appoint Its Retired Chief Without Post-Dispute Written Waiver

GNCTD’s PWD appointed a retired Principal Chief Engineer of PWD as sole arbitrator under the parties’ contract. The contractor’s claims were partly allowed in an award dated 20 January 2025; GNCTD’s counterclaim was not addressed.

GNCTD’s Section 34 challenge was dismissed. Although its Section 34 petition did not plead the arbitrator’s ineligibility, GNCTD raised the unilateral-appointment objection in written submissions before the District Judge, who rejected it on the grounds of concurrence and participation.

GNCTD appealed under Section 37, contending that the appointment was invalid under Section 12(5) read with the Seventh Schedule.

Section 12(5) of the Arbitration and Conciliation Act, 1996, read with the Seventh Schedule, renders a person falling within a specified category ineligible to be appointed as an arbitrator, notwithstanding a prior agreement to the contrary; the proviso permits waiver only by an express agreement in writing made after the disputes have arisen.

Such waiver cannot be inferred from conduct, participation, or the appointment itself. The Court relied on Bharat Broadband Network Ltd. v. United Telecoms Ltd., (2019) 5 SCC 755, and Bhadra International (India) Pvt. Ltd. v. Airports Authority of India for the statutory requirement of an express written waiver; it also relied on Titagarh Rail Systems and Mahavir Prasad Gupta and Sons v. Govt. of NCT of Delhi, 2025 SCC OnLine Del 4241, on the insufficiency of following a contractual appointment procedure to establish waiver.

The appeal was considered under Section 37, following the dismissal of GNCTD’s Section 34 petition.

The arbitrator was a retired Principal Chief Engineer of PWD and had been appointed by PWD under the contractual clause; however, the record contained no express written agreement, made after the disputes arose, waiving Section 12(5).

Applying the statutory waiver requirement and the cited authorities, the Court held that neither GNCTD’s appointment of the arbitrator nor its participation, filing of a defence and counterclaim, or failure to object earlier could substitute for that agreement.

The objection had also been raised in written submissions before the Section 34 court, but that court had incorrectly rejected it on the basis of participation.

The Court therefore found the appointment invalid and did not address GNCTD’s remaining challenges to the award.

It allowed the appeal and set aside both the District Judge’s order dated 8 May 2026 and the arbitral award dated 20 January 2025; there was no order as to costs.