Delhi HC Sets Aside TCIL Award, Holds Even Appointing Party Can Challenge A Section 12(5)-Ineligible Arbitrator On Appeal

In brief

The question

1. Whether the appointment of the sole arbitrator by TCIL violated Section 12(5) read with the Seventh Schedule of the Act, absent an express written waiver by the parties after the disputes arose.

The court held

The Court held that the sole arbitrator’s appointment violated Section 12(5) read with the Seventh Schedule and was void ab initio.

It also directed

The objection was maintainable at the Section 37 appeal stage.

The appeal was allowed, and both the arbitral award and the Single Judge’s judgment were set aside; pending applications were disposed of.

01Facts

TCIL and Vista entered into an agreement dated 2 May 2012 containing an arbitration clause providing for appointment of a sole arbitrator by TCIL’s CMD, with appointment by ICADR if the parties failed to agree.

¶ 2.1, 4

After Vista invoked arbitration, TCIL appointed the sole arbitrator on 19 December 2018; the arbitrator issued an award on 1 July 2019.

¶ 2.2

TCIL’s Section 34 challenge to the award was dismissed by a Single Judge. In its Section 37 appeal, TCIL argued that the appointment violated Section 12(5) of the Arbitration and Conciliation Act, 1996. The objection had not been raised before the arbitral tribunal or the Single Judge.

¶ 2.3, 3.1, 4.1

02Issues

i.1. Whether the appointment of the sole arbitrator by TCIL violated Section 12(5) read with the Seventh Schedule of the Act, absent an express written waiver by the parties after the disputes arose.

¶ 7–12

ii.2. Whether the objection to the arbitrator’s ineligibility could be raised for the first time in an appeal under Section 37.

¶ 4.1, 6.1, 13

03Law Applied

Section 12(5) read with the Seventh Schedule renders a person falling within the specified categories ineligible to act as an arbitrator, and the proviso permits waiver only through an express agreement in writing made after disputes have arisen.

¶ 6.1

Such waiver cannot be inferred from a party’s conduct, participation in proceedings, or failure to object.

¶ 9–11

Bhadra International (India) Pvt. Ltd. v. Airports Authority of India, 2026 INSC 6, establishes that appointment by an ineligible person is invalid and an objection to inherent lack of jurisdiction may be raised at any stage.

¶ 6.1

Mahavir Prasad Gupta and Sons v. Government of NCT of Delhi, 2025 SCC OnLine Del 4241, holds that a party’s own unilateral appointment does not amount to waiver and that an award by an ineligible arbitrator may be challenged under Section 34.

¶ 6.2

Sections 34 and 37 provide the respective routes for challenging an arbitral award and appealing the decision on that challenge.

¶ 1, 2.3

Provisions in the judgment · 10 · Linked ones open on LawLens

Arbitration and Conciliation Act, 1996 10 provisions

Section 4 Section 12 Section 14 Section 15 Section 18 Section 21 Section 34 Section 36 Section 37 Section 7

04Reasoning

TCIL appointed the arbitrator, and the Court treated that appointment as unilateral and contrary to Section 12(5) read with the Seventh Schedule.

¶ 13

Vista’s request that TCIL appoint an arbitrator, its failure to object to the proposed appointment, and its participation in arbitration did not constitute an express written waiver after the disputes arose.

¶ 9–11

Nor did TCIL’s own act of appointment amount to such a waiver; the Court held that an ineligible appointment could not be validated by the appointing party’s conduct.

¶ 12

Because the objection concerned the tribunal’s inherent jurisdiction, it could be raised for the first time in the Section 37 appeal.

¶ 13