Unilateral appointment of an arbitrator is void ab initio, rendering the resulting award a nullity.

The parties entered into a Concession Agreement (CA) on September 24, 2018, for the development and management of F&B outlets at Goa Airport

Article 22 of the CA provided for dispute resolution, specifying that disputes with financial implications exceeding Rs. 7,00,000 would be referred to a sole arbitrator appointed by the "tender approving authority" of the Petitioner (AAI)

Following a dispute regarding electricity supply, the Respondent invoked arbitration on November 21, 2019

Consequently, the Petitioner unilaterally appointed a former Director General of the CPWD as the sole arbitrator

After the arbitral proceedings culminated in an award dated September 26, 2022, the Petitioner challenged the award under Section 34 of the Arbitration and Conciliation Act, 1996, alleging that the arbitrator's appointment was legally infirm

1. Whether the unilateral appointment of a sole arbitrator by one party is in violation of Section 12(5) of the Arbitration and Conciliation Act, 1996

2. Whether the Petitioner, having itself appointed the arbitrator and participated in the proceedings, is precluded from challenging the award on the ground of the arbitrator's ineligibility

3. Whether participation in arbitral proceedings and the filing of pleadings constitute an "express agreement in writing" to waive the ineligibility under the proviso to Section 12(5)

The court primarily applied Section 12(5) of the Arbitration and Conciliation Act, 1996, which mandates that any person whose relationship with the parties or the dispute falls within the Seventh Schedule is ineligible to be an arbitrator

It emphasized the proviso to Section 12(5), which requires an "express agreement in writing" to waive such ineligibility after the dispute has arisen

The court relied on the Supreme Court’s decision in Bhadra International (India) Pvt. Ltd. & Ors. v. Airports Authority of India (2026), establishing that the principle of equal treatment under Section 18 extends to the appointment process and that unilateral appointments are ex-facie invalid

It further cited the Division Bench ruling in Mahavir Prasad Gupta and Sons v. Govt. of NCT of Delhi (2025), which held that an award by a unilaterally appointed arbitrator is a nullity and can be challenged even by the party that made the appointment

The court observed that under Article 22.2.1 of the CA, the Petitioner possessed the exclusive power to appoint the sole arbitrator, a procedure that inherently violates the requirement of equal treatment in the constitution of an arbitral tribunal

Applying the Bhadra International precedent, the court reasoned that since the ineligibility under Section 12(5) stems from the operation of law, any appointment made unilaterally is void ab-initio

The court rejected the Respondent’s contention that the Petitioner’s conduct—appointing the arbitrator and participating in the merits—constituted a waiver.

It clarified that "waiver" under the proviso to Section 12(5) cannot be inferred through conduct or implication; it necessitates a "clear, unequivocal written agreement" executed after the dispute arose

Finally, the court held that because the ineligibility goes to the root of the tribunal's jurisdiction, the resulting award is a nullity and the right to object is not lost by participation in the proceedings

Consequently, the impugned award dated September 26, 2022, was declared a nullity

The court allowed the petition under Section 34, set aside the award, and disposed of the pending execution petition as infructuous