Unilateral appointment of an arbitrator without express written consent renders the award a nullity despite participation.

The Petitioners challenged arbitral awards dated February 6, 2018, passed by a sole arbitrator unilaterally appointed by the Respondent, Karvy Financial Services Ltd.

The underlying dispute involved a loan agreement dated March 31, 2011, with arbitration invoked on November 30, 2016.

Although the appointment was unilateral, the Petitioners participated in the arbitral proceedings without protest and only raised the objection of "unilateral appointment" during the Section 34 challenge.

1. Whether the unilateral appointment of an arbitrator renders the resulting arbitral awards liable to be set aside under Section 34 of the Act.

2. Whether uncontested participation in arbitration proceedings constitutes a waiver of the right to challenge an award on the ground of an ineligible unilateral appointment.

3. Whether an express agreement in writing is mandatory to waive the ineligibility prescribed under Section 12(5) of the Act.

The Court primarily applied Section 12(5) of the Arbitration and Conciliation Act, 1996, which renders any person falling under the Seventh Schedule categories de jure ineligible to be an arbitrator unless waived by an "express agreement in writing".

It relied on the Supreme Court’s definitive ruling in Bhadra International (India) Pvt. Ltd. v. Airports Authority of India (2026), which established that unilateral appointment equates to inherent ineligibility.

The Court further incorporated principles from Perkins Eastman Architects DPC v. HSCC (India) Ltd. and Bharat Broadband Network Ltd. v. United Telecoms Ltd., affirming that the "equal treatment" principle under Section 18 requires both parties to have an equal say in the constitution of the tribunal.

The Court noted that under the Bhadra International precedent, the "express agreement in writing" required by the proviso to Section 12(5) must be a deliberate, informed act occurring after the dispute has arisen.

The Court rejected the Respondent’s argument that the Petitioners' participation constituted an implied waiver, holding that Section 12(5) necessitates a "heightened and mandatory requirement" that cannot be satisfied by mere procedural participation or "deemed waiver" under Section 4.

The Court reasoned that because a unilaterally appointed arbitrator lacks inherent jurisdiction, the mandate is automatically terminated under Section 14, and the resulting award is a nullity.

The Court emphasized that the "proceedings are rendered futile" if the appointing party fails to secure a specific written consent from the counterparty to bypass the restriction of unilateral appointment.

The Court held that since there was no express written agreement waiving the ineligibility of the arbitrator, the awards were passed by a tribunal lacking jurisdiction.

Consequently, the High Court allowed all five Arbitration Petitions and set aside the impugned Arbitral Awards.