Unilateral appointment of an arbitrator without express written waiver is void ab initio and challengeable by the appointing party.

The Appellant was awarded a construction contract by the Respondent (EPIL) in 2008.

Clause 76 of the General Conditions of Contract (GCC) empowered the Respondent’s Chairman and Managing Director (CMD) to unilaterally appoint a sole arbitrator.

Following a dispute, the Appellant filed a Section 11 petition, which was withdrawn after the Respondent unilaterally appointed an arbitrator on 10.01.2017.

An award was passed in favor of the Appellant on 06.07.2018.

The Respondent challenged the award under Section 34 of the Arbitration and Conciliation Act, 1996, later amending the petition to include a challenge under Section 12(5) regarding the invalidity of the unilateral appointment.

The Single Judge set aside the award, leading to this Section 37 appeal.

1. Whether an arbitral award is sustainable if passed by an arbitrator appointed unilaterally without an express written waiver under Section 12(5) of the Act.

2. Whether the party that itself made the unilateral appointment (Respondent) is barred by mala fides or acquiescence from challenging the award on the ground of such appointment being void ab initio.

Section 12(5) of the Arbitration and Conciliation Act, 1996, along with the Seventh Schedule, which renders certain persons (including employees or those nominated unilaterally by a party) de jure ineligible to act as arbitrators.

The Supreme Court precedent in Bhadra International (India) Pvt Ltd v. Airports Authority of India (2026), establishing that unilateral appointments are void ab initio unless saved by an express written agreement under the proviso to Section 12(5).

Principle from Mahavir Prasad Gupta & Sons v. GNCTD (2025) and Bharat Broadband Network Ltd v. United Telecoms Ltd (2019), which holds that even the appointing party can challenge a unilateral appointment as it goes to the core of the tribunal’s jurisdiction.

The Court rejected the Appellant’s argument that the Respondent’s conduct—unilaterally appointing the arbitrator and later challenging the award when it lost—constituted mala fides or implicit consent.

The Court reasoned that Section 12(5) creates a non-derogable legal position: any appointment made in violation of the Seventh Schedule lacks inherent jurisdiction and is void from the outset.

The Court emphasized that "implicit consent" or participation in proceedings cannot substitute for the mandatory "express agreement in writing" required by the proviso to Section 12(5).

Following Mahavir Prasad Gupta, the Court held that the fact that the Respondent itself made the appointment is irrelevant because the resulting award is a nullity in the eyes of the law.

The Court dismissed the appeal and upheld the Single Judge’s order setting aside the award, as the Arbitral Tribunal lacked jurisdiction and the award was unenforceable regardless of which party raised the objection or when it was raised.