Unilateral Appointment of Arbitrator by a Party Official is Void Ab Initio Absent Express Written Waiver

The parties entered into a Mould Agreement (MA) on June 1, 2009, and subsequent Purchase and Sale Agreements

Clause 18 of the MA authorized the Vice President of the respondent (Samsung) to unilaterally appoint a sole arbitrator

Following disputes regarding the return of moulds, the respondent's Vice President appointed an arbitrator on April 25, 2017

During Section 9 proceedings, the High Court noted the appointment, and parties agreed to pursue interim relief under Section 17 before said arbitrator "without prejudice to their rights"

The arbitrator passed an award on November 17, 2018. The petitioner challenged this award under Section 34 of the Arbitration and Conciliation Act, 1996, alleging the appointment violated Section 12(5)

1. Whether the unilateral appointment of an arbitrator by the Vice President of a party is in violation of Section 12(5) of the Act and renders the award a nullity

2. Whether the petitioner waived the right to object to the arbitrator’s ineligibility by participating in the proceedings without raising an initial objection

3. Whether an objection to the inherent lack of jurisdiction of an ineligible arbitrator can be raised for the first time in a Section 34 petition

Section 12(5) read with the Seventh Schedule of the Arbitration and Conciliation Act, 1996, which renders any person having a relationship with the parties or the dispute as specified therein ineligible to be an arbitrator

The court relied on the Supreme Court precedent in Bhadra International (India) Pvt. Ltd. & Ors. v. Airports Authority of India (2026), which held that unilateral appointments are ex facie invalid and that waiver under the proviso to Section 12(5) requires an "express agreement in writing" rather than mere conduct or implication

The court also applied principles from the Division Bench in Mahavir Prasad Gupta and Sons v. Govt. of NCT of Delhi (2025), establishing that awards by ineligible arbitrators are a nullity and against public policy

The court determined that under the amended Section 12(5), an employee of a party cannot act as an arbitrator nor nominate one unilaterally

The Vice President of the respondent, being an officer of a party to the dispute, was legally disqualified from making the appointment

Regarding the respondent's claim of waiver, the court observed that the petitioner’s participation in the proceedings and the High Court’s order dated July 20, 2017, did not constitute "express consent in writing" as mandated by the statute

Following Bhadra International, the court reasoned that the right to equal treatment in the constitution of the tribunal is non-negotiable unless waived by a conscious, unequivocal written manifestation after the dispute has arisen

Since no such written agreement existed from both parties, the arbitrator lacked inherent jurisdiction from the outset

The court clarified that the objection to the arbitrator's ineligibility could be raised for the first time under Section 34 because the lack of jurisdiction goes to the root of the matter. Consequently, the petition was allowed, and the arbitral award dated November 17, 2018, was set aside