Unilateral Appointment of Arbitrator Is Void Ab Initio Absent Express Written Waiver Under Section 12(5).

The Petitioner (AAI) awarded a contract for the construction of a New Integrated Passenger Terminal Building at Birsa Munda Airport, Ranchi, to the Respondent on 21.01.2009

Disputes arose regarding delays and liquidated damages

On 16.04.2019, the Respondent invoked arbitration under Clause 57 of the GCC, which allowed AAI to appoint a sole arbitrator

AAI appointed the arbitrator on 13.05.2019, and the proceedings resulted in an award dated 10.08.2023 in favor of the Respondent

AAI subsequently challenged the award under Section 34 of the Arbitration and Conciliation Act, 1996 ("the Act"), contending that the unilateral appointment of the arbitrator was void ab-initio despite AAI being the appointing party

1. Whether the unilateral appointment of a sole arbitrator by one party is valid under Section 12(5) of the Act

2. Whether a party that unilaterally appointed the arbitrator is precluded from challenging the appointment under Section 34 after the award is passed

3. Whether participation in arbitral proceedings or the act of appointment constitutes a "deemed waiver" of the ineligibility under the proviso to Section 12(5)

The court primarily applied Section 12(5) read with the Seventh Schedule of the Arbitration and Conciliation Act, 1996, which renders any person whose relationship with the parties falls under the specified categories ineligible to be appointed as an arbitrator

The court relied on the Supreme Court’s decision in Bhadra International (India) Pvt. Ltd. v. AAI (2026), which established that unilateral appointments are ex-facie invalid and that a waiver under the proviso to Section 12(5) requires an "express agreement in writing"

It further applied the Division Bench ruling in Mahavir Prasad Gupta and Sons v. Govt. of NCT of Delhi (2025), holding that awards by unilaterally appointed arbitrators are a nullity and the lack of inherent jurisdiction can be raised at any stage, including Section 34 proceedings

The court reasoned that since the arbitrator was appointed unilaterally by AAI pursuant to Clause 57(c) of the GCC without a subsequent express written agreement between the parties to waive the ineligibility, the appointment violated the mandatory provisions of Section 12(5)

The court rejected the Respondent's argument that AAI’s participation or the fact that AAI itself made the appointment constituted a waiver, noting that the statute requires a "conscious decision to abandon an existing legal right" manifested through an "express and written" intention

Citing Bhadra International, the court emphasized that equal treatment of parties in the appointment process is a fundamental principle, and any breach results in an inherent lack of jurisdiction

Consequently, the arbitral mandate was void from its inception, and the resulting award was non-est in the eyes of the law

The petition was allowed, and the arbitral award dated 10.08.2023 was set aside as a nullity