Unilateral arbitrator appointment without express written waiver is void ab initio, rendering the resulting award a nullity.

The parties entered into a Memorandum of Understanding on February 5, 2007, followed by an agreement on July 16, 2007, for hiring wagons for container train services.

Article 6.1 of the agreement provided for dispute resolution through arbitration.

Following a dispute, the Petitioner issued a notice on July 25, 2016, calling upon the Respondent to appoint an arbitrator.

On August 5, 2016, the Managing Director (MD) of the Respondent unilaterally appointed a sole arbitrator.

The proceedings resulted in an arbitral award dated January 16, 2018.

The Petitioner challenged the award under Section 34 of the Arbitration and Conciliation Act, 1996 ("the Act"), alleging that the unilateral appointment was void ab initio.

1. Whether the unilateral appointment of the sole arbitrator by the Respondent’s Managing Director is void ab initio under Section 12(5) of the Act.

2. Whether the Petitioner’s conduct, including the issuance of a notice requesting appointment and subsequent participation in proceedings, constitutes an "express agreement in writing" to waive the ineligibility under the proviso to Section 12(5).

The court applied Section 12(5) read with the Seventh Schedule of the Arbitration and Conciliation Act, 1996, which renders certain individuals ineligible to act as arbitrators or nominate others due to their relationship with the parties.

The court relied on the Supreme Court’s decision in Bhadra International (India) Pvt. Ltd. & Ors. v. Airports Authority of India (2026), which established that unilateral appointments are ex facie invalid and that any waiver of Section 12(5) must be through an "express agreement in writing" rather than by conduct or implication.

The court also cited Mahavir Prasad Gupta and Sons v. Govt. of NCT of Delhi (2025), affirming that an award passed by an ineligible arbitrator is a nullity and can be challenged at any stage, including under Section 34.

The court reasoned that under Section 12(5) of the Act, the MD of the Respondent was legally ineligible to nominate or appoint a sole arbitrator unilaterally.

Although the Respondent argued that the appointment was made at the Petitioner's instance via the notice dated July 25, 2016, the court held that such a request does not satisfy the statutory requirement for an "express agreement in writing" to waive ineligibility.

The court emphasized that waiver must be a conscious, unequivocal written manifestation by both parties subsequent to the dispute arising.

Furthermore, participation in the arbitral proceedings or filing claim statements does not constitute a deemed waiver under Section 4, as Section 12(5) acts as an exception requiring higher formal compliance.

Consequently, the lack of inherent jurisdiction of the unilaterally appointed arbitrator rendered the entire proceedings invalid.

Accordingly, the arbitral award dated January 16, 2018, is a nullity.

The court allowed the petition and set aside the impugned award.