Unilateral arbitrator appointment without express written waiver void; Delhi HC sets aside ₹2.68-crore award

The Public Works Department awarded BL Infra Projects Pvt. Ltd. a contract for constructing additional SPS classrooms at GBSS Kalan and GSKV Tikri Kalan. The stipulated completion period was 135 days, from 16 March 2016 to 28 July 2016; the work was completed approximately 472 days late, leading to disputes concerning execution of the work and payment of bills.

The contract’s Clause 25 provided for appointment of a sole arbitrator by the Chief Engineer, CPWD, and excluded any role for the contractor in the appointment process.

The Chief Engineer appointed the arbitrator, who passed an award dated 14 January 2022, corrected on 9 February 2022, awarding the contractor various amounts, including claims towards unpaid work, escalation, bonus, overheads, and costs.

In the Section 34 petition, the Public Works Department pressed the sole ground that the arbitrator had been unilaterally appointed by it and was ineligible under Section 12(5) read with the Seventh Schedule of the Arbitration and Conciliation Act, 1996 (“A Act”).

Whether an arbitrator appointed unilaterally by one party under a contractual clause is ineligible under Section 12(5) read with the Seventh Schedule of the A Act, absent an express written waiver by the parties after the disputes arose.

Whether participation in the arbitral proceedings, or a statement in the award recording the parties’ consent, constitutes an “express agreement in writing” waiving the applicability of Section 12(5).

Whether the party that itself made the unilateral appointment may challenge the resulting award under Section 34 on the ground that the tribunal lacked jurisdiction.

Section 12(5) of the A Act, read with the Seventh Schedule, renders a person falling within the specified disqualifying relationships ineligible to be appointed as an arbitrator, unless the parties expressly agree in writing, after the disputes have arisen, to waive the applicability of that provision.

Such waiver must be clear, unequivocal, conscious, and expressed in words; it cannot be inferred from conduct, participation, filing of pleadings, or procedural acquiescence. The Court relied on Bhadra International (India) (P) Ltd. v. Airports Authority of India, 2026 SCC OnLine SC 7, and Bharat Broadband Network Ltd. v. United Telecoms Ltd., which held that waiver under the proviso to Section 12(5) cannot be implied by conduct.

It also applied Mahavir Prasad Gupta Sons v. State (NCT of Delhi), 2025 SCC OnLine Del 4241, holding that unilateral appointment is void ab initio, that the appointing party is not deemed to have waived its objection merely by making the appointment, and that an award rendered by such a tribunal may be challenged under Section 34.

An award rendered by an ineligible tribunal is a nullity and may be set aside under Section 34(2)(b)(ii) as being contrary to the public policy of India.

Clause 25 vested the exclusive power to appoint the sole arbitrator in the Chief Engineer, CPWD, an official connected with the petitioner and its contractual administration; the respondent had no corresponding or equal say in the tribunal’s constitution.

The Court treated this unilateral appointment mechanism as inconsistent with the requirement of an impartial and independently constituted tribunal under Section 12(5) and the Seventh Schedule.

Although the respondent relied on paragraph 2 of the award and its participation in the proceedings as evidence of waiver, the Court held that neither could satisfy the statutory requirement of an express written agreement made after the disputes arose.

Applying Bhadra International and Mahavir Prasad, the Court further held that even the petitioner, despite having appointed the arbitrator, was entitled to raise the jurisdictional objection at the Section 34 stage; the act of appointment itself did not amount to a valid waiver.

Since no express post-dispute written waiver existed, the arbitrator’s appointment was void ab initio and the award was consequently rendered without jurisdiction.

No valid express written waiver had been established, and participation in the arbitration or the contents of the award could not cure the defect.

The arbitrator’s appointment was therefore void ab initio, rendering the award dated 14 January 2022, as corrected on 9 February 2022, a nullity.

The award was set aside under Section 34, and the petition was disposed of accordingly.