Unilaterally appointed arbitral awards are non-executable nullities despite absence of Section 34 challenge.

The Decree Holder (Gowra Petrochem) sought to execute an arbitral award dated 20.05.2019 against the Judgment Debtors (Alfa Chem & Ors.) under Section 36 of the Arbitration and Conciliation Act, 1996

The Judgment Debtors objected to the execution on the grounds that the Sole Arbitrator was appointed unilaterally

The Decree Holder conceded the unilateral appointment and the absence of an express waiver in writing under Section 12(5) of the Act

However, the Decree Holder argued that the award was final and binding because the Judgment Debtors had failed to challenge it under Section 34 of the Act within the limitation period

1. Whether an execution petition is maintainable for an arbitral award arising from a unilateral appointment of an arbitrator when no challenge was filed under Section 34 of the Act.

2. Whether an Executing Court, under Section 36 of the Act read with Section 47 of the CPC, can refuse enforcement of an award on the grounds of inherent lack of jurisdiction/nullity.

Section 12(5) of the Arbitration and Conciliation Act, 1996, which prohibits unilateral appointments of arbitrators unless there is an express agreement in writing after the dispute arises

The Division Bench ruling in Mahavir Prasad Gupta and Sons v. Govt. of NCT of Delhi, which held that awards by unilaterally appointed arbitrators are nullities and can be challenged even at the execution stage

Principles from the Supreme Court in Electrosteel Steel Ltd. v. Ispat Carrier (P) Ltd., which clarified that under Section 47 of the CPC, an executing court can entertain objections regarding the patent nullity or inherent lack of jurisdiction of an award, even if it was not challenged under Section 34

The Court rejected the Decree Holder's argument that the lapse of the Section 34 challenge period cured the jurisdictional defect of the award

Applying the Mahavir Prasad Gupta precedent, the Court reasoned that a unilateral appointment constitutes an incurable jurisdictional defect that renders the proceedings void ab initio

The Court observed that Section 36 of the Act treats an award as a decree of the court for enforcement purposes, thereby invoking Section 47 of the CPC, which empowers an executing court to refuse enforcement of a "dead" or non-existent decree

Since the Decree Holder admitted to the unilateral appointment and the lack of a written waiver under the Section 12(5) proviso, the Court found the award to be a patent nullity that cannot be sanctified by mere passage of time

It held that the Impugned Arbitral Award is non est and incapable of enforcement due to a defect that goes to the root of the jurisdiction

Consequently, the Execution Petition was dismissed as being incapable of enforcement