The Bombay High Court has definitively affirmed that unilateral appointment of an arbitrator renders the entire arbitral proceeding void ab initio, aligning with the Supreme Court’s ruling in Bhadra International (India) Pvt. Ltd. v. Airports Authority of India. This judgment invalidates all awards arising from such appointments and provides clear procedural relief to affected parties.
Background & Facts
The Dispute
These consolidated matters involve commercial disputes resolved through arbitration under the Arbitration and Conciliation Act, 1996. In each case, a sole arbitrator was appointed by one party without the consent or participation of the other, in breach of the statutory requirement for impartiality and independence under Section 12(5) of the Act.
Key Facts
- The disputes arose from commercial contracts across infrastructure, construction, and services sectors
- Each contract contained an arbitration clause providing for a sole arbitrator
- In every instance, the arbitrator was nominated exclusively by the respondent or the party initiating arbitration
- No written waiver of ineligibility under the proviso to Section 12(5) was produced by any party
- The arbitral awards were rendered between 2018 and 2025
- The awards were subsequently enforced through Commercial Execution Applications filed before this Court
Procedural History
- 2018 - 2025: Arbitration proceedings initiated and concluded in various matters
- 2025: Office of the Prothonotary & Senior Master of the Bombay High Court reviewed appointment records and identified unilateral appointments in all 200+ matters
- 24.04.2026: List of matters consolidated before Justice Abhay Ahuja for final hearing following the Supreme Court’s decision in Bhadra International
The Parties' Positions
- Applicants (claimants in original arbitration): Argued that the arbitrator’s unilateral appointment violated statutory mandates and rendered the award invalid
- Respondents (defendants in original arbitration): Did not appear or file any written submissions
Relief Sought
Applicants sought setting aside of the arbitral awards, dismissal of pending execution applications, and clarification on the possibility of initiating fresh arbitration without being barred by limitation.
The Legal Issue
The central question was whether an arbitral award is void ab initio when the sole arbitrator was appointed unilaterally by one party, in violation of Section 12(5) of the Arbitration and Conciliation Act, 1996, and whether such a defect can be raised for the first time during execution proceedings.
Arguments Presented
For the Appellant/Petitioner
Counsel for the applicants relied on the Supreme Court’s decision in Bhadra International (India) Pvt. Ltd. v. Airports Authority of India, which held that the ineligibility of an arbitrator under Section 12(5) is a fundamental defect that goes to the root of the tribunal’s authority. They argued that such ineligibility cannot be waived by silence or acquiescence, and that the award is void from inception, regardless of when the objection is raised. They further contended that the absence of a written waiver under the proviso to Section 12(5) rendered the appointment legally impermissible.
For the Respondent/State
No appearance or submissions were made by any respondent. The Court proceeded ex parte, relying on the record and the binding precedent.
The Court's Analysis
The Court examined the Supreme Court’s reasoning in Bhadra International, particularly the observation that Section 12(5) is a mandatory provision designed to ensure impartiality and eliminate any possibility of bias. The Court noted that the provision is not merely procedural but substantive, and its violation strikes at the very foundation of the arbitral process.
"The ineligibility of an arbitrator under Section 12(5) is not a defect that can be cured by subsequent conduct or acquiescence. It renders the appointment void ab initio, and any award flowing from such an appointment is legally non-existent."
The Court held that the Prothonotary & Senior Master’s findings were conclusive: in every matter before it, the arbitrator was appointed unilaterally without any written waiver under the proviso to Section 12(5). The Court emphasized that the Supreme Court’s ruling was not confined to the facts of that case but established a universal principle applicable to all arbitrations under the Act.
The Court further clarified that the defect is not waivable by conduct, and that parties cannot be estopped from challenging the arbitrator’s appointment even at the execution stage. The Court rejected any notion that the passage of time or the finality of the award could validate an appointment that was illegal from the outset.
The Verdict
The Court set aside all arbitral awards rendered in the consolidated matters. All Commercial Execution Applications, Execution Applications, Interim Applications, and Chamber Summons connected thereto were dismissed. The Court held that the period from the invocation of arbitration until the date of this judgment (24.04.2026) shall be excluded in computing limitation for initiating fresh arbitration proceedings. Parties are at liberty to commence new arbitrations in accordance with law, provided the arbitrator is appointed in compliance with Section 12(5). The Court also granted liberty to apply if a written waiver under the proviso to Section 12(5) exists.
What This Means For Similar Cases
Arbitrator Appointments Must Be Joint and Transparent
- Practitioners must ensure that arbitrator appointments under Section 12(5) are made jointly by both parties or through a neutral third party
- Any unilateral appointment, even if accepted by the other party, is void and cannot be ratified later
- Legal notices and arbitration clauses must be reviewed to ensure compliance with statutory eligibility criteria
Written Waiver Is the Only Path to Validity
- A waiver of ineligibility under Section 12(5) must be in writing and executed after the dispute arises
- Oral agreements or implied consent are insufficient
- Parties must retain signed, dated waivers as critical evidence in any future challenge
Execution Proceedings Are Not a Safe Haven for Invalid Awards
- Parties seeking enforcement cannot rely on the finality of an award if the arbitrator was ineligible
- Courts will examine the appointment process even at the execution stage
- Execution applications based on void awards must be dismissed outright
