The Bombay High Court has definitively affirmed that unilateral appointment of an arbitrator renders the entire arbitration process void ab initio, in strict conformity with the Supreme Court’s ruling in Bhadra International (India) Pvt. Ltd. v. Airports Authority of India. This judgment has immediate and far-reaching consequences for pending and future commercial arbitrations in India, particularly where parties have bypassed statutory safeguards under the Arbitration and Conciliation Act, 1996.
Background & Facts
The Dispute
These consolidated matters - Serial Nos. 16 to 165 - involve commercial disputes where parties invoked arbitration clauses in contracts. In each case, one party unilaterally appointed a sole arbitrator without the consent or participation of the other party, in contravention of the mandatory provisions of Section 12(5) of the Arbitration and Conciliation Act, 1996. The Prothonotary & Senior Master’s office of the Bombay High Court identified this procedural defect in all cases during preliminary scrutiny.
Key Facts
- All matters arose from commercial contracts containing arbitration clauses
- In each instance, the arbitrator was appointed by one party alone, without mutual agreement or institutional oversight
- Arbitral awards were rendered based on these unilateral appointments
- The awards were subsequently challenged through Commercial Execution Applications and Interim Applications before the Bombay High Court
- No party had raised the issue of arbitrator ineligibility prior to the Supreme Court’s decision in Bhadra International
Procedural History
- Prior to 30.03.2026: Arbitration proceedings initiated and awards rendered in all 150 matters
- 2026 SCC Online SC 7: Bhadra International (India) Pvt. Ltd. v. Airports Authority of India decided by the Supreme Court on an unspecified date prior to 30.03.2026, holding that unilateral appointment of an arbitrator is void ab initio and the objection can be raised at any stage, including execution
- 30.03.2026: Bombay High Court, per Justice Abhay Ahuja, took judicial notice of the Supreme Court’s ruling and listed these matters for final disposal
The Parties' Positions
- Applicants (Challengers): Argued that the arbitrator’s appointment violated Section 12(5) and the principles of impartiality and independence under the Act, rendering the awards invalid
- Respondents (Award Holders): Did not appear or file any submissions; no opposition was raised to the application of Bhadra International
Relief Sought
The applicants sought: (1) setting aside of the arbitral awards; (2) dismissal of Commercial Execution Applications; (3) disposal of all connected interim applications; and (4) liberty to initiate fresh arbitration proceedings.
The Legal Issue
The central question was whether an arbitral award rendered by a sole arbitrator appointed unilaterally by one party, in violation of Section 12(5) of the Arbitration and Conciliation Act, 1996, remains valid and enforceable, or whether such appointment is void ab initio under the Supreme Court’s ruling in Bhadra International v. Airports Authority of India.
Arguments Presented
For the Appellant/Petitioner
The applicants relied exclusively on the binding precedent of Bhadra International v. Airports Authority of India, where the Supreme Court held that any appointment of an arbitrator in breach of Section 12(5) is void from the outset, regardless of when the objection is raised. They argued that the statutory bar on ineligibility is not a procedural technicality but a substantive safeguard for impartiality, and that the Prothonotary’s findings confirmed the unilateral nature of the appointments in all cases.
For the Respondent/State
No appearance or submissions were made by any respondent. The Court proceeded ex parte, noting the absence of any counter-argument or attempt to justify the unilateral appointments.
The Court's Analysis
The Court held that the Supreme Court’s decision in Bhadra International is binding and applies directly to all cases where the arbitrator’s appointment violates Section 12(5). The Court emphasized that the ineligibility of an arbitrator is not a curable defect and cannot be waived by silence or acquiescence unless there is an express written waiver under the proviso to Section 12(5).
"The Hon'ble Supreme Court has unequivocally held that unilateral appointment of an arbitrator is void ab initio and the ineligibility can be raised at any stage and even in execution."
The Court rejected any notion that the passage of time or the issuance of an award could validate an appointment that was legally impermissible from inception. It further clarified that the doctrine of approbation and reprobation does not apply here, as the statutory bar under Section 12(5) is absolute and non-waivable except by express written agreement.
The Court also noted that the Prothonotary’s office had independently verified the unilateral nature of the appointments in all matters, leaving no room for factual dispute.
The Verdict
The applicants succeeded. The Court set aside all arbitral awards rendered in Serial Nos. 16 to 165, dismissed all Commercial Execution Applications and connected interim applications, and directed that the proceedings be disposed of accordingly. The Court held that the period from the invocation of arbitration until 30.03.2026 shall be excluded in computing limitation for initiating fresh arbitration proceedings. Parties are at liberty to commence new arbitrations, provided they comply with Section 12(5), and may rely on any express written waiver under the proviso to Section 12(5).
What This Means For Similar Cases
Arbitrator Appointments Must Be Mutual or Institutional
- Practitioners must ensure that arbitrator appointments under Section 12(5) are either mutually agreed upon or made by an appointing institution
- Any unilateral appointment, even if accepted by the other party during proceedings, is void ab initio
- Counsel must raise ineligibility objections at the earliest opportunity, but even if delayed, the defect remains fatal to the award
Waiver Must Be Express and in Writing
- A mere oral agreement or conduct implying consent does not satisfy the proviso to Section 12(5)
- Only a written waiver, signed by both parties after the dispute arises, can cure the ineligibility
- Standard arbitration clauses that do not explicitly waive Section 12(5) are insufficient
Execution Proceedings Are Not Safe Havens
- Arbitral awards obtained through unilateral appointments cannot be enforced, even if no objection was raised during arbitration
- Execution applications based on such awards are liable to be dismissed outright
- Courts will now routinely verify arbitrator appointment procedures at the pre-execution stage
