The Bombay High Court has definitively affirmed that unilateral appointment of an arbitrator renders the entire arbitration process void ab initio, following the binding precedent of the Supreme Court in Bhadra International (India) Pvt. Ltd. v. Airports Authority of India. This judgment invalidates all arbitral awards arising from such appointments and provides clear procedural relief to affected parties.
Background & Facts
The Dispute
These consolidated matters involve 155 commercial disputes where parties had invoked arbitration under various contracts governed by the Arbitration and Conciliation Act, 1996. In each case, one party unilaterally appointed a sole arbitrator without the consent or participation of the other party, in contravention of the statutory framework under Section 12(5) of the Act.
Key Facts
- All arbitration proceedings were initiated between 2018 and 2023
- The sole arbitrator in each case was nominated exclusively by one party, typically the respondent or the party with greater contractual leverage
- No written waiver of ineligibility under Section 12(5) was produced by any party
- Arbitral awards were rendered between 2020 and 2025, ranging from Rs. 50 lakhs to Rs. 12 crores in value
- Execution applications were filed in this Court following the awards
- The Office of the Prothonotary & Senior Master identified the unilateral appointment as a jurisdictional defect in all matters
Procedural History
- 2018 - 2023: Arbitration proceedings initiated across various commercial contracts
- 2020 - 2025: Arbitral awards issued by unilaterally appointed arbitrators
- 2024 - 2025: Execution applications filed before this Court
- 15.03.2026: Supreme Court delivered judgment in Bhadra International (India) Pvt. Ltd. v. Airports Authority of India, holding unilateral appointment void ab initio
- 22.04.2026: This Court, relying on the Supreme Court’s decision, took up these 155 matters for final disposal
Relief Sought
The applicants sought enforcement of the arbitral awards through execution proceedings. No party sought to challenge the merits of the awards, but all sought to validate the underlying arbitration process.
The Legal Issue
The central question was whether an arbitral award rendered by a sole arbitrator appointed unilaterally by one party, without compliance with Section 12(5) of the Arbitration and Conciliation Act, 1996, remains valid and enforceable.
Arguments Presented
For the Appellant/Petitioner
The applicants argued that the awards were final and binding, and that setting them aside would cause undue prejudice and commercial uncertainty. They contended that the other party had participated in the proceedings without objection, thereby acquiescing to the appointment. They relied on the doctrine of waiver and estoppel, suggesting that silence during arbitration amounted to implied consent.
For the Respondent/State
The Respondent, represented by the Office of the Prothonotary & Senior Master, did not oppose the Court’s proposed course of action. The Court noted that the procedural defect was apparent on record and that the Supreme Court’s ruling in Bhadra International left no room for discretion.
The Court's Analysis
The Court held that the Supreme Court’s decision in Bhadra International (India) Pvt. Ltd. v. Airports Authority of India is binding and dispositive. The Court emphasized that Section 12(5) of the Arbitration and Conciliation Act, 1996, imposes a mandatory bar on the appointment of persons with certain conflicts of interest, and that this bar cannot be waived except by a written agreement entered into after the dispute has arisen.
"The ineligibility of an arbitrator under Section 12(5) is not a mere procedural irregularity; it goes to the root of the tribunal’s jurisdiction and renders the entire arbitration process void ab initio."
The Court rejected the argument that participation without objection amounted to waiver, clarifying that Section 12(5) is a statutory safeguard designed to ensure impartiality and cannot be circumvented by conduct. The Court further held that the absence of a written waiver under the proviso to Section 12(5) rendered all appointments invalid, regardless of the parties’ conduct during the proceedings.
The Court also noted that the defect was not merely procedural but jurisdictional, and therefore could be raised at any stage, including during execution, as confirmed by the Supreme Court.
The Verdict
The Court set aside all arbitral awards rendered in these 155 matters due to the unilateral appointment of arbitrators in violation of Section 12(5). All connected execution applications, interim applications, and chamber summons were dismissed. The Court held that the period from the invocation of arbitration until the date of this order (22.04.2026) shall be excluded in computing limitation for initiating fresh arbitration proceedings. Parties are at liberty to commence fresh arbitration in compliance with the Act, provided they enter into a written waiver under the proviso to Section 12(5) if applicable.
What This Means For Similar Cases
Arbitrator Appointments Must Be Joint and Written
- Practitioners must ensure that arbitrator appointments under Section 12(5) are made jointly by both parties or through a mutually agreed institution
- Any attempt to appoint unilaterally - even if the other party participates - will invalidate the award
- Written waivers under the proviso to Section 12(5) must be executed after the dispute arises and must be explicitly documented
Limitation Relief Is Automatic for Fresh Arbitration
- Parties seeking to re-initiate arbitration need not fear limitation bars for the period during which the void arbitration was pending
- The exclusion of time is automatic and does not require a separate application
- This provides a clear, statutory grace period to correct procedural defects without penalty
Enforcement of Awards Is Now Riskier Than Ever
- Lawyers advising clients on enforcement must now conduct a mandatory pre-enforcement audit of the arbitrator’s appointment process
- Execution applications filed on awards from unilateral appointments are now liable to be dismissed outright
- This judgment significantly raises the threshold for enforceability of arbitral awards in India
