Arbitrator – Appointment by ad invitum & proviso to Section 12(5) of AA
The arbitral atmosphere is changing day by day. The prevailing philosophy of the day, so far as the arbitration is concerned, is to foster arbitration and maximize resolution of disputes by the arbitral process. Courts are now advisedly cautious while dealing with technical objections to arbitral awards and it is only when the objection is ex facie fatal, that an arbitral award ordinarily should be jettisoned. Still less should the Court be inclined to interfere when, in as a case such as this, a party acquiesced to the arbitration proceedings without raising a finger with respect to the authority, jurisdiction or competence of the learned Arbitrator and suffering an adverse award, belatedly seeks to raise a challenge to the jurisdiction of the Arbitrator to arbitrate.
Para 34 – If in such circumstances, the appellants is to be permitted to wish away the arbitral award which, for obvious reasons, is not palatable to the appellants, it would do complete disservice to the entire arbitral institution. Such a decision, we are seriously afraid, would erode, to a substantial degree, the faith of the public in the very institution of arbitration.
Appointment of Arbitrator on the request of a party – Unilateral appointment of Arbitrator – Waiver in terms of proviso to Section 12(5) of the AA –
By the letter dated 27.11.2015, the appellant no.1 raised the claims and sought reference of disputes to arbitration. In the same letter, the appellant no.1 sought appointment of sole arbitrator.
Appointment of Arbitrator was effectively ad invitum
The contract provided for appointment of a Sole Arbitrator. The respondent appointed learned former Judge of the Supreme Court as sole Arbitrator. Both the parties submitted their no objection to the Arbitrator to arbitrate the disputes.
Arbitral Award was passed on 30.7.2018. In Section 34 petition, the Award was challenged. However, no challenge to the appointment of sole Arbitrator was made in section 34 petition. It was during arguments that a preliminary submission was made that the unilateral appointment was vitiated. The learned Single Judge overruled the objection.
HELD that the objection is a belated afterthought of the appellants even after section 34 petition was filed.
Judgment dated 11.2.2025 of the Division Bench of the High Court of Delhi in FAO (OS) (CO) 23/2025 of Bhadra International India Pvt Ltd and others Vs. Airports Authority of India
