The unilateral appointment of a Sole Arbitrator by one party, without proper invocation under the Act, is invalid and constitutes an abuse of the process of law.

JUDGMENT

Sanjeev Narula, J. - The present petition under Section 14(2) of the Arbitration and Conciliation Act, 1996, seeks termination of the mandate of the Sole Arbitrator appointed unilaterally by the Respondent.

2. It is apposite to note the factual background before dealing with the contentions of the parties. The same is narrated below in brief:

i. The Petitioner is a group housing co-operative society, formed and registered in the year 1991 under the Uttar Pradesh Co-operative Societies Act, 1965.

ii. It entered into a 'collaboration agreement' on 23rd June, 2006 with a partnership firm M/s. Rose Enterprises (through its partner Mr. S. L. Maloo) for construction of residential flats/ bungalows/ commercial construction for its members. Later, M/s. Rose Enterprises was incorporated into the Respondent company with Mr. S. L. Maloo as its Director, and its responsibilities under the abovesaid agreement were assigned to the Respondent.

iii. Under Clause 3 of the abovesaid agreement, it was inter alia agreed that the Respondent would be entitled to introduce 25 new members in the place of existing members who exhibited their desire to withdraw from the Petitioner-Society. Under such terms, Mr. S. L. Maloo was inducted to the Managing Committee, and went on to become the President, taking full control of the Petitioner-Society.

iv. Petitioner alleges that Mr. Maloo, by misusing his position as the President: (a) started inducting members in the Petitioner-society without the knowledge of its Managing Committee or its members, and (b) on behalf of the Petitioner-Society, entered into a tripartite agreement titled 'Indenture of Collaboration' dated 09th February, 2010 with M/s. Antriksh Realtech Pvt. Ltd. [hereinafter referred to as 'Antriksh Realtech'] and the Respondent for development, construction and finishing of the housing society.

v. In the year 2016, the members of Petitioner-Society came to know that Mr. S. L. Maloo was involved in unlawful activities against the Petitioner-Society such as siphoning off, mismanagement and misappropriation of funds of the society, awarding membership of the society unlawfully, opening and maintaining secret bank accounts in the name of the society. On this ground, a complaint u/S. 38 of the U.P. Cooperative Societies Act, 1965 was filed against him before the Housing Commissioner/Sub-Registrar of Awas and Vikas Parishad, Lucknow. Thereafter, Mr. S. L. Maloo was removed from the post of President of the Managing Committee of the Petitioner-Society vide an order dated on 27th October, 2016 passed by the Housing Commissioner.

vi. It is alleged that after being ousted, Mr. Maloo, through the Respondent company, initiated numerous arbitration proceedings against the Petitioner-Society, impleading Antriksh Realtech as well as various government departments as Respondents thereto.

vii. Sometime in 2017, the Respondent herein, without serving any notice invoking arbitration, unlawfully and unilaterally appointed a panel of three arbitrators, under the agreement dated 9th February 2010. The Arbitral Tribunal accepted such appointment, without making statutory disclosures under Section 12 and without going through the arbitration clause of the agreement which says that the dispute was to be referred to the Arbitral Tribunal consisting of two arbitrators - one to be appointed by the Petitioner and the other to be appointed by respondent.

viii. In the said arbitral proceedings, an order dated 08th March, 2017 was passed by the Tribunal, inter alia staying the Order dated 27th October, 2016 passed by the Housing Commissioner/ Sub-Registrar of Awas and Vikas Parishad, Lucknow.

ix. On 10th May, 2017, the Petitioner raised a challenge to the appointment and jurisdiction of the Tribunal. However, by virtue of non-appearance of the Claimant/Respondent herein, the arbitration proceedings were terminated due to non-prosecution on the same date.

x. On the very same day i.e., 10th May 2017, the Respondent-Company again