Unilateral appointment of an arbitrator by one party is impermissible, and ineligibility to appoint an arbitrator is established based on relevant legal provisions and precedents.

JUDGMENT

Vibhu Bakhru, J. - The petitioner has filed the present petition under Section 14 of the Arbitration and Conciliation Act, 1996 (hereinafter the 'A&C Act'), 1996, inter alia, praying that the appointment of the Sole Arbitrator appointed by the respondent be declared void. The petitioner also impugns the order dated 29.07.2020 passed by the learned Arbitrator rejecting the petitioners application challenging his appointment.

2. The parties had entered into an agreement on 31.01.2020 ( 'the Agreement') for operating of a restaurant and bar, namely "CAFF ME", in the basement and ground floor of the building bearing no.B1/1 and B1/2, Block, Community Centre, Janakpuri. The petitioner claims that the restaurant could not be operated successfully in view of the lockdown imposed on account of the outbreak of COVID-19.

3. The respondent sent an email dated 02.06.2020 alleging nonperformance on the part of the petitioner. Thereafter, by a letter dated 05.06.2020, the respondent terminated the Agreement dated 31.01.2020.

4. Admittedly, disputes have arisen between the parties in connection with the said Agreement dated 31.01.2020.

5. By a notice dated 04.07.2020, the respondent proceeded to appoint a former District Judge as the Sole Arbitrator to adjudicate the disputes between the parties.

6. The petitioner objected to such appointment and suggested the name of another former Additional District Judge to be appointed as an Arbitrator to adjudicate the disputes between the parties. However, it appears that this was not acceptable to the respondent. In the meanwhile, on 07.07.2020, the Arbitrator appointed by the respondent accepted his appointment and on the next date (that is, on 08.07.2020) issued a notice to the parties to appear before him on 22.07.2020 for further proceedings.

7. The petitioner requested the learned Arbitrator to withdraw from the arbitral proceedings in view of the challenge to his appointment. However, the said request was rejected by an order dated 29.07.2020. The learned Arbitrator referred to the decision of the Supreme Court in Central Organisation For Railway Electrification v. ECI-SPIC-SMOMCML(JV): Civil Appeal Nos.9486-9487/2019 decided on 17.12.2019 and held that the petitioner could not be allowed to raise objection to the appointment of the Sole Arbitrator as the same was in terms of the procedure as contemplated under the arbitration clause.

8. The learned counsel for the petitioner referred to the decisions of the Supreme Court in "TRF Limited v. Energo Engineering Projects Limited, (2017) 8 SCC 377" and " Perkins Eastman Architects DPC & Anr. v. HSCC (India) Ltd.,2019 SCCOnLineSC 1517 and contended that in view of the said decisions, it is no longer open for the respondent to unilaterally appoint an Arbitrator. He further submitted that in view of the decision of the Supreme Court in HRD Corporation (Marcus Oil and Chemical Division) v. GAIL (India) Limited: Civil Appeal No. 11126 of 2017 decided on 31.08.2017, it was open for the petitioner to challenge the appointment of an Arbitrator under Section 12(5) of the A&C Act by filing a petition under Section 14 of the A&C Act. He also referred to the decision of the Supreme Court in Bharat Broadband Network Limited v. United Telecoms Limited, (2019) 5 SCC 755 as well as the decision of this Court in Proddatur Cable TV Digi Services v. Citi Cable Network Limited, (2020) 267 DLT 51 in support of his contention that the unilateral appointment of an Arbitrator by the respondent was impermissible.

9. The learned counsel for the respondent countered the aforesaid submissions and submitted that this issue is squarely covered by the decision of the Supreme Court in Central Organisation For Railway Electrification (supra) and the Arbitrator was required to be appointed in terms of the procedure as agreed upon between the parties under the arbitration clause. He also referred to the decision of the Supreme Court in State Trading Corporation of India Ltd. v. Jind