An award rendered by an ineligible arbitrator is void ab-initio, and the appointment of an arbitrator by an ineligible person goes to the root of the arbitrator's jurisdiction.

JUDGMENT

Prateek Jalan, J. (Oral)--By way of the present petition under Section 34 of the Arbitration and Conciliation Act, 1996 [hereinafter, "the Act"], the petitioner assails an award dated 22.08.2019 rendered by a sole arbitrator in a dispute between the respondents herein (who were the claimants before the learned arbitrator) and the petitioner (who was the respondent therein).

2. The first ground raised in support of the petition by Mr. Rajeeve Mehra, learned Senior Counsel for the petitioner, is that the arbitral proceedings were void ab-initio as the learned arbitrator was unilaterally appointed by the Secretary, Department of Legal Affairs, Government of India, who was himself ineligible to act as the arbitrator.

3. I have heard Mr. Mehra and Mr. J.M. Kalia, learned counsel for the respondents on this issue.

4. Respondent No.1, National Research Development Corporation [hereinafter, "NRDC"] is an enterprise of the Department of Scientific and Industrial Research, Government in India ["hereinafter, "DSIR"], which is arrayed as respondent No.2. The arbitration proceedings arose out of a Tripartite Agreement dated 23.11.2010 [hereinafter, "the Agreement"] by which the respondents agreed to support a project of the petitioner for development of a process for "E-waste recycling and precious metal recovery".

5. Clause 15 of the Agreement contains an arbitration clause in the following terms:

"If any dispute or difference arises between the parties hereto as to the construction, interpretation, effect and implication of any provision of this Agreement including the rights or liabilities or any claim or demand of any Party (or its extent) against other party or its sub-contractor or in regard to any matter under these presents but excluding any matters, decisions or determination of which is expressly provided for in this Agreement such disputes or differences shall be referred to the sole arbitration of the Secretary of Department of Legal Affairs, Govt. of India or his nominee. A reference to the arbitration under this clause shall be deemed to be submission within the meaning of the Arbitration and Conciliation Act, 1996 and any modification or re-enactment thereof and the rules framed thereunder for the time being in force."

(Emphasis Supplied)

6. Disputes having arisen between the parties, NRDC invoked arbitration by a communication dated 08.12.2017 addressed to the Secretary, Department of Legal Affairs. In the said communication, it specifically referred to the provisions of the Arbitration and Conciliation (Amendment) Act, 2015 and requested the addressee not to act as the arbitrator, but to nominate any other person who may not fall under the categories specified in the Fifth and Seventh Schedules to the Act.

7. Pursuant to this request, the Secretary, Department of Legal Affairs, issued an order dated 22.02.2018, appointing Shri Sarvesh Chandra, Former Chairman, FERA Board as the sole arbitrator. The arbitrator entered into the reference on 05.03.2018 and also made a declaration in terms of the Act.

8. After the conclusion of the arguments before the arbitrator, and during the period when the award was reserved, a communication dated 16.08.2019 was addressed by Mr. Kalia (who was acting for NRDC and DSIR in the arbitration proceedings also) to the arbitrator (incidentally, without copying the petitioner herein or its representative), in which it was stated as follows:

" ***** ***** *****

Respected Sir,

The aforestated issue alongwith the other connected issues were put up and considered by the competent authorities of National Research Development Corporation/DSIR, Ministry of Science and Technology (Govt. of India). After active and considered deliberation by the respective authorities, the contentious legal issues emerged, gist of which, I have been directed by the National Research Development Corporation to convey to you:

***** ***** *****

4. The Secretary Department of Legal Affairs, Ministry of Law (Govt. of I