The unilateral appointment of an arbitrator is impermissible under the Arbitration and Conciliation Act, 1996, unless there is a valid express waiver of ineligibility subsequent to the dispute arising.

JUDGMENT

Vibhu Bakhru, J. The petitioner has filed the present petition under Sections 14 and 15 of the Arbitration and Conciliation Act, 1996 (hereinafter the `A&C Act'), inter alia, seeking that the mandate of the learned Sole Arbitrator appointed by the respondent be terminated. According to the petitioner, the learned Arbitrator is de jure unable to act as an Arbitrator under the A&C Act.

2. The disputes between the parties arise out of a contract whereby the respondent had sub-contracted the work of "Trenching, Laying Installation, Testing of Optical Fiber Cable, PLB-Duct and accessories for construction of exclusive optical NLD backbone and optical access routes on turnkey basis for Defence Network for specified part of Package F totaling to 224 Km (approx.) in the State of West Bengal."

3. Bharat Sanchar Nigam Limited (hereinafter `BSNL') had invited tenders (Tender No. CA/CNP/NFS OFC/T-441/2013) for procurement, supply, trenching, laying, installation, testing and maintenance of optical fiber cable, PLB duct and accessories for construction of exclusive optical National Long Distance (`NLD') backbone and optical access routes on turnkey basis for the defence network. The tender was for the Network For Spectrum (NFS) project of the Ministry of Defence, Government of India.

4. The aforesaid works was divided into seven packages- Packages A to G. The implementation of the project was undertaken jointly by BSNL and Project Implementation Core Group (PICG). On 16.09.2014, a contract for executing Package F was awarded by BSNL to ITI Limited. The said Package consisted of 6021 Km of Optical Access Routes in the States of West Bengal, Orissa, Bihar, Jharkhand, Sikkim and Andaman and Nicobar Islands. The works were required to be completed within a period of eighteen months.

5. On 17.10.2014, ITI Limited sub-contracted the entire works to be executed under Package F to A2Z Infra Engineering Limited. It is averred that in the month of February, 2015, A2Z Infra Engineering Limited, further, sub-contracted the work to the respondent herein.

6. On 20.02.2015, the respondent issued a Letter of Intent (hereafter `LOI') to the petitioner for executing the work relating to "obtaining ROW, survey, trenching, laying, installation, testing and commissioning of optical fiber cable, PLB duct & accessories for construction of exclusive optical NLD backbone and optical access route for defence network for a specified part of Package F of 224 km (approximately) in the State of West Bengal". In terms of the said LOI, the petitioner was called upon to issue a bank guarantee for an amount equivalent to 5% of the total work (that is, a bank guarantee in the sum of Rs.25,20,000/-). The said LOI expressly stated that a detailed Work Order setting out the terms and conditions would be executed between the parties separately, if the petitioner fulfilled the condition under the LOI of providing the bank guarantee. On 22.02.2015, the petitioner furnished a performance bank guarantee in the sum of Rs.25.20 lacs being 5% of the value of the total work as mentioned in the LOI.

7. The petitioner states that thereafter, on 17.03.2015, the petitioner commenced the work in accordance with the LOI, on a representation made by the respondent that it would be paid for the same notwithstanding that the Work Order was not issued.

8. On 11.08.2015, the respondent issued a Work Order for a total of 1056.85 Km "for obtaining Row, Survey, Trenching, Laying, Installation, Testing & Commissioning of Optical Fibre Cable, PLB Duct & Accessories for construc