Parties consenting to arbitration and participating without objection cannot later challenge the arbitral award based on alleged unilateral appointment of the arbitrator.

JUDGMENT :

C. HARI SHANKAR, J.

The Issue, and our view

1. The contract between the appellants and respondent Airport Authority of India [“AAI” hereinafter] envisages arbitration of disputes by a Sole Arbitrator to be appointed by the respondent. In terms thereof, the appellants wrote to the AAI, call on the respondent to appoint a Sole Arbitrator. The respondent appointed a learned retired Judge of the Supreme Court. Before learned Arbitrator, both the parties submitted that they had no objection to his arbitrating on the disputes. The Record of Proceedings, so prepared, was communicated to the parties, and neither party objected. An arbitral award was passed. The unsuccessful appellant challenged the award under Section 34 of the Arbitration and Conciliation Act, 1996 [“the 1996 Act” hereinafter]. No dispute, regarding the legality of appointment of the Arbitrator, was raised in the Section 34 petition. However, during arguments before a learned Single Judge of this Court, a preliminary submission was advanced, by the appellant, that the arbitral award was entirely vitiated as the appointment of the arbitrator was unilateral and, therefore, vitiated in view of Section 12(5) [Notwithstanding any prior agreement to the contrary, any person whose relationship, with the parties or counsel or the subject-matter of the dispute, falls under any of the categories specified in the Seventh Schedule shall be ineligible to be appointed as an arbitrator: Provided that parties may, subsequent to disputes having arisen between them, waive the applicability of this sub-section by an express agreement in writing] of the 1996 Act. The learned Single Judge has dismissed the objection. The appellant is in appeal.

2. The question that arises is whether, in such circumstances, the appellants can maintain a successful challenge against the impugned judgment of the learned Single Judge.

3. Cases turn on facts. In deciding the above issue, we have to note that:

(i) the arbitration agreement between the parties envisaged appointment of the arbitrator by AAI,

(ii) in terms of the said Clause, Appellant 1 wrote to AAI, requesting AAI to appoint the arbitrator,

(iii) the appointment of the arbitrator by AAI was, thus, effectively ad invitum,

(iv) before the learned Arbitrator, the appellant stated, on 22 March 2016, that it had no objection to his arbitrating on the dispute,

(v) this submission was reduced to writing by the learned Arbitrator,

(vi) the said order was communicated to both parties, and the appellant never questioned the correctness of what was recorded therein,

(vii) rather, the appellant participated, without demur, in the arbitration, and even preferred applications, before the learned Arbitrator, under Section 17 of the 1996 Act, Schedule shall be ineligible to be appointed as an arbitrator:

Provided that parties may, subsequent to disputes having arisen between them, waive the applicability of this sub-section by an express agreement in writing.

(viii) during the currency of the arbitral proceedings, Section 12 of the 1996 Act was amended to introduce, therein, sub- section (5), which proscribed, unilateral appointment of the arbitrator by one of the parties,

(ix) even thereafter, the appellant never moved any application before the learned Arbitrator, or before this Court, questioning his jurisdiction or competence,

(x) even in the Section 34 petition [OMP (Comm) 414/2018 and OMP (Comm) 415/2018, in which the presently impugned judgment has been passed] which came to be filed by the appellant challenging the arbitral award, no contention that the appointment of the learned Arbitrator was unilateral and that, therefore, the arbitral award was vitiated, was taken,

(xi) it was