1. Challenge to award set aside for unilateral appointment of sole arbitrator under SPA and Arbitration Act. (Para 2 )
Back
Next 
2026 Supreme(Del) 1258
2026 DHC 8624
IN THE HIGH COURT OF DELHI AT NEW DELHI
AVNEESH JHINGAN, SHAIL JAIN, JJ.
Tarsem Jain - Appellant
Versus
Bharat Forge Limited and Anr. - Respondents
FAO(OS) (Comm) No. 150 of 2025 & CM Appl. No. 60540 of 2025
Decided On : 01-10-2026
Advocates Appeared :
For the Appellant : Mr. Challa Kodanda Ram, Senior Adv. with Mr. Nikunj Dayal, Mr. Pramod Dayal, Mr. Ashwani Kumar Sharma, Mr. Prashant Joshi, Mr. Virat Singhal, Mr. Rakesh Kumar, Mr. Angad Mehta & Mr. Arsh.
For the Respondents : Mr. Nakul Dewan, Senior Adv. with Ms. Ashima Sharma, Mr. Parag Khandhar, Mr. Krishan Kumar, Mr. Satyender & Ms. Ananya Patwardhan.
Important Points
Unilateral appointment of a sole arbitrator in violation of the agreed contractual procedure and Section 11 of the Arbitration and Conciliation Act, 1996, is void ab initio, rendering the resulting award a nullity, regardless of the parties' participation under protest.
Subject
Civil Law - Arbitration
Act Referred
Headnote
(A) Appointment of Arbitrator - Unilateral Appointment - Appointment of a sole arbitrator by one party in contravention of the agreed procedure in the contract and the statutory procedure under Section 11 of the Arbitration and Conciliation Act, 1996, is void ab initio. (Para 11)
(B) Waiver - Participation under Protest - Participation in arbitral proceedings under protest and raising timely objections under Section 16 does not constitute a waiver of the right to challenge a void appointment. (Para 12, 18)
(C) Independence and Impartiality - Unilateral Appointment - A clause or action allowing one party to unilaterally appoint a sole arbitrator gives rise to justifiable doubts regarding the independence and impartiality of the arbitrator, violating the spirit of Section 18. (Para 14, 16)
(D) Applicability of Amendments - Section 34 Petitions - The amended Section 34 of the Act applies to petitions filed after the commencement of the Amendment Act, even if the arbitration proceedings were initiated prior to the amendment. (Para 20)
Issues: Whether the unilateral appointment of a sole arbitrator, contrary to the agreed procedure and Section 11 of the Act, renders the resulting award a nullity despite the parties' participation in the proceedings.
(B) Waiver - Participation under Protest - Participation in arbitral proceedings under protest and raising timely objections under Section 16 does not constitute a waiver of the right to challenge a void appointment. (Para 12, 18)
(C) Independence and Impartiality - Unilateral Appointment - A clause or action allowing one party to unilaterally appoint a sole arbitrator gives rise to justifiable doubts regarding the independence and impartiality of the arbitrator, violating the spirit of Section 18. (Para 14, 16)
(D) Applicability of Amendments - Section 34 Petitions - The amended Section 34 of the Act applies to petitions filed after the commencement of the Amendment Act, even if the arbitration proceedings were initiated prior to the amendment. (Para 20)
Issues: Whether the unilateral appointment of a sole arbitrator, contrary to the agreed procedure and Section 11 of the Act, renders the resulting award a nullity despite the parties' participation in the proceedings.
Legal Category Hierarchy
- practice and procedure
- contract law
Advocates:
For the Appellants/Petitioners: Challa Kodanda Ram, Nikunj Dayal, Pramod Dayal, Ashwani Kumar Sharma, Prashant Joshi, Virat Singhal, Rakesh Kumar, Angad Mehta, Arsh
For the Respondents: Nakul Dewan, Ashima Sharma, Parag Khandhar, Krishan Kumar, Satyender, Ananya Patwardhan
For the Appellants/Petitioners: Challa Kodanda Ram, Nikunj Dayal, Pramod Dayal, Ashwani Kumar Sharma, Prashant Joshi, Virat Singhal, Rakesh Kumar, Angad Mehta, Arsh
For the Respondents: Nakul Dewan, Ashima Sharma, Parag Khandhar, Krishan Kumar, Satyender, Ananya Patwardhan
Table of Contents
2. Appellant: appointment not unilateral; no timely objection. Respondent: appointment violated agreed procedure; no waiver of right to object. (Para 3 , 4 )
3. Unilateral appointment contrary to Clause 20 SPA and Section 11 Act; participation under protest does not ratify void appointment. (Para 11 , 12 , 14 , 17 , 19 )
4. Unilateral appointment of arbitrator violates agreed procedure and statutory scheme, rendering proceedings a nullity. (Para 11 , 14 , 17 )
5. Appeal dismissed; no interference with judgment setting aside award for void appointment. (Para 22 )
6. Is a unilateral appointment of a sole arbitrator valid when the arbitration agreement requires mutual consent?
No, such an appointment violates the agreed procedure under Clause 20 and Section 11 of the Act, making it void ab initio and the award a nullity. (Para 11 , 14 , 17 )
7. Does participation in arbitration proceedings under protest waive the right to object to a unilateral appointment?
No, participation under protest does not waive the objection; a party retains the right to challenge the appointment at the appropriate stage. (Para 12 , 18 )
8. Does a unilateral appointment of an arbitrator violate the principle of equal treatment of parties under Section 18?
Yes, unilateral appointment creates justifiable doubts about impartiality and violates the spirit of equal treatment under Section 18. (Para 16 )
9. Does the 2015 Amendment to Section 12 apply to arbitration proceedings that commenced before October 2015?
No, Section 12(5) of the Amendment does not apply retrospectively, but that does not validate an otherwise void unilateral appointment. (Para 17 )
10. What is the scope of an appeal under Section 37 against a Section 34 judgment?
It is narrow and circumscribed; the appellate court cannot undertake an independent assessment of the merits and must stay within Section 34 grounds. (Para 7 )
JUDGMENT :
Avneesh Jhingan, J.
1. The present composite appeal is filed under Section 37 of the Arbitration and Conciliation Act, 1996 (for short ‘the Act’) against the common judgement dated 26.05.2025 (hereinafter ‘the impugned judgment’)passed by the learned Single Judge.
1.1 By the impugned judgement the learned Single Judge allowed the petitions under Section 34 of the Act filed by Bharat Forge Limited (for short ‘BFL’) and BF Infrastructure Limited (for short ‘BF Infra’) (hereinafter collectively referred to as ‘the respondents’) and set aside the award dated 10.05.2019. It was held that the sole arbitrator was appointed unilaterally. The execution petition filed by Tarsem Jain (hereinafter ‘the appellant’) was dismissed. The impugned judgement disposed of two Section 34 petitions and an enforcement petition all arising out of the same award and involving the same parties and hence, this composite appeal is being entertained.
2. The factual matrix is that the appellant entered into a Share Purchase Agreement dated 18.12.2010 (for short ‘SPA’) with BF Infra, a subsidiary company of BFL. 100% of the equity share capital of Coal Columbia SAS, Mines and Minerals Company of Columbia SAS and Multitex Africa SA (hereinafter ‘the companies’) was to be transferred to Aggressive Projects Private Limited (for short ‘APPL’) and also 90% of the nominal value of the equity shares of APPL was to be transferred to BF Infra. The transaction was followed by an engagement letter dated 18.01.2011 whereunder the appellant was appointed as the ‘Advisor-Global Mining’ by BFL.
2.1 Dispute arose between the parties and BF Infra on 16.08.2012 terminated the SPA consequent thereto BFL terminated the engagement of the appellant. Clause 20 of the SPA provided for dispute resolution through arbitration. The appellant invoked arbitration on 03.06.2013 calling upon BF Infra to appoint a sole arbitrator with consent of the appellant. A reminder dated 24.07.2014 was sent by the appellant for nomination of the arbitrator and stating that on failure the appellant would make the appointment. On 15.12.2014 the appellant nominated the sole arbitrator.
2.2 BF Infra vide reply dated 23.12.2014 raised a counter-claim of Rs.51,28,423/-. The statement of claim (SOC) was filed before the arbitrator on 12.08.2015. After the service of the SOC, BF Infra on 09.09.2015 objected to the unilateral appointment of the sole arbitrator and an affidavit raising the objection was filed on 25.09.2015. On the same day BFL filed an application under Section 16 of the Act contending that BFL was not a signatory to the SPA and was not bound by the arbitration agreement. On 16.12.2015 the arbitrator rejected the objection raised by BF Infra and dismissed the Section 16 application of BFL holding that prima facie BFL was also a party to the dispute. BF Infra filed a memo on 09.01.2016 stating that BF Infra is participating in the proceedings under protest and objects to the to the unilateral appointment of the arbitrator.
2.3 The proceedings culminated in award dated 10.05.2019. The arbitrator allowed the claim of the appellant and awarded compensation of Rs.77,00,00,000/- and the counter claims were dismissed. The BF Infra and BFL filed petitions under Section 34 of the Act challenging the award on merits and the unilateral appointment of the arbitrator. The learned Single Judge held the appointment of the sole arbitrator to be void ab-initio and the proceedings a nullity, the award was set aside. Hence, the present appeal.
3. Learned counsel for the appellant submits that the appointment of the arbitrator cannot be termed unilateral. The respondents failed to respond to the notices invoking arbitration and did not object to nomination of the sole arbitrator. The objection against the appointment was raised for the first time on 09.09.2015 but was rejected by the arbitrator on 16.12.2015 yet the respondent chose not to file petition under Section 11 of the Act for fresh appointment.
3.1 It i
