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K. R. SHRIRAM, SENTHILKUMARRAMAMOORTHY
VR Dakshin Private Limited (formerly known as Sugam Vanijya Holdings Private Limited) – Appellant
Versus
SCM Silks Private Limited – Respondent
JUDGMENT :
THE CHIEF JUSTICE
Prayer : Appeals under Section 37 of the Arbitration and Conciliation Act, 1996 read with Clause 15 of the Letters Patent read with Order 36 Rule 1 of the Original Side Rules and Section 13(1) of the Commercial Courts Act, 2015 to set aside the common order dated 20.4.2023 made in Arb. O.P. (Com. Div) No.257 of 2021 and 209 of 2022.
Appellant, unhappy with the order dated 20.4.2023 passed by the learned Single Judge under Section 34 of the Arbitration and Conciliation Act, 1996 (the Act), has preferred these appeals under Section 37 of the Act. The learned Single Judge, by the impugned order, set aside an award dated 22.3.2021 made by the Sole Arbitrator, Hon'ble Mr. Justice A.Ramamoorthy, a Former Judge of the Madras High Court, inter alia, on grounds of appointment of the Sole Arbitrator purportedly being foul of the Seventh Schedule read with Section 12 of the Act.
2. Appellant is engaged in the business of developing and operating commercial projects and malls. First respondent, which is engaged in the business of operating and running retail textile outlets in the State of Tamil Nadu, popularly known as “The Chennai Silks”, was inclined to open a store
Participation in arbitration without objection constitutes a waiver of the right to challenge the appointment of the arbitrator, as per Sections 4 and 12 of the Arbitration and Conciliation Act.
The main legal point established in the judgment is that the appointment of the sole arbitrator unilaterally by one of the parties was improper and impermissible, violating the provisions of Section ....
A unilateral appointment of an arbitrator by one party contravenes Section 12(5) of the Arbitration and Conciliation Act, rendering the arbitral award void ab initio and against public policy.
Unilateral appointment of an arbitrator without proper notice and in violation of statutory provisions renders the resulting award unsustainable and against the public policy of India.
Parties can waive objections to an arbitrator's ineligibility by express agreement after disputes arise, as per Section 12(5) of the Arbitration and Conciliation Act.
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