An arbitrator's appointment violating Section 12(5) of the Arbitration Act without an express written waiver is invalid, rendering any adjudicated award void.

JUDGMENT

% 14.01.2026 C. HARI SHANKAR, J.The lis

1. We are required, in this appeal, to consider the extent to which this case would be covered by the recent judgment of the Supreme Court in Bhadra International (India) (P) Ltd v. Airports Authority of India¹

2. Disputes, which emanated out of an agreement dated 12 January 2016, between the appellant and the respondent, were referred to arbitration and culminated in an arbitral award dated 30 May 2023, which was adverse to the respondent. The respondent challenged the said award before this Court under Section 34 of the Arbitration and Conciliation Act, 1996 , “the 1996 Act”, hereinafter by way of OMP (Comm) 355/2023. By judgment dated 8 May 2024, a learned Single Judge of this Court has allowed OMP (Comm) 355/2023³ and has set aside the arbitral award.

3. Aggrieved thereby, the present appellant, as the respondent in the OMP, has instituted the present appeal.

4. We have heard Mr. Raj Shekhar Rao, learned Senior Counsel for the appellant and Mr. Ankur Mahindro, learned Counsel for the respondent, at length.

5. The learned Single Judge has, by the impugned judgment, set aside the arbitral award, solely on the ground that the appointment of the arbitrator was in violation of Section 12 (5)⁴ of the 1996 Act. In so holding, the learned Single Judge has followed the judgments of the 1 2026 SCC OnLine SC 7, referred to, hereinafter, as “Bhadra”. 3 Union of India v M/s. M.V. Omni Projects (India) Ltd. 4 (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. Supreme Court in Bharat Broadband Network Ltd. v. United Telecoms Ltd. /b>, (2019) 5 SCC 755 and Perkins Eastman Architects DPC v. HSCC (India) Ltd, (2020) 20 SCC 760

6. The Supreme Court has, very recently, clarified the legal position in its judgment in Bhadra. Essentially, the arguments before us revolved around the impact of the said decision on the facts of the present case.

Facts

7. Clause 25 of the General Conditions of Contract governing the agreement between the appellant and the respondent provided for reference of disputes to arbitration, and read as under:

“CLAUSE 25 Except where otherwise provided in the contract, all questions and disputes relating to the meaning of the specifications, design, drawings and instructions here-in before mentioned and as to the quality of workmanship or materials used on the work or as to any other question, claim, right, matter or thing whatsoever in any way arising out of or relating to the contract, designs, drawings, specifications, estimates, instructions, orders or these conditions or otherwise concerning the works or the execution or failure to execute the same whether arising during the progress of the work or after the cancellation, termination, completion or abandonment thereof shall be dealt with as mentioned hereinafter:

(i) ………….

(ii) Except where the decision has become final, binding and conclusive in terms of Sub Para (i) above, disputes or difference shall be referred for adjudication through arbitration by a sole arbitrator appointed by the Chief Engineer, CPWD, in charge of the work or if there be no Chief Engineer, the Additional Director General of the concerned region of CPWD or if there be no Additional Director General,