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2026 Supreme(Online)(Del) 273
IN THE HIGH COURT OF DELHI AT NEW DELHI
Subramonium Prasad, J
AIRPORTS AUTHORITY OF INDIA – Appellant
Versus
SIKKA ASSOCIATES ARCHITECTS – Respondent
O.M.P. (COMM) 482/2023|OMP (ENF.) (COMM.) 2/2024|EX.APPL.(OS) 8/2024|EX.APPL.(OS) 1686/2024
Important Points
Subject
Arbitration - Arbitration Award Challenge
Act Referred
Headnote
(B) Legal principles - It was reaffirmed that the party appointing the arbitrator cannot later argue that such an appointment is invalid; the Court referenced precedents establishing that unilateral appointments can lead to the award being set aside. (Paras 3, 5, 9, 14)
(C)
Facts of the case:
Petitioner entered into a consultancy agreement with Respondent, which ended in dispute leading to arbitration. The Respondent invoked arbitration under the terms of the agreement, but the process of arbitrator selection was questioned. (Paras 4-10)
Findings of Court:
The Court concluded that the arbitrator's appointment procedure rendered the award invalid, emphasizing the need for impartiality in the appointment process. (Paras 11-14)
Issues: Whether a party that appoints an arbitrator can challenge the resultant arbitral award based on alleged unilateral appointment.
Ratio Decidendi: The court ruled that unilateral appointments raise concerns about impartiality, affirming that the party making such appointments holds the right to challenge the validity of the award if it violates statutory provisions.
Result: The Impugned Award dated 31.07.2023 was set aside, and the enforcement petition became infructuous.
For the Appellants/Petitioners: Mr. Raghav Shankar, Mr. Vaibhav Kalra, Ms. Anisha Upadhyay, Ms. Neha Bhatnagar, Mr. Talha Yusufi, Mr. Gagan Kochar, Ms. Pragya Bansal
For the Respondents: Mr. Vikas Goel, Mr. Harmanbir Singh Sandhu, Mr. Ritesh Sharma, Mr. Vivek Gupta
| Table of Content |
|---|
| 1. challenge of arbitration award under section 34. (Para 1 , 2) |
| 2. petitioner challenges the validity of arbitrator appointment. (Para 3 , 7 , 8) |
| 3. factual background of the arbitration agreement. (Para 4 , 5 , 6) |
| 4. court's observations on appointment process of arbitrator. (Para 9 , 10 , 12) |
| 5. ruling on the consequences of unilateral arbitrator appointment. (Para 11) |
| 6. final decision to set aside the arbitration award. (Para 14 , 15 , 16) |
JUDGMENT
1. O.M.P. (COMM) 482/2023 has been filed by the Airports Authority of India (Petitioner/AAI) under Section 34 of the Arbitration and Conciliation Act, 1996 challenging the Award dated 31.07.2023 (Impugned Award) passed by the learned Sole Arbitrator.
2. OMP (ENF.) (COMM.) 2/2024 has been filed by the Decree Holder seeking enforcement of the Impugned Award passed by the learned Sole Arbitrator.
3. Though the Petitioner/AAI has taken several grounds to challenge the Impugned Award, on 29.01.2025 this Court noted that the learned Sole Arbitrator was appointed by the Petitioner itself and after passing of Impugned Award, the Petitioner has challenged the Impugned Award on the ground that the appointment of Arbitrator was unilateral in nature and, therefore, the Impugned Award be set aside. The question which therefore, arose before this Court was as to whether a party which appoints the arbitrator can turn around and challenge the arbitral award on the ground of unilateral appointment or not. Relevant portions of the Order dated 29.01.2025 reads as under:
“3. Material on record indicates that the appointment is unilateral in nature and an argument is being raised that since the appointment has been unilaterally made, the award be set aside. What is interesting is that it is the Petitioner which had appointed the Arbitrator. The learned Counsel for the Petitioner contends that this does not take away the right of the Petitioner to file a Petition under Section 34 of the Arbitration and Conciliation Act but the right has now arisen because of the judgment passed by the Apex Court in Central Organisation for Railway Electrification v. ECI SPIC SMO MCML (JV) a Joint Venture Company,2024 SCC OnLine SC 3654
4 The question that arises herein is can the party which appoints the Arbitrator turn around and challenge the Award stating that since the appointment has been unilateral in nature, the Award gets vitiated by the judgment passed by the Apex Court in Central Organisation for Railway Electrification (supra).
5. Learned Counsel for the Petitioner draws attention of this Court to the judgment dated 28.05.2024 passed by the Co-ordinate Bench of this Court in O.M.P (COMM) 573/2020 in which an Award has been set aside on the ground where a challenge has been filed by the party who appoints the Arbitrator. The said judgment places reliance on the judgment passed by the Apex Court in Broadband Network Ltd. v. United Telecom Limited , (2019) 5 SCC 755
6. Prima facie, in the opinion of this Court, the judgment passed by the Apex Court in Broadband Network Ltd (supra) arose in a case when the appointment is challenged under Section 14 of the Arbitration and Conciliation Act and was not a case under Section 34 of the Arbitration and Conciliation Act. This Court would also like to consider as to whether the judgment passed by the Apex Court in Broadband Network Ltd (supra) would be applicable to set aside an award where the party who has itself appointed the arbitrator unilaterally seeks to set aside the award on the ground of unilateral appointment.”
4. Before adjudicating upon the above question, this Court deems it fit to appreciate the factual matrix involved in the instant Petition. The Petitioner/AAI and the Respondent entered into an Agreement dated 27.02.2008 wherein the Respondent was engaged by the Petitioner/AAI to provide Architectural /Engineering consultancy services for the proposed new ATC Tower and Technical Building at NSCBI Airport at Kolkata, West Bengal, India. It is st
