TITAGARH RAIL SYSTEMS LIMITED vs RAILWAY BOARD MINISTRY OF RAILWAYS GOVERNMENT OF INDIA

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2026 Supreme(Online)(Del) 6239

IN THE HIGH COURT OF DELHI AT NEW DELHI
C. Hari Shankar, Om Prakash Shukla, JJ
TITAGARH RAIL SYSTEMS LIMITED – Appellant
Versus
RAILWAY BOARD MINISTRY OF RAILWAYS GOVERNMENT OF INDIA – Respondent
FAO(OS) (COMM)-103/2026

Important Points

Waiver of arbitrator ineligibility under Section 12(5) of the Arbitration and Conciliation Act, 1996, requires an express agreement in writing after disputes arise. It cannot be inferred from conduct, procedural participation, or the adoption of contractual procedures intended for waived cases.

Subject

Arbitration Law - Eligibility of Arbitrators

Act Referred

Arbitration & Conciliation Act, 1996: S.37, S.34, S.12(5), S.11(6), S.21, S.33, S.29B, S.29-A
Commercial Courts Act, 2015: S.13
Contract Act, 1872: S.9

Headnote

(A) Arbitration and Conciliation Act, 1996 - Section 12(5) and its Proviso - Ineligibility of certain persons to be appointed as arbitrators - Waiver of such ineligibility - Requirement of "express agreement in writing" subsequent to disputes having arisen - Conduct of parties, such as participating in proceedings, filing claims, or adopting a specific contractual procedure, cannot be construed as a waiver under the proviso. (Paras 25, 27, 28)

(B) Waiver - Meaning and scope - Intentional relinquishment of a known right - Must be a conscious and unequivocal expression of intent reduced to writing - Cannot be inferred by implication or conduct. (Para 25)

Facts of the case:
A contract for the supply of railway wagons resulted in disputes. The parties agreed to follow a "Fast Track Procedure" outlined in the contract, which permitted the appointment of serving government officers as arbitrators, provided the applicability of Section 12(5) of the 1996 Act was waived. A serving officer was appointed, and an award was passed. The award was challenged on the ground that the arbitrator was ineligible under Section 12(5) and that no express written waiver had been executed by the parties after the dispute arose.

Findings of Court:
The court found that there was no express agreement in writing between the parties to waive the applicability of Section 12(5). The adoption of a specific contractual procedure designed for cases where Section 12(5) is waived does not substitute for the statutory requirement of an express written agreement.

Issues: Whether the adoption of a contractual procedure provided for situations where Section 12(5) is waived, combined with the selection of an ineligible arbitrator from a panel, constitutes a valid waiver under the proviso to Section 12(5).

Ratio Decidendi: The proviso to Section 12(5) mandates an "express agreement in writing" to waive the ineligibility of an arbitrator. Such waiver must be a deliberate, informed, and unequivocal act executed after the dispute arises. Procedural participation or the invocation of a contractual mechanism does not satisfy this statutory requirement; the written waiver must be a prerequisite, and the following of the procedure cannot be read in reverse to imply a waiver. (Paras 27, 28)

Result: Appeals dismissed in limine.

Advocates:
For the Appellants/Petitioners: Akanksha Mehra, Tanay Agarwal, Shivam Bhimsaria, Abhiraj Choudhary, Mili Tomar, Rajshekhar Rao
For the Respondents: Sandeep Kumar Mahapatra, Mrinmayee Sahu, Amit Acharya, Tribhuvan, Abhimanyu, Anushka Sarraf, Vinay Kaushik

$~75 & 76 * IN THE HIGH COURT OF DELHI AT NEW DELHI + FAO(OS) (COMM) 103/2026, CM APPLs.24033-34/2026 TITAGARH RAIL SYSTEMS LIMITED .....Appellant Through: Ms. Akanksha Mehra, Mr. Tanay Agarwal, Mr. Shivam Bhimsaria, Mr.

Abhiraj Choudhary and Ms. Mili Tomar versus RAILWAY BOARD, MINISTRY OF RAILWAYS, GOVERNMENT OF INDIA .....Respondent Through: Mr. Sandeep Kumar Mahapatra, CGSC, Ms. Mrinmayee Sahu, Mr. Amit Acharya, GP, Mr. Tribhuvan, Mr. Abhimanyu and Ms. Anushka Sarraf, Advocates and Mr Vinay Kaushik Government Pleader + FAO(OS) (COMM) 104/2026, CM APPL. 24043/2026 TITAGARH RAIL SYSTEMS LIMITED .....Appellant Through: Mr. Rajshekhar Rao, Sr. Advocate with Ms. Akanksha Mehra, Mr. Tanay Agarwal, Mr. Shivam Bhimsaria, Mr. Abhiraj Choudhary and Ms. Mili Tomar, Advocates versus RAILWAY BOARD, MINISTRY OF RAILWAYS .....Respondent Through: Mr. Sandeep Kumar Mahapatra, CGSC, Ms. Mrinmayee Sahu, Mr. Amit Acharya, GP, Mr. Tribhuvan, Mr. Abhimanyu and Ms. Anushka Sarraf, Advocates and Mr Vinay Kaushik Government Pleader CORAM:

HON'BLE MR. JUSTICE C. HARI SHANKAR HON'BLE MR. JUSTICE OM PRAKASH SHUKLA JUDGMENT (ORAL)

% 13.04.2026 C. HARI SHANKAR, J.

A. The lis

1. These appeals, under Section 37 of the Arbitration & Conciliation Act, 1996, 1"the1996Act"hereinafter , assail a judgment and an order, both dated 26 February 2026, in OMP (Comm) 475/2024, 2RailwayBoardv.TitagarhRailSystemsLtd and OMP (Comm) 503/2024, 3RailwayBoardv.TitagarhRailSystemsLtd , rendered by a learned Single Judge of this Court. The principal judgment stands rendered in OMP (Comm) 475/2024, with the order in OMP (Comm) 503/2024 merely recording that the arbitral award, which formed subject matter of challenge in both OMPs, already stood set aside in OMP (Comm) 475/2025 and that, therefore, no separate orders were called for. The impugned judgment and order have, needless to say, been rendered under Section 34 of the 1996 Act. 2. The learned Single Judge has allowed the OMPs filed by the Respondent-Railway Board on the ground that the learned arbitrator, who had rendered the award forming subject matter of challenge, having been a serving employee of the Railway Board, his very appointment as an arbitrator was in the teeth of Section 12(5)⁴ read with the VII Schedule to the 1996 Act. Resultantly, the award rendered by the learned arbitrator has been held to be unsustainable, as the learned arbitrator was incompetent to arbitrate. In arriving at his conclusion, the learned Single Judge has placed exhaustive reliance on the recent decision of the Supreme Court in Bhadra International (India) (P) Ltd. v. Airport Authority of India, 52026SCCOnLineSC7

3. Aggrieved by the decision of the learned Single Judge, Titagarh Rail Systems Ltd, 6"TRSL"hereinafter has preferred the present appeals under Section 13 of the Commercial Courts Act, 2015 read with Section 37 of the 1996 Act.

4. We have heard Mr. Raj Shekhar Rao, learned Senior Counsel for TRSL and Mr. Sandeep Kumar Mahapatra, learned CGSC, at length.

B. The Issue

5. Mr. Raj Shekhar Rao does not dispute the fact that the learned arbitrator was facially ineligible to be appointed as an arbitrator in terms of the main body of Section 12(5) of the 1996 Act. His precise contention is that the facts of the present case attract the proviso to 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

SeventhScheduleshallbeineligibletobeappointedasanarbitrator:

Provided that parties may, subsequent to disputes having arisen between them, waive the applicabilityofthissub-sectionbyanexpressagreementinwriting.

Section 12(5), as the parties had, subsequent to the disputes arising between them, expressly waived the applicability of Section 12(5). To that extent, he submits that the decision in Bhadra International does not operate against the arbitral award or its legality. The learned Single Judge has,