Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2026 Supreme(Online)(Del) 6481

IN THE HIGH COURT OF DELHI AT NEW DELHI
Avneesh Jhingan, J
PTC Techno Pvt. Ltd. – Appellant
Versus
Samsung India Electronics Pvt. Ltd. – Respondent
O.M.P. (COMM) 129/2019

Advocates:
For the Appellants/Petitioners: Tarun Diwan, Pyari
For the Respondents: Sudhir Nandrajog, Niraj Singh, Ankita Singh, Karteek

The unilateral appointment of an arbitrator by a party to the dispute is void ab initio. Any waiver of the arbitrator’s statutory ineligibility must be an express written agreement made after the dispute arises; mere participation in proceedings does not constitute a valid legal waiver.

Headnote:(A) Arbitration and Conciliation Act, 1996 - Sections 12(5), 14, 15, and 34 - Seventh Schedule - Unilateral appointment of arbitrator - Mandatory requirement - Express waiver - Public policy - An official of a party to a dispute is prohibited from appointing an arbitrator. Any unilateral appointment is void ab initio and renders the arbitral tribunal devoid of inherent jurisdiction. The mandate of an ineligible arbitrator stands automatically terminated. (Paras 8, 10, 17)

(B) The proviso to the governing statute mandates that any waiver of statutory ineligibility must be via an 'express agreement in writing' executed after the dispute has arisen. Mere participation in arbitral proceedings or conduct indicating acquiescence does not constitute a valid waiver. Objections regarding the inherent lack of jurisdiction due to unilateral appointment may be raised for the first time during the challenge to the award. (Paras 7.2, 8, 11, 13)

Facts of the case:
Commercial agreements regarding manufacturing equipment were terminated, leading to a dispute. The agreement contained a clause empowering a company official to appoint a sole arbitrator. An arbitrator was appointed accordingly. The challenging party participated in the proceedings but later challenged the award, contending that the appointment was unilaterally made and therefore void under the relevant statutory provisions.

Findings of Court:
The court held that the unilateral appointment of an arbitrator by a party's official is inherently invalid. The requirement for an express written agreement to waive the statutory ineligibility is strict; the court cannot infer waiver from conduct or participation in the proceedings. Because no such written waiver occurred, the tribunal was improperly constituted, rendering the resulting award a nullity and against public policy.

Issues: The main issues addressed were whether the unilateral appointment of an arbitrator by a company official is valid under the law, and whether the objection to such appointment can be raised for the first time during a challenge to the award.

Ratio Decidendi: Statutory provisions prohibiting the appointment of an arbitrator by a party's official are mandatory and go to the root of jurisdiction. Waiver of such ineligibility must be an unequivocal, express written agreement. Lacking this, an award passed by such an arbitrator is non-est and void ab initio, allowing for judicial intervention at the stage of the challenge to the award.

Result: Petition allowed; impugned award set aside.

Table of Content
1. procedural context and factual history of the arbitration agreement (Para 1 , 2 , 3 , 4)
2. arguments surrounding section 12(5) waiver and conduct (Para 5 , 6)
3. analysis of section 12(5) requirements for express written waiver (Para 7 , 8 , 9 , 10 , 11 , 12 , 13 , 14 , 15 , 16)
4. unilateral appointments by interested parties are void ab initio (Para 17 , 18)

AVNEESH JHINGAN, J. (ORAL)

1. This matter is taken up today as 03.03.2026 was declared holiday vide Notification No. 64/G-4/Gen1.-I/DHC dated 27.02.2026.

2. This petition is filed under Section 34 of the Arbitration and Conciliation Act, 1996 (for short „the Act‟) challenging the arbitral award dated 17.11.2018.

3. The short controversy involved is whether the appointment of the arbitrator by the Vice President of the respondent company is in violation of the amended Section 12(5) of the Act.

4. The brief facts are that the parties to the lis entered into a Mould Agreement dated 01.06.2009 (hereinafter referred to as „MA‟) and two Purchase and Sale Agreements dated 26.11.2009 and 20.06.2013. As
per the MA, the respondent was to supply moulds for the manufacturing of parts to be carried out by the petitioner. The agreements were terminated and disputes arose between the parties with regard to the return of the moulds. Clause 18 of the MA reproduced below provided for dispute resolution through arbitration. On 25.04.2017, a sole arbitrator was appointed by the Vice President of the respondent company.

“18. Any dispute or differences whatsoever arising between the Parties out of relating to the construction, meaning or operation or effect of this Agreement shall, unless resolved amicably, be settled referring the matter to Arbitration of a Sole Arbitrator to be appointed by the Vice President of Samsung under the Arbitration and Conciliation Act 1996. The venue of Arbitration shall be at New Delhi and the Courts of Delhi shall have the exclusive jurisdiction under this Agreement.”

4.1 An application under Section 9 of the Act was filed by the respondent and the parties were directed to maintain status quo. During the pendency of the application, the respondent appointed the arbitrator. The application was disposed of by order dated 20.07.2017, which is reproduced below:

“The learned counsel for the petitioner states that Mr. Justice Sunil Ambwani (Retd.) has been appointed as a sole arbitrator to adjudicate the disputes between the parties.
The learned counsel for the parties agree that without prejudice to their rights and contentions and objections, the present issue may be heard by the learned sole arbitrator by exercising powers under Section 17 of the Act.
Parties may accordingly file appropriate pleadings before the learned arbitrator who may deal with the same as per law. Interim order passed by this court on 03.05.2017 shall continue to operate till disposal of the application that will be filed by the petitioner under Section 17 of the Act.
The learned arbitrator is free to modify or vacate the order as per law.
The petition stands disposed of.”

5. Learned counsel for the petitioner contends that the appointment of the arbitrator is in violation of Section 12(5) read with Seventh Schedule of the Act and relies upon the decision of the Supreme Court in Bhadra International (India) Pvt. Ltd. & Ors. v. Airports Authority of India, 2026 INSC 6.

6. Learned senior counsel for the respondent contends that the appointment of arbitrator was never objected to by the petitioner. Contention is that from the perusal of the order dated 20.07.2017 of this Court, it is evident that the petitioner had in writing given consent for waiver of Section 12(5) of the Act. The submission is that the petitioner filed three applications under Sections 12, 14 & 15 and 16 of the Act but the objection of violation of Section 12(5) of the Act was never raised.

6.1 Reliance is on the decision of the Supreme Court in Quippo Construction Equipment Ltd. v. Janardan Nirman Pvt. Ltd. (2020)

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2026 Supreme(Online)(Del) 6481

IN THE HIGH COURT OF DELHI AT NEW DELHIAvneesh Jhingan, JPTC Techno Pvt. Ltd. – AppellantVersusSamsung India Electronics Pvt. Ltd. – RespondentO.M.P. (COMM) 129/2019

The unilateral appointment of an arbitrator by a party to the dispute is void ab initio. Any waiver of the arbitrator’s statutory ineligibility must be an express written agreement made after the dispute arises; mere participation in proceedings does not constitute a valid legal waiver.

Cases Referred (2)

IN THE HIGH COURT OF DELHI AT NEW DELHI
Avneesh Jhingan, J
PTC Techno Pvt. Ltd. – Appellant
Versus
Samsung India Electronics Pvt. Ltd. – Respondent
O.M.P. (COMM) 129/2019