ROHINI HELIPORT LIMITED vs CLOUDATIX BIZ INDIA VENTURE PVT LTD

Headnote Court Copy Facts Arguments Court observation Judicial Analysis Case Map Category Hierarchy Table of Content

2026 Supreme(Online)(Del) 16839

IN THE HIGH COURT OF DELHI AT NEW DELHI
C. Hari Shankar, Amit Mahajan, JJ
ROHINI HELIPORT LIMITED – Appellant
Versus
CLOUDATIX BIZ INDIA VENTURE PVT LTD – Respondent
FAO (COMM)-225/2026

Important Points

Waiver of an arbitrator's ineligibility under Section 12(5) of the Arbitration and Conciliation Act, 1996, requires a clear, unequivocal, express agreement in writing executed after the dispute arises; it cannot be inferred from conduct, tacit acceptance, or procedural participation in the arbitral proceedings.

Subject

Arbitration Law - Arbitrator Eligibility and Appointment

Act Referred

Arbitration and Conciliation Act, 1996: S.34, S.12(5), S.eventh Schedule, S.29A, S.4, S.7, S.13(2), S.16(2), S.14, S.15, S.18, S.21, S.33
Contract Act, 1872: S.9

Headnote

(A) Arbitration and Conciliation Act, 1996 - Section 12(5) and Seventh Schedule - Appointment of Arbitrator - Unilateral appointment - The appointment of an arbitrator by a person who is statutorily ineligible under the Seventh Schedule (such as a director of one of the parties) is void ab initio. Any such unilateral appointment is unenforceable in law as it violates the basic tenet of mutual confidence and impartiality in arbitration. (Paras 13-15)

(B) Section 12(5) Proviso - Waiver of ineligibility - "Express agreement in writing" - A waiver of the bar against an ineligible arbitrator must be made through a clear, unequivocal, and written agreement executed after the dispute has arisen. Such waiver cannot be inferred by implication, conduct, or procedural participation, including the recording of "no objection" in procedural orders, submission of statements of claim, or joint requests to extend the mandate. The requirement of an express agreement in writing ensures that parties are not divested of their right to object inadvertently or by procedural happenstance. (Paras 75-85, 96)

(C) Jurisdiction and Mandate - An arbitrator who is ineligible by virtue of Section 12(5) read with the Seventh Schedule lacks jurisdiction, and their mandate is automatically terminated. An objection to an inherent lack of jurisdiction can be raised at any stage of the proceedings, and an award passed by such an arbitrator can be set aside. (Para 123(iv)-(v))

Facts of the case:
An agreement for operating a commercial facility led to a dispute after operations were discontinued due to governmental intervention. A sole arbitrator was unilaterally appointed by the managing director of one of the parties. Following the arbitral award, the award was challenged on the ground that the appointment was in violation of the statutory bar against ineligible persons acting as arbitrators. The lower court set aside the award, holding the appointment to be hit by Section 12(5) read with the Seventh Schedule.

Findings of Court:
The court found that there was no express agreement in writing between the parties to waive the ineligibility of the arbitrator after the dispute had arisen. Participation in the arbitral proceedings and the recording of consent in a procedural order do not constitute a valid waiver under the proviso to Section 12(5).

Issues: Whether the participation of the parties in the arbitral proceedings and the recording of "no objection" in a procedural order amount to an "express agreement in writing" to waive the arbitrator's ineligibility under the proviso to Section 12(5) of the Arbitration and Conciliation Act, 1996.

Ratio Decidendi: The expression "express agreement in writing" denotes a deliberate and informed act in words and cannot be inferred from conduct or tacit acceptance. To overcome a statutory restriction imposed by law, the waiver must be a clear and unequivocal written manifestation of intent made after the dispute has arisen. Procedural participation does not supply the necessary consent to validate a unilateral appointment by an ineligible person.

Result: Appeal dismissed.

Legal Category Hierarchy

Advocates:
For the Appellants/Petitioners: Sunil Mutreja, Aashima Choubey, Pratiksha Dhanik

##PAGE1##

$~87 * IN THE HIGH COURT OF DELHI AT NEW DELHI

# CNR No. DLHC010362832026 + FAO (COMM) 225/2026 & CM APPL. 52219/2026, CM

APPL. 52220/2026, CM APPL. 52221/2026

ROHINI HELIPORT LIMITED .....Appellant Through: Mr. Sunil Mutreja, Ms. Aashima Choubey, Ms. Pratiksha Dhanik,

Advs. versus

CLOUDATIX BIZ INDIA VENTURE PVT LTD ...Respondent Through:

CORAM:

HON’BLE MR. JUSTICE C. HARI SHANKAR HON’BLE MR. JUSTICE AMIT MAHAJAN

JUDGMENT (ORAL)

% 10.08.2026 C. HARI SHANKAR, J.

1. This case is fully covered by the judgment of the Supreme Court in Bhadra International (India) (P) Ltd v. Airports Authority

of India¹.

2. We do not, therefore, deem it necessary to burden this order by any detailed reference to facts. A brief recital would, therefore,

suffice.

3. An agreement dated 13 January 2017 was executed between the

1 2026 SCC OnLine SC 7, referred to, hereinafter, as “Bhadra”.

Signature Not Verified

Digitally Signed By:AFJIATO (COMM) 225/2026 Page 1 of 16

KUMAR Signing Date:18.08.2026

15:51:50

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appellant Rohini Heliport Ltd and the respondent Cloudatix Biz India Venture Pvt. Ltd. for operating a snack bar at a Heliport at Rohini. Operations in the Heliport were discontinued owing to governmental intervention. This resulted in discontinuation of the services at the snack bar as well. Entry of the staff of the respondent into the Heliport was also blocked. The respondent, therefore, discontinued payment of lease rental, resulting in a termination notice being issued

by the appellant to the respondent on 4 October 2019.

4. As a result, the dispute arose between the appellant and the respondent.

5. Page 8 of the agreement between the appellant and the respondent provided for resolution of disputes by

conciliation/arbitration and read as under:

“CONCILIATION/ARBITRATION “I. If any dispute(s) or difference(s) of any kind whatsoever arise, between the contractor and PHL, both the parties hereto shall negotiate with a view to its amicable resolution and settlement

through a committee appointed by CMD, PHL.

II. In the event, no amicable resolution or settlement is reached between the parties within 15 days after receipt of notice by one party, then dispute or differences are detailed above shall be referred to and settled by Sole Arbitrator to be appointed by CMD

(PHL).”

6. As an attempt at conciliation did not succeed, the Chairman and Managing Director of the appellant, by notice dated 8 June 2021, appointed one Mohan Sharma as the Sole Arbitrator to arbitrate on the

Signature Not Verified Digitally Signed By:AFJIATO (COMM) 225/2026 Page 2 of 16 KUMAR

Signing Date:18.08.2026

15:51:50

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disputes between the parties.

7. The arbitration culminated in an award dated 24 July 2023.

8. The respondent challenged the award under Section 34 of the Arbitration and Conciliation Act, 1996, “the 1996 Act”, hereinafter, before the learned District Judge (Commercial Court-2), South District, Saket Courts, New

Delhi, “learned Commercial Court”, hereinafter by way of OMP (Comm) 10/2024.

9. The OMP was contested by the respondent inter alia on the ground that the appointment of the learned Arbitrator was in the teeth of Section 12(5)⁴ of the 1996 Act and that, therefore, the arbitration was null and void ab initio. The arbitral award was, therefore,

unenforceable in law.

10. The learned Commercial Court has, by order dated 16 May 2026, accepted this submission, following the judgment of the Supreme Court in Bhadra. As a result, the learned Commercial Court has held the appointment of the learned Sole Arbitrator as being hit by Section 12(5) read with the Seventh Schedule to the 1996 Act and has,

therefore, set aside the award.

11. Before the learned Commercial Court, as well as before us, the

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 p