Indian Kanoon - Search engine for Indian Law

(emphasis added)

22) In Bharat Broadband Network Ltd. (supra) two issues were involved before the Hon'ble Apex Court viz. (i) bar for a person appointing Arbitrator from raising the plea that the Arbitrator was incapable of arbitrating and (ii) the effect of the expression ' express agreement in writing' appearing in proviso to Section 12(5) of the Act. In case before the Apex Court, the Respondent therein invoked arbitration and called upon the Appellant to appoint an impartial arbitrator. In response, the Appellant therein appointed one Mr. Khan as the Arbitrator. Since the Apex Court in TRF Ltd. (supra) has ruled that a party cannot himself appoint an arbitrator, the Appellant sought withdrawal of Mr. Khan as Arbitrator. The Appellant filed application before Delhi High Court, which was dismissed holding that person appointing Arbitrator was estopped from challenging the appointment and that filing of Statement of Claim by him, without reservation, amounted to express agreement in writing and waiver of the applicability of Section 12(5) of the Act. However, the Apex Court in paragraph 15 of the Judgment held that the waiver under Section 12(5) of the Arbitration Act could only be by way of express agreement in writing. Though the Appellant itself had appointed arbitrator, and filed statement of claim before him, the Apex Court still held that the 23 December 2025 Megha 30_carbp_320_2024_fc.docx arbitrator was ineligible. The Apex Court thereafter dealt with Section 12(5) of the Arbitration Act and held that, unlike Section 4 envisaging waiver by conduct, Section 12(5) connotes an express agreement in writing. The Apex Court rejected the proposition that party, by conduct, can waive the right to object to the unilateral appointment of the arbitrator. The Apex Court further held mere filing of statement of claim by the Appellant did not amount to express agreement in writing. The Apex Court held in paragraphs 18 to 20 and 23 as under:

(emphasis added)





                              23 December 2025
 Megha                                                           30_carbp_320_2024_fc.docx



23)             Thus, in Bharat Broadband Network Ltd. (supra) the

Apex Court has held that even a party appointing ineligible Arbitrator can challenge the appointment. It is further held that mere act of making the appointment of an ineligible Arbitrator did not amount to agreement for waiver in writing. The Apex Court has further held that mere participation in arbitral proceedings by filing statement of claim /defence did not amount to express agreement in writing within the meaning of proviso to Section 12(5) of the Arbitration Act. The Apex Court further held that provisions of Sections 4, 7, 12(4), 13(2) and 16(2) of the Arbitration Act do not dilute the requirement of express agreement in writing under proviso to Section 12(5) of the Arbitration Act.

47) Lastly, in M/s. Satya Parkash and Brothers (P) Ltd. (supra) the Appellant therein had not objected to appointment of sole Arbitrator and plea of consent was raised on account of failure to raise any objection by the Appellant. The Delhi High Court has invalidated the Award despite non-raising of objection holding that the Award passed by unilaterally appointed Arbitrator, who is conflicted under Section 12(5) of the Arbitration Act, would be against public policy.

48) Thus, filing of counterclaim, participation in the arbitral proceedings without raising objection and giving consent for extension of mandate under Section 29A are held to be not constituting waiver of ineligibility of arbitration under Section 12(5) of the Arbitration Act. In my view, therefore, none of the factors sought to be urged by the Respondent for inferring consent on the part of the Petitioners can be 23 December 2025 Megha 30_carbp_320_2024_fc.docx treated as waiver of objection by express agreement in writing as per proviso to Section 12(5) of the Arbitration Act. So far as the failure on the part of the Petitioners to plead the ground of unilateral appointment of Arbitrator is concerned, the situation is covered by judgment of this Court in Naresh Kanayalal Rajwani and RIAK Insurance and Financial Services (supra) and of Delhi High Court in Mahavir Prasad Gupta and Sons (supra). As observed above, Judgment of Division Bench of this Court in Mr. R.B. Krishnani (supra) does not assist the case of the Respondent.

49) What remains now, is to deal with two judgments relied upon by Mr. Khan of learned Single Judge of this Court in Truly Pest Solution Private Limited and MPD Associates Pvt. Ltd. (supra). In Truly Pest Solution Private Limited (supra) the Claimant therein have themselves invoked arbitration clause knowing fully well that sole Arbitrator will be railway employee. Despite having three occasions to raise issue about Section 12(5) of the Arbitration Act, no objection was raised and the objection under Section 12(5) was raised only after passing of the Award. In the facts of that case learned Single Judge of this Court held that objection was an afterthought and was accordingly rejected. However, as observed above (i) invocation of arbitration clause by the aggrieved party (ii) filing of pleadings (statement of claim, statement of defence /counterclaim) by the aggrieved party and (iii) non-raising of any objection by the aggrieved party during arbitral proceedings are held to be not constituting waiver by Section 12(5) objection by way of an express agreement in writing. Therefore, in the present case as well, it is difficult to infer that there was any waiver by way of an express agreement in writing on the part of the Petitioners to 23 December 2025 Megha 30_carbp_320_2024_fc.docx unilateral appointment of the learned sole Arbitrator, who was conflicted under Section 12(5) of the Arbitration Act.