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8. The counsel for the petitioner contends that the impugned orders are erroneous, since the District Court erred by dismissing Ext.P6 application in O.P.(C) Nos.926 and Ext.P7 application in O.P.(C) No.1034 of 2024, based on a misapplication of this Court's decision in M/s Hedge Finance Pvt. Ltd. v. Vijish Joseph (2022 KHC 591), which solely addressed the validity of a unilateral arbitrator appointment by a disqualified Managing Director under Sections 12 of the Arbitration Act, 1996. The lower appellate Court also failed to realize that the parties to Ext.P1 had mutually agreed upon a specific procedure for arbitrator appointment in the event of a dispute and consequently, the ruling in Hedge Finance (supra) is inapplicable to the present matter.

9. It is submitted that Sec 12 of the Arbitration OPC 1034 & 926/24 2025:KER:30667 Act does not apply in this case since the Petitioner did not appoint or nominate any arbitrator to adjudicate the dispute between the parties. Therefore, neither the selection nor the choice of the arbitrator was dictated by any party to the agreement, thereby precluding the application of the disqualifications enumerated under the 5th and 7th schedule or Sec 12 of the Arbitration Act. Further, it was asserted that institutional arbitration under MCCI is conducted by an independent institution governed by its own procedural rules and hence, there is no basis for alleging bias, to the arbitrator's independent functioning. The counsel also contended that consent of the parties for arbitrator appointment is required, only in cases where the parties have not previously agreed upon a specific appointment procedure, prior to the dispute. Thus, Ext.Nos.P8 and P9 orders in O.P.(C) Nos.926 and 1034 respectively, are perverse and illegal and hence, be set aside. OPC 1034 & 926/24 2025:KER:30667

17. In the present case, Article 22 of the loan agreement stipulates that the sole arbitrator shall be nominated by the MCCI Arbitration, Mediation and Conciliation Centre (MAMC), an entity operated by the Madras Chamber of Commerce and Industry (MCCI). Thus, the arbitrator's nomination does not originate from either party. The petitioner requested the institution to make the nomination, and the nomination was subsequently carried out by this independent body, which adheres to its own rules for Arbitration and Conciliation. Consequently, this nomination cannot be construed as one prescribed by the petitioner. The court's judgment in Hedge Finance (supra) addressed a scenario where one party unilaterally nominated the arbitrator without the other party's concurrence or a prior agreement as OPC 1034 & 926/24 2025:KER:30667 contemplated under Section 12(5) or its proviso of the Arbitration Act.