DELHI HIGH COURT: AN AWARD ISSUED BY UNILATERALLY APPOINTED ARBITRATOR CAN BE CONTESTED FOR INVALIDITY OF APPOINTMENT, EVEN BY THE APPOINTING PARTY

The Delhi High Court in the case Telecommunication Consultants India Ltd v. Shivaa Trading observed and has held that an award passed by a unilaterally appointed arbitrator can be challenged which being on ground of invalidity of such appointment and consequent lack of jurisdiction even by the party who made such an appointment.

The bench headed by Justice Anup Jairam Bhambhani in the case observed and has held that a defect of jurisdiction can be challenged at any stage since it goes to the power of the tribunal to decide the dispute.

The bench held that mere participation in the arbitral proceedings cannot be deemed to be an 'express waiver' in terms of Section 12(5) of the Arbitration and Conciliation Act.

FACTS OF THE CASE:

The parties entered into an MOU dated September 10, 2007, wherein the respondent agreed to carry out certain works for the petitioner. Clause 19 of the MOU provided for resolution of dispute through arbitration, however, it conferred power on the petitioner to unilaterally appoint the arbitrator.

The dispute arose between the parties, resultantly, the petitioner invoked the arbitration clause and unilaterally appointed a sole arbitrator.

The arbitral tribunal decided the issue in favour of the respondent.

Aggrieved with the same, the petitioner challenged the award on ground of unilateral appointment of arbitrator.

THE PETITIONER MADE THE FOLLOWING SUBMISSIONS: