Delhi High Court – Orders
M/S Braithwaite And Co. Ltd. & Anr vs Union Of India & Ors on 23 July, 2025
Author: Subramonium Prasad
Bench: Subramonium Prasad
$~94
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ O.M.P. (T) (COMM.) 64/2025
M/S BRAITHWAITE AND CO. LTD. & ANR. ....Petitioner
Through: Ms. Amrita Panda, Mr. Ruchir Joshi,
Advocates
versus
UNION OF INDIA & ORS. .....Respondents
Through: Mr. Nishant Gautam, CGSC with
Mr.Prithviraj Dey, Mr. Shaurya Mani
Pandey, Advocates for R-1 & R-3
Mr. Rajeev Sharma, Adv for
Respondent No. 2
CORAM:
HON'BLE MR. JUSTICE SUBRAMONIUM PRASAD
ORDER
% 23.07.2025
1. This is a petition under Section 14 of the Arbitration & Conciliation
Act, 1996 for termination of mandate of the Arbitral Tribunal constituted by
the Respondent.
2. It is the case of the Petitioner that the Arbitral Tribunal has been
constituted by the Respondent contrary to the law laid down by the Apex
Court in Central Organisation for Railway Electrification v. ECI SPIC SMO
MCML (JV) A Joint Venture Co., (2025) 4 SCC 641 and the judgment
passed by a Division Bench of this Court in Mahavir Prasad Gupta & Sons
v. Govt. of NCT of Delhi, 2025 SCC OnLine Del 4241. The relevant
portions of the judgment passed by this Court in Mahavir Prasad (supra)
reads as under:-
“32. It is a well-settled position in law that unilateral
O.M.P. (T) (COMM.) 64/2025 Page 1 of 5
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appointment of an arbitrator by one of the parties to
the dispute is impermissible and invalid being contrary
to the scheme of the Act. Section 12(5) of the Act read
with the Seventh Schedule of the Act lays down that
appointment of any person as an arbitrator that gives
rise to justifiable doubts as their independence or
impartiality, is ineligible to act as an arbitrator. When
the power to appoint an arbitrator is exercised
unilaterally, such an appointment is null and void and
an award rendered by an ineligible arbitrator would
be unenforceable.
xxx
36. The decision of the Constitution Bench of the
Supreme Court in CORE (supra), while upholding the
judgments of TRF (supra) and Perkins (supra) has
conclusively held that a clause allowing unilateral
appointment of an arbitrator gives justifiable doubts as
to the independence and impartiality of the sole
arbitrator. The Supreme Court further held that
unilateral appointment clauses in public private
contracts are violative of Article 14 of the Constitution
of India:
“129. Equal treatment of parties at the stage of
appointment of an arbitrator ensures impartiality
during the arbitral proceedings. A clause that allows
one party to unilaterally appoint a sole arbitrator is
exclusive and hinders equal participation of the
other party in the appointment process of
arbitrators. Further, arbitration is a quasi-judicial
and adjudicative process where both parties ought
to be treated equally and given an equal opportunity
to persuade the decision-maker of the merits of the
case. An arbitral process where one party or its
proxy has the power to unilaterally decide who will
adjudicate on a dispute is fundamentally contrary toO.M.P. (T) (COMM.) 64/2025 Page 2 of 5
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the adjudicatory function of arbitral tribunals.
xxxxxx
168. In the present reference, we have upheld the
decisions of this Court in TRF (supra) and Perkins
(supra) which dealt with situations dealing with sole
arbitrators. Thus, TRF (supra) and Perkins (supra)
have held the field for years now. However, we have
disagreed with Voestalpine (supra) and CORE
(supra) which dealt with the appointment of a three-
member arbitral tribunal. We are aware of the fact
that giving retrospective effect to the law laid down
in the present case may possibly lead to the
nullification of innumerable completed and ongoing
arbitration proceedings involving three-member
tribunals. This will disturb the commercial bargains
entered into by both the government and private
entities. Therefore, we hold that the law laid down in
the present reference will apply prospectively to
arbitrator appointments to be made after the date of
this judgment. This direction only applies to three-
member tribunals.
xxxxxx
J. Conclusion
169. In view of the above discussion, we conclude
that:
a. The principle of equal treatment of parties applies
at all stages of arbitration proceedings, including
the stage of appointment of arbitrators;
b. The Arbitration Act does not prohibit PSUs from
empanelling potential arbitrators. However, an
arbitration clause cannot mandate the other party toO.M.P. (T) (COMM.) 64/2025 Page 3 of 5
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select its arbitrator from the panel curated by PSUs;
c. A clause that allows one party to unilaterally
appoint a sole arbitrator gives rise to justifiable
doubts as to the independence and impartiality of
the arbitrator. Further, such a unilateral clause is
exclusive and hinders equal participation of the
other party in the appointment process of
arbitrators;
d. In the appointment of a three-member panel,
mandating the other party to select its arbitrator
from a curated panel of potential arbitrators is
against the principle of equal treatment of parties. In
this situation, there is no effective counterbalance
because parties do not participate equally in the
process of appointing arbitrators. The process of
appointing arbitrators in CORE (supra) is unequal
and prejudiced in favour of the Railways;
e. Unilateral appointment clauses in public-private
contracts are violative of Article 14 of the
Constitution;
f. The principle of express waiver contained under
the proviso to Section 12(5) also applies to
situations where the parties seek to waive the
allegation of bias against an arbitrator appointed
unilaterally by one of the parties. After the disputes
have arisen, the parties can determine whether there
is a necessity to waive the nemo judex rule; and g.
The law laid down in the present reference will
apply prospectively to arbitrator appointments to be
made after the date of this judgment. This direction
applies to three-member tribunals.”
37. Hence, a unilateral appointment of the sole
arbitrator or the presiding arbitrator by a party to theO.M.P. (T) (COMM.) 64/2025 Page 4 of 5
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arbitrations seated in India is strictly prohibited and
considered as null and void since its very inception.
Resultantly, any proceedings conducted before such
unilaterally appointed Arbitral Tribunal are also
nullity and cannot result into an enforceable award.
Any award passed by the unilaterally appointed
Arbitral Tribunal is against public policy of India and
can be set aside under Section 34 of the Act and/or
refused to be enforced under Section 36 of the Act.”
3. Learned Counsel for the Union of India appears on advance notice.
4. Further proceedings before the Arbitral Tribunal have already been
stayed by this Court vide Order dated 29.04.2025 passed in ARB.P.
561/2025, which is a petition under Section 11 of the Arbitration &
Conciliation Act.
5. In view of the above, since the Arbitral Tribunal has been constituted
contrary to the law laid down by the Apex Court, the mandate of the Arbitral
Tribunal stands terminated.
6. The petition is disposed of along with pending application(s), if any.
SUBRAMONIUM PRASAD, J
JULY 23, 2025
hsk
O.M.P. (T) (COMM.) 64/2025 Page 5 of 5
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