Introduction
Indian arbitration law has over the course of the last decade carefully examined the practice of unilateral appointment of an arbitrator. This analysis culminated in the Hon’ble Supreme Court’s Constitution Bench ruling in Central Organisation for Railway Electrification v. ECI-SPIC-SMO-MCML (JV)[i] (“CORE-II”); this ruling gave the answer to the headline question – “whether a unilateral appointment clause in an arbitration agreement is valid”. The answer was a relatively clear position: unilateral appointment mechanisms that offend the principle of equality in the constitution of the tribunal cannot be sustained; separately, Section 12(5) renders persons falling within the Seventh Schedule statutorily ineligible, subject only to the express written waiver contemplated by its proviso. The doctrinal foundations of the answer to this question had been already laid by the Court in Bharat Broadband Network Ltd. v. United Telecom Ltd.[ii] (“Bharat Broadband”), which is particularly significant for its view on another peculiar scenario vis-a-vis unilateral appointments: what happens when the appointing party itself challenges the appointment of an arbitrator? The Court put an end to the ambiguity surrounding the narrower question of whether the appointing party’s own appointment and participation, by themselves, could preclude a subsequent objection. The string of decisions running from Bharat Broadband to Supreme Court’s recent ruling in Bhadra International (India) Pvt. Ltd. v. Airports Authority of India[iii] (“Bhadra International”), delivered in January 2026, has quietly built an answer and it goes against the grain. The right to object survives the act of appointing and only a specific, informed and written waiver can extinguish this right.
This position has been reaffirmed even more starkly by Delhi High Court in Mahavir Prasad Gupta & Sons v. Government of NCT of Delhi[iv] (“Mahavir Prasad Gupta”), which expressly held that even the party making the appointment unilaterally could challenge it, in the absence of an express written waiver. This principle has been consolidated through its reiteration in subsequent decisions of the Delhi High Court; most notably in RITES Ltd. v. Apex Construction Company[v] and Titagarh Rail Systems Ltd. v. Railways Board, Ministry of Railways[vi] (“Titagarh”). Even the Bombay High Court has affirmed this view through its judgment in Traviera Silk Mills Pvt. Ltd. v. Toto Toya Spin Pvt. Ltd.[vii] (“Traviera Silk Mills”).
The legal position surrounding challenge to unilateral appointment and subsequent setting aside of award has, therefore, become increasingly consistent: allowing challenge at any stage of proceeding, regardless of whether the party is appointing party or not. But this raises a more fundamental question with respect to the strict statutory interpretation of Section 12(5): what happens when the right to object is exercised strategically?
The Problem Created by Unilateral Appointment
The controversy is rooted in a straightforward proposition – a party should not possess disproportionate control over the constitution of the tribunal, when it is itself a party to the dispute. In CORE-II, the Supreme Court’s five-judge bench delivered a verdict holding that a clause allowing one party to unilaterally curate the panel from which an arbitrator shall ultimately be appointed offends the principles of equality of parties, mandated under Section 18 of the Arbitration and Conciliation Act, 1996[viii] (“A&C Act”), and due-process guarantee under Article 14 of the Constitution[ix]. The majority opinion treated arbitration as a quasi-judicial function; the tribunal’s independence cannot be compromised at the very inception of the arbitration process, i.e., the appointment of arbitrator, without undermining the legitimacy of the adjudicatory process. Thus, the concern surrounding unilateral appointments is not merely one of possibility of arbitrator’s bias.
Notably, the Court preserved a narrow but significant withdrawal method: the proviso to Section 12(5) of the A&C Act allows parties to expressly waive an arbitrator’s disqualification under the Seventh Schedule of the Act (disqualification due to arbitrator’s relationship with the parties or counsel), only after a dispute under the arbitration agreement has actually arisen. Thisprovision might be easily overlooked in the broader backdrop of the CORE-II judgment; however, it is the hinge upon which the entire question of “express written waiver” objection rests. Ordinarily, this proviso is uncontentious; however, complications arise when the party responsible for the unilateral appointment of arbitrator subsequently challenges the appointment on that very ground. On the face of it, this appears to be paradoxical: a party which chose the arbitrator would ordinarily be expected to stand by their choice. Further, allowing the appointing party to challenge such an appointment after an adverse award would create an opportunity to leverage this statutory protection as a strategic tool.
Yet, the converse position is equally fraught with problems. If the law were to hold that making appointments unilaterally would forego a later challenge, an otherwise ineligible tribunal could continue merely because the appointing party did not raise an objection. Thus, it would allow an appointment that is statutorily impermissible to become insulated from challenge simply by virtue of who made it.
The question here is whether statutory invalidity should be prioritised absolutely when the subsequent conduct of appointing party reveals strategic behaviour. CORE-II settled the invalidity of unilateral appointment mechanisms; it did not address the consequences of a party’s subsequent conduct after an invalid unilateral appointment has been made.
Bharat Broadband: Necessary Protection or Unintended Incentive?
The doctrinal groundwork for this principle had already been laid before CORE-II came into the picture, through Supreme Court’s 2019 decision in Bharat Broadband. In this case, the appellant company’s own Managing Director (“MD”) had nominated a sole arbitrator under the arbitration clause executed between the parties. Notably, the appointment was made at a date after the enactment of Section 12(5) and the Seventh Schedule of the A&C Act but pre-dated the judgment of the Supreme Court in TRF Ltd. v. Energo Engineering Projects Ltd.[x] (“TRF Ltd.”), wherein the court had held that a person statutorily ineligible to act as arbitrator cannot appoint one either – the appointment is void ab initio. Since the MD was himself statutorily disqualified, the authority to nominate another arbitrator was consequently also rendered invalid. Since the judgment had the authority of law, appointments of arbitrators made prior to the date of judgment were not saved from the effect of said pronouncement.
Upon becoming aware of the de jure ineligibilityand the consequential void appointment, the MD, on behalf of the appellant, moved an application before the Arbitrator so appointed which was rejected by the Arbitrator. The appellant approached the Delhi High Court, which decided that the appellant was estopped; having made the appointment and participated in proceedings, it could not turn around and challenge it. The appellant eventually moved a petition before the Apex court on grounds of the de jure ineligibility of the Arbitrator to continue in the role. The Supreme Court reversed the decision of the Delhi High Court, holding that Section 12(5) operates as a non-obstante provision that voids the appointment by operation of law the moment the arbitrator falls within a Seventh Schedule category – regardless of who the appointing party is or how long the party participated in the arbitration proceeding before objecting. Through the Bharat Broadband judgment, the Court effectively separated the right to object to the appointment of arbitrator under Section 12(5) from the identity of the objector. By doing so, the Supreme Court replaced the conventional doctrine of estoppel with a stricter and definitive understanding of what counts as a waiver.
But the Court in Bharat Broadband did not have to interact with the more complex aspect of the problem. The appointment preceded the TRF Ltd. judgment, and the legal consequence of the MD’s ineligibility was not authoritatively clarified, at that time. Upon becoming aware of the defect, the appellant itself sought to terminate the arbitrator’s mandate, thus, here the conduct of the appointing party makes it clear that they came with clean hands, to cure a legal defect that could negate the entire proceeding. It therefore does not necessarily answer the harder case of a party that knowingly creates or accepts a defective tribunal, participates with knowledge of the defect, and reserves the objection until the outcome becomes adverse. The more troubling scenario is when the appointing party knows the defect and nevertheless proceeds with the arbitration, reserving the objection only for the eventuality that the award is not in their favour. This changes the nature of the question from one of statutory interpretation into one of equity and incentives.
The Problem of Strategic Delay and “Miscreant Party”
The concern of parties intentionally leveraging the proviso under Section 12(5) as a tool of strategic delay is not hypothetical. The Supreme Court, in Paragraph 97 of the Bhadra International judgment, itself recognised this possibility of what the Court described as “miscreant party” participating in arbitration, despite knowledge of arbitrator’s de jure ineligibility and subsequently challenging the award after an adverse outcome. The Court nevertheless maintained the requirement of an express waiver under Section 12(5). This approach admittedly has considerable merit; tribunal independence is one of the core principles of arbitration and natural justice; it cannot be defeated merely because of the party’s participation in proceedings. But undeniably, this rule creates a potential asymmetry. It protects a party’s right to objection where it genuinely objects to the capacity under which the tribunal is operating. At the same time, a party can deliberately withhold the objection, participate fully and only act upon the objection if the award turns out to be unfavourable. This asymmetry may reward the conduct the Supreme Court itself identified as problematic. The distinction between these two scenarios is important specifically for this reason. The present doctrine does not sufficiently provide a clear mechanism to draw such a distinction.
Equitable Consideration in Allowing an Appointer to Become an Objector
The appointing party’s position is not legally privileged over the non-appointing party. Both possess the statutory right to object. The distinction, on the other hand, is equitable and factual. A non-appointing party that challenges an arbitrator may do it on the grounds that the tribunal was imposed upon it and that its participation should not deprive it of the statutory protection of an independent tribunal.
The position of the appointing party is different. Where a party itself selected the arbitrator, participated in proceedings before that arbitrator and only subsequently invokes the invalidity of its own appointment, its conduct raises an additional question of consistency. The central concern can be simply put – a party which unilaterally appoints an arbitrator may potentially have two opportunities to win: it may prevail before the arbitrator it selected, or, if it does not prevail before the arbitrator, it may challenge the award on the basis that the arbitrator it selected was ineligible. It creates an incentive to stay silent. Further, why should a party challenging an ordinary ground of arbitrator bias be required to act within 15 days[xi], while a party challenging a tribunal on the basis of unilateral appointment, a defect it created itself, can potentially wait until the enforcement stage. This concern is particularly illustrated in Titagarh, where the appointing party itself participated in the arbitration and raised an objection under Section 12(5) only after the award was passed, seeking setting aside of award by way of a Section 34[xii] application. Although the Delhi High Court permitted the challenge given the absence of an express written waiver, the Court expressly acknowledged the party’s conduct, including its decision to “wait for outcome of arbitration”, and nevertheless held that “the law has to take its own course irrespective of the conduct adopted by the Railways,” also echoing the concerns recognised by the Supreme Court itself in Bhadra International. Similarly, in Airports Authority of India v. Ahluwalia Contracts India Ltd.[xiii] (“Ahluwalia Contracts”), the Delhi High Court while reaffirming that the appointing party could challenge its own unilateral appointment, expressly acknowledged that such a position “appears disingenuous,” but nevertheless held that the tribunal’s inherent lack of jurisdiction could not be cured by the appointing party’s conduct. Therefore, the issue is not just that the appointing party has an exclusive strategic weapon. Rather, it is that the statutory framework may permit either party to preserve an objection, while the appointing party’s position raises an additional equitable concern because it is challenging a tribunal whose constitution it itself initiated. This creates the possibility of a “heads I win, tails the arbitration is void” incentive. Such an outcome sits uneasily with arbitration’s fundamental promise of finality, efficiency and certainty.
Towards a More Equitable Approach
The solution should not be to treat participation as automatic waiver; this would undermine the statutory scheme of protection under Section 12(5). Nor would automatically estopping the appointing party from challenging an ineligible tribunal provide an adequate answer, as this could allow an invalid appointment to survive.
A more nuanced approach is possible.
The risk of treating participation loosely as waiver is not hypothetical. In McLeod Russel India Ltd. v. Aditya Birla Finance Ltd.,[xiv] a single judge of the Calcutta High Court departed from the line of authority represented by TRF, deciding that pleadings filed by the petitioners in the arbitration itself, coupled with their prolonged participation, amounted to an express written waiver under the proviso to Section 12(5). The decision has since been criticised as difficult to reconcile with the statute’s strict threshold for an express, written and post-dispute waiver, and therefore, sits uneasily with the position later taken in Bhadra International; that conduct, however acquiescent, cannot itself satisfy the proviso. The decision is nevertheless useful for what it attempted: softening the express-writing requirement precisely in cases where a party’s conduct looks like an unequivocal, informed acceptance of the tribunal. The better response would be not to relax the statutory requirement, as this judgment effectively did, rather, to make the assessment of whether an express written waiver in fact exists. Similarly in Arjun Mall Retail Holdings (P) Ltd. v. Gunocen Inc.[xv], albeit through a different route, the division-bench of Delhi High Court held that a challenge is untenable where the objecting party, despite knowledge of unilateral appointment: failed to pursue an alternative appointment under Section 11(6), did not participate in the arbitral proceedings and ultimately only raised the objection after an award was rendered. The Court, here, specifically characterised the party as having remained a “mute spectator” and challenged the appointment only after “losing the battle in arbitral proceedings.” While this case does not concern an appointing party nor does it constitute an authority on Section 12(5) waiver, it does illustrate the competing judicial concerns of procedural diligence and arbitral finality. These decisions put forward the idea that the statutory requirement of express written waiver should not be diluted, but neither should its application be mechanical or indiscriminately done, without regard to circumstances in which objection is preserved and subsequently invoked. Bharat Broadband involved a materially different factual context where the appellant challenged the appointment promptly upon learning of legal position clarified in TRF as the appointment pre-dated TRF judgment. Further, Bhadra International, similarly strengthens the position that waiver cannot be inferred from participation alone. The solution, therefore, lies not in introducing a principle of waiver by conduct, but to adopt a more holistic and fact-oriented approach to statutory waiver itself. Such an approach would require courts to draw a distinction between mere participation, which cannot by itself qualify as a waiver, and conduct that demonstrates a deliberate and informed decision to relinquish the objection. For determining whether the statutory threshold has been met, courts should take into consideration the party’s knowledge of the defect, affirmative written representations, the nature and duration of the party’s participation and whether the opposing party’s conduct was consistent with their representation, the timing of the objection and whether the challenge to appointment came in light of an adverse outcome. Where these factors signal a conscious attempt to reserve the challenge as a contingency, equitable considerations such as consistency of conduct, good faith and ‘unclean hands’ should inform the court’s assessment of whether the party has genuinely and consciously relinquished the objection. Conversely, where a party objects to the defect at the earliest possible opportunity, statutory protection of Section 12(5) proviso should remain fully available. This approach would preserve the mandatory nature of Section 12(5) without allowing its strict waiver requirement to become an absolute procedural shield against the consequence of deliberate and inequitable conduct. Therefore, the objective is to strike a narrower balance: not to validate an otherwise ineligible tribunal through participation, but to prevent the statutory protection against such a tribunal from being leveraged as a strategic tool.
Conclusion
The law is now substantially clear that an appointing party is not precluded from challenging an otherwise invalidly constituted tribunal on grounds of unilateral appointment, simply by the virtue of it being the appointing party. The hurdle lies in the form of strict and indiscriminate application of express-waiver requirement, as acknowledged by courts themselves in Bhadra International and Ahluwalia Contracts. While Bharat Broadband rightly preserves the express-waiver clause, its factual matrix did not necessarily justify treating every subsequent case of deliberate participation and delayed objection identically. A more appropriate stance is therefore not to replace the statutory requirement of express written waiver with waiver by conduct, but to transform the interpretation of this waiver. A holistic and fact-specific reading of such a provision should carry a greater weight, relying upon various considerations as to conduct, consistency and intention. This would preserve the fundamental requirement of an independent tribunal without allowing Section 12(5) to become a means of strategically defeating an arbitral process that a party had previously chosen to pursue.
[i] Central Organisation for Railway Electrification v. M/s ECI SPIC SMO MCML (JV), (2024) INSC 85.
[ii] Bharat Broadband Network Limited v. United Telecoms Limited, (2019) 5 SCC 755.
[iii] M/s Bhadra International (India) Pvt. Ltd. v. Airports Authority of India, (2026) SCC OnLine SC 7.
[v] RITES Ltd. Through its General Manager v. Apex Construction Company, 2026 SCC OnLine Del 1470.
[iv] Mahavir Prasad Gupta & Sons v. Government of NCT of Delhi, 2025 SCC OnLine Del 4245.
[vi] Titagarh Rail Systems Ltd. V. Railways Board, Ministry of Railways, 2026 SCC OnLine Del 1802.
[vii] Traviera Silk Mills Pvt. Ltd. and Ors. V. Toto Toya Spin Pvt. Ltd. and Anr., 2026 OnLine SCC Bom 4367.
[viii] Arbitration and Conciliation Act, 1996 (Act 26 of 1996).
[ix] Constitution of India, 1950.
[x] TRF Ltd. v. Energo Engineering Projects Ltd., (2017) 8 SCC 377.
[xi] s. 13(2), Arbitration and Conciliation Act, 1996 (India).
[xii] s. 34, Arbitration and Conciliation Act, 1996 (India).
[xiii] Airports Authority of India v. Ahluwalia Contracts India Ltd., 2026 SCC OnLine Del 5364.
[xiv] McLeod Russel India Ltd. v. Aditya Birla Finance Ltd., 2023 SCC OnLine Cal 330.
[xv] Arjun Mall Retail Holdings Pvt. Ltd. V. Gunocen Inc., 2024 SCC OnLine Del 428.
Author(s)
Aahana Singh
Student of Rajiv Gandhi National University of Law