[Cites 13, Cited by 0]
Delhi High Court
Airports Authority Of India vs Sikka Associates Architects on 13 January, 2026
Author: Subramonium Prasad
Bench: Subramonium Prasad
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of decision: 13th JANUARY, 2026
IN THE MATTER OF:
+ O.M.P. (COMM) 482/2023
AIRPORTS AUTHORITY OF INDIA .....Petitioner
Through: Mr. Raghav Shankar, ASG , Mr.
Vaibhav Kalra, Ms. Anisha
Upadhyay, Ms. Neha Bhatnagar , Mr.
Talha Yusufi, with Mr. Gagan
Kochar, SM Law, Ms. Pragya Bansal,
Manager Law on behalf of the
Petitioner , AAI
versus
SIKKA ASSOCIATES ARCHITECTS .....Respondent
Through: Mr. Vikas Goel, Mr. Harmanbir
Singh Sandhu, Mr. Ritesh Sharma,
Mr. Vivek Gupta, Advocates
+ OMP (ENF.) (COMM.) 2/2024, EX.APPL.(OS) 8/2024 &
EX.APPL.(OS) 1686/2024
MR. S. R. SIKKA SOLE PROPRIETOR OF M/S SIKKA
ASSOCIATES .....Decree Holder
Through: Mr. Vikas Goel, Mr. Harmanbir
Singh Sandhu, Mr. Ritesh Sharma,
Mr. Vivek Gupta, Advocates
versus
AIRPORTS AUTHORITY OF INDIA .....Judgement Debtor
Through: Mr. Vaibhav Kalra, Ms. Anisha
Upadhyay, Ms. Neha Bhatnagar , Mr.
Signature Not Verified
Signed By:HARIOM O.M.P. (COMM) 482/2023& ANR. Page 1 of 17
SINGH KIRMOLIYA
Signing Date:16.01.2026
17:39:31
Talha Yusufi, with Mr. Gagan
Kochar, SM Law, Ms. Pragya Bansal,
Manager Law
CORAM:
HON'BLE MR. JUSTICE SUBRAMONIUM PRASAD
JUDGMENT
1. O.M.P. (COMM) 482/2023 has been filed by the Airports Authority
of India (Petitioner/AAI) under Section 34 of the Arbitration and
Conciliation Act, 1996 challenging the Award dated 31.07.2023 (Impugned
Award) passed by the learned Sole Arbitrator.
2. OMP (ENF.) (COMM.) 2/2024 has been filed by the Decree Holder
seeking enforcement of the Impugned Award passed by the learned Sole
Arbitrator.
3. Though the Petitioner/AAI has taken several grounds to challenge the
Impugned Award, on 29.01.2025 this Court noted that the learned Sole
Arbitrator was appointed by the Petitioner itself and after passing of
Impugned Award, the Petitioner has challenged the Impugned Award on the
ground that the appointment of Arbitrator was unilateral in nature and,
therefore, the Impugned Award be set aside. The question which therefore,
arose before this Court was as to whether a party which appoints the
arbitrator can turn around and challenge the arbitral award on the ground of
unilateral appointment or not. Relevant portions of the Order dated
29.01.2025 reads as under:
"3. Material on record indicates that the
appointment is unilateral in nature and an argument is
being raised that since the appointment has been
unilaterally made, the award be set aside. What is
interesting is that it is the Petitioner which had
appointed the Arbitrator. The learned Counsel for the
Petitioner contends that this does not take away the
right of the Petitioner to file a Petition under Section
34 of the Arbitration and Conciliation Act but the right
has now arisen because of the judgment passed by the
Apex Court in Central Organisation for Railway
Electrification v. ECI SPIC SMO MCML (JV) a Joint
Venture Company, 2024 SCC OnLine SC 3654.
4 The question that arises herein is can the party
which appoints the Arbitrator turn around and
challenge the Award stating that since the appointment
has been unilateral in nature, the Award gets vitiated
by the judgment passed by the Apex Court in Central
Organisation for Railway Electrification (supra).
5. Learned Counsel for the Petitioner draws
attention of this Court to the judgment dated
28.05.2024 passed by the Co-ordinate Bench of this
Court in O.M.P (COMM) 573/2020 in which an Award
has been set aside on the ground where a challenge
has been filed by the party who appoints the
Arbitrator. The said judgment places reliance on the
judgment passed by the Apex Court in Broadband
Network Ltd. v. United Telecom Limited, (2019) 5 SCC
6. Prima facie, in the opinion of this Court, the
judgment passed by the Apex Court in Broadband
Network Ltd (supra) arose in a case when the
appointment is challenged under Section 14 of the
Arbitration and Conciliation Act and was not a case
under Section 34 of the Arbitration and Conciliation
Act. This Court would also like to consider as to
whether the judgment passed by the Apex Court in
Broadband Network Ltd (supra) would be applicable
to set aside an award where the party who has itself
appointed the arbitrator unilaterally seeks to set aside
the award on the ground of unilateral appointment."
4. Before adjudicating upon the above question, this Court deems it fit to
appreciate the factual matrix involved in the instant Petition. The
Petitioner/AAI and the Respondent entered into an Agreement dated
27.02.2008 wherein the Respondent was engaged by the Petitioner/AAI to
provide Architectural /Engineering consultancy services for the proposed
new ATC Tower and Technical Building at NSCBI Airport at Kolkata, West
Bengal, India. It is stated that the said Agreement contained an Arbitration
Clause and the same reads as under:
"11.0. DISPUTE REDRESSAL
In the event of any dispute, difference or question
arising out of or concerning the agreement for the
execution of work herein specified which cannot be
settled mutually the same shall be referred to the sole
arbitrator appointed by Chairman, AAI. The
arbitration proceedings will be governed by the
provision contained in the Arbitration and Conciliation
Act 1996 at New Delhi. The decision of the Arbitrator
shall be final and binding for both the parties. Even in
case of any dispute, difference or question arising out
of this contract and the same is referred to arbitration,
the Consultant shall continue to perform his duties
under this agreement with due diligence and Authority
will make the payment to the Consultant to the extent
incorporated in the Agreement.
Action to appoint an Arbitrator shall be taken within
two month from the date of communication made in
writing by any party to the Chairman Airports
Authority of India, Authority stating that a dispute has
arisen and that the matter be referred to arbitration in
accordance with this Agreement along with the list of
quantified dispute to be referred for arbitration.
In all cases where the total amount of claims in dispute
is Rs. 75,000/- (rupees seventy five thousand only) and
above, the arbitrator shall give reasons for the award.
Subject as aforesaid the provision of the Arbitration &
Conciliation Act 1996 or any statutory modification or
re-enactment thereof and the rules made there under
and for the time being in force shall apply to the
arbitration proceeding under this clause."
5. It is stated that since disputes arose between the parties, the
Respondent invoked arbitration by sending a Notice dated 30.07.2020 to the
Petitioner /AAI under Section 21 of the Arbitration and Conciliation Act,
1996 in terms of Clause 11 of the Agreement. In the said Notice invoking
Arbitration, the Respondent referred to the Judgment of the Apex Court in
Perkins Eastman Architects DPC & Anr. vs. HSCC (India) Limited, (2020)
20 SCC 760. It is stated that the said Notice was replied to by the
Petitioner/AAI vide letter dated 23.09.2020 wherein the Petitioner/AAI
sought Respondent's consent to nominate an Arbitrator from a panel of five
arbitrators. The said letter is reproduced herein in its entirety and the same
reads as under:
"To,
M/s Sikka Associates Architects
A2/1, Africa Avenue,
Safdarjung Enclave,
New Delhi - 110029
Tel: 43232535
Fax: 26194481
Subject: Consent regarding appointment of Arbitrator
REF: Your request letter for referring disputes to
arbitrator dated 30.07.2020
Madam/Sir,
We are in receipt of your request dated 30.07.2020 for
adjudication of disputes through arbitration under
Clause -11 of the Agreement for
"Architectural/Engineering Consultancy Services for
Proposed New ATC Tower and Technical Block at
NSCB Airport, Kolkata" dated 27.02.2008.
In view of the amended provisions of the Arbitration &
Conciliation Act, 1996 and pursuant to the provision to
Section 12(5) of the said enactment, Airports Authority
of India is seeking your consent to nominate an
arbitrator from the AAI/DIAC/ICA panel of arbitrators
mentioned as under for adjudication of the dispute that
have arisen:
a. Sh. Pradeep Kumar Gupta,
Former Additional Director General (Special) -
CPWD
b. Sh. Arun Kumar Trivedi,
Former Additional Director General - CPWD
c. Sh. S.C. Vasudeva,
Former Additional Director General - CPWD
d. Sh. V.K. Maheshwari,
Former Additional District & Sessions Judge
e. Sh. Prem Kumar Malhotra,
Former Law Secretary, Government of India
If you agree to the submission of dispute to any of the
aforementioned arbitrators in terms of Clause -11 of
the agreement executed between AAI and M/s Sikka
Associates Architects, then please communicate your
consent within 07 days of the receipt of this letter by
you, so that the appointment may be given effect to, in
accordance with the provisions of the Arbitration &
Conciliation Act, 1996 (as amended from time to time).
Thanking you,"
6. Vide letter dated 28.09.2020, the Respondent gave its consent to the
appointment of Sh. S. C. Vasudeva, Former Additional Director General -
CPWD, appointed as the Sole Arbitrator. Consequently, vide Letter dated
20.10.2020, the Petitioner/AAI appointed Sh. S. C. Vasudeva, Former
Additional Director General - CPWD, as the Sole Arbitrator to adjudicate
on the disputes between the parties. Relevant portion of the Letter dated
28.09.2020 reads as under:
"Thanks for your above referred letter.
From the names referred to us, we confirm our
acceptance for Shri S.C. Vasudeva, to be the arbitrator
for the case."
7. Relevant portion of the Letter dated 20.10.2020 reads as under:
"WHEREAS the claimant was entrusted the work of
Consultancy of Technical Block-cum-ATC Tower at
NSCBI Airport, Kolkata.
AND WHEREAS certain disputes have arisen between
the parties and claimant has Invoked clause 11 of the
Contract Agreement, which provides for appointment
of Arbitrator to adjudicate the disputes.
Now, therefore, as per the power conferred on me
under Clause 11 of the Contract Agreement, I, Arvind
Singh, Chairman, AAl, hereby, appoint Shri S.C.
Vasudeva, Addl. DG, CPWD (Retd.) as the Sole
Arbitrator to adjudicate and decide the claims of the
claimant (Annexure-1) and counter claims of AAI, If
any.
The arbitration proceeding shall be governed by the
Arbitration and Conciliation Act, 1996, as amended by
the Amendment Acts of 2015 and 2019. The Fees and
TA/DA expenses of arbitration shall be bome in equal
share by Claimant and Respondent. The fee shall be
fixed as per the Fourth Schedule of the Arbitration and
Conciliation (Amendment) Act, 2015."
8. Resultantly, the first question which arises before this Court is as to
whether the process adopted by the Petitioner/AAI amounts to unilateral
appointment of Arbitrator or not. If answered in the affirmative, this Court
shall then delve into whether the said act of unilateral appointment by AAI
can be advanced by AAI itself as a ground for setting aside the Impugned
Award.
9. In the opinion of this Court, the issue as to whether asking a party to
select an arbitrator from a truncated panel of arbitrators to adjudicate on the
disputes is valid or not, is no longer res integra as being squarely covered by
the Judgment of the Apex Court in Voestalpine Schienen GmbH v. DMRC,
(2017) 4 SCC 665, has held as under:
"28. Before we part with, we deem it necessary to make
certain comments on the procedure contained in the
arbitration agreement for constituting the Arbitral
Tribunal. Even when there are a number of persons
empanelled, discretion is with DMRC to pick five
persons therefrom and forward their names to the
other side which is to select one of these five persons
as its nominee (though in this case, it is now done
away with). Not only this, DMRC is also to nominate
its arbitrator from the said list. Above all, the two
arbitrators have also limited choice of picking upon the
third arbitrator from the very same list i.e. from
remaining three persons. This procedure has two
adverse consequences. In the first place, the choice
given to the opposite party is limited as it has to
choose one out of the five names that are forwarded
by the other side. There is no free choice to nominate
a person out of the entire panel prepared by DMRC.
Secondly, with the discretion given to DMRC to
choose five persons, a room for suspicion is created
in the mind of the other side that DMRC may have
picked up its own favourites. Such a situation has to
be countenanced. We are, therefore, of the opinion
that sub-clauses (b) & (c) of Clause 9.2 of SCC need
to be deleted and instead choice should be given to
the parties to nominate any person from the entire
panel of arbitrators. Likewise, the two arbitrators
nominated by the parties should be given full freedom
to choose the third arbitrator from the whole panel.
29. Some comments are also needed on Clause 9.2(a)
of GCC/SCC, as per which DMRC prepares the panel
of "serving or retired engineers of government
departments or public sector undertakings". It is not
understood as to why the panel has to be limited to
the aforesaid category of persons. Keeping in view the
spirit of the amended provision and in order to instil
confidence in the mind of the other party, it is
imperative that panel should be broadbased. Apart
from serving or retired engineers of government
departments and public sector undertakings,
engineers of prominence and high repute from
private sector should also be included. Likewise panel
should comprise of persons with legal background
like Judges and lawyers of repute as it is not
necessary that all disputes that arise, would be of
technical nature. There can be disputes involving
purely or substantially legal issues, that too,
complicated in nature. Likewise, some disputes may
have the dimension of accountancy, etc. Therefore, it
would also be appropriate to include persons from
this field as well.
30. Time has come to send positive signals to the
international business community, in order to create
healthy arbitration environment and conducive
arbitration culture in this country. Further, as
highlighted by the Law Commission also in its report,
duty becomes more onerous in government contracts,
where one of the parties to the dispute is the
Government or public sector undertaking itself and the
authority to appoint the arbitrator rests with it. In the
instant case also, though choice is given by DMRC to
the opposite party but it is limited to choose an
arbitrator from the panel prepared by DMRC. It,
therefore, becomes imperative to have a much
broadbased panel, so that there is no misapprehension
that principle of impartiality and independence would
be discarded at any stage of the proceedings, specially
at the stage of constitution of the Arbitral Tribunal.
We, therefore, direct that DMRC shall prepare a
broadbased panel on the aforesaid lines, within a
period of two months from today." (emphasis supplied)
10. The aboveJudgment has been referred to and quoted with approval in
a Judgment delivered by a five Judges Bench of the Apex Court in Central
Organisation for Railway Electrification v. ECI SPIC SMO MCML (JV),
(2025) 4 SCC 641, wherein the Apex Court held as under:
"132. In Voestalpine [Voestalpine Schienen GmbH v.
DMRC Ltd., (2017) 4 SCC 665 : (2017) 2 SCC (Civ)
607] and CORE [Central Organisation for Railway
Electrification v. ECI-SPIC-SMO-MCML (JV),
(2020) 14 SCC 712] , one of the parties curated a
panel of arbitrators and mandated the other party to
select their arbitrator from the panel. Since the
curation of the list is exclusively undertaken by one
party, the other party is effectively excluded from the
process of curating the panel from which exclusively,
the appointment of an arbitrator is to be made. The
other party has to mandatorily select its arbitrator
from a curated panel, restricting their freedom to
appoint an arbitrator of their choice. This is against
the principle of equal treatment contained under
Section 18. In this situation, there is no effective
counterbalance because both parties do not
participate equally in the process of appointing
arbitrators. The party curating the panel can restrict
the choice of the party only to a person who is on the
panel selected by the other party and to no other
person.
133. Many PSUs are regularly involved in arbitration
disputes and constantly need the services of
arbitrators. Such institutions often maintain a pool of
potential arbitrators with the sole object of having a
ready pool of qualified professionals who have
committed their time and consented to act as
arbitrators for fixed fees. The Arbitration Act does not
prohibit parties to an arbitration agreement from
maintaining a curated panel of potential arbitrators.
However, the problem arises when the PSUs make it
mandatory for other parties to select their nominees
from the curated panel of arbitrators. When a PSU
exercises its discretion to curate a panel, the very
factor that the PSU is choosing only a certain number
of persons as potential arbitrators and not others will
raise a reasonable doubt in the mind of a fair-minded
person. The PSUs may conceivably have nominated a
person on the panel of potential arbitrators because
they have a certain predisposition in favour of the
former. This doubt is reinforced when the other party
is given no choice but to select its arbitrator from the
curated panel.
134. In CORE [Central Organisation for Railway
Electrification v. ECI-SPIC-SMO-MCML (JV), (2020)
14 SCC 712] , the three-member tribunal was sought
to be constituted in the following manner : (i) the
Railways would suggest at least four names of retired
railway officers; (ii) the contractor would select two
names out of the panel for appointment as their
arbitrator; (iii) The General Manager (of the
Railways) would thereafter choose at least one person
out of the two to be appointed as the contractor's
arbitrator; and (iv) The General Manager would
proceed to appoint the balance arbitrators from the
panel or outside the panel and also indicate the
presiding arbitrator.
135. Such an arbitrator-appointment clause is likely
to give rise to justifiable doubts as to the
independence and impartiality of arbitrators for two
reasons : (i) the contractor is restricted to choosing its
arbitrator from the panel of four arbitrators
nominated by the party who is a disputant; and (ii)
the contractor's choice is further constrained because
it is made subject to the decision of the General
Manager who will choose one among the two persons
suggested by the party. Since the contractor has to
select its arbitrator from a curated panel, the
arbitration clause does not allow the contractor equal
participation in the appointment of their arbitrator.
Moreover, the clause allows the General Manager to
appoint the balance arbitrators from either the panel
or outside the panel. Thus, the process of appointing
the arbitrators is unequal because the General
Manager can go beyond the panel of four potential
arbitrators, while the contractor is bound by the
names enlisted in the panel." (emphasis supplied)
11. Thus, the procedure for appointment of an Arbitrator, as detailed in
the foregoing judgments, shows that though the Respondent had referred to
the Judgment of the Apex Court in Perkins (supra), the Petitioner/AAI
having given a list of five arbitrators, asking the Respondent to nominate an
Arbitrator from that panel of five arbitrators and the Respondent having
selected Sh. S. C. Vasudev as the Sole Arbitrator, has been held to be an
appointment which is bad in law, by the Apex Court in CORE (supra).
12. A Letter dated 29.03.2020 sent by the Petitioner to the Respondent
indicates that the Petitioner has only given a truncated panel of arbitrators
and vide Letter dated 28.09.2020, the Respondent has consented to one of
the Arbitrator from the truncated panel of arbitrators and the Petitioner
thereafter, vide Letter dated 20.10.2020 constituted the Tribunal. This
process has been held to be bad by the Apex Court in Voestalpine Schienen
(supra) and was affirmed by the Five Judge Bench in CORE (supra). The
contention of the learned Counsel for the Respondent is that the process
adopted by the Petitioner does not amount to unilateral appointment or a
procedure which is otherwise valid and that it was the Respondent which
selected the Arbitrator, cannot be accepted.
13. The next issue that arises for consideration is as to whether the
Petitioner/AAI, who appointed the Arbitrator, can now turn around and
challenge the Impugned Award on the ground of unilateral appointment.
This issue is also no longer res integra has having been decided by the
Division Bench of this Court in Mahavir Prasad Gupta & Sons v. Govt. of
NCT of Delhi, 2025 SCC OnLine Del 4241, wherein the Division Bench
has held as under:
"74. This issue requires consideration of following
questions:
a) When a party itself has unilaterally appointed the
arbitrator, whether that party can object to the
unilateral appointment of the arbitrator at any stage
during or after the arbitration proceedings?
b) If a party has unilaterally appointed an arbitrator,
can that party be deemed to have given express waiver
in writing under Section 12(5) of the Act while making
the appointment itself?
75. The analysis of the above questions would require
consideration of the act of appointment of the
arbitrator by a party and nature of such exercise of
right. Section 12(4) of the Act provide that a party may
challenge an arbitrator appointed by him, or in whose
appointment he has participated, only for reasons of
which he becomes aware after the appointment has
been made.
76. Accordingly, if the party that has the power to
make unilateral appointments exercises the right by
making the appointment of the arbitrator, that party
can challenge the appointment made by him only for
reasons that he comes to know after the appointment is
made. In cases of unilateral appointment, it is
presumed that the party is aware of the disqualification
of the arbitrator at the time of the appointment itself.
77. Further, Section 12(5) of the Act provides that
notwithstanding any prior agreement to the contrary,
any person whose relationship, with the parties or
counsel or the subject-matter of the dispute, falls under
any of the categories specified in the Seventh Schedule
of the Act shall be ineligible to be appointed as an
arbitrator. The proviso to Section 12(5) of the Act
provides that parties may, subsequent to disputes
having arisen between them, waive the applicability of
Section 12(5) of the Act by an express agreement in
writing.
78. A conjoint reading of Sections 12(4) and 12(5) of
the Act would make clear that even if there is an
agreement for the appointment of unilateral
appointment, such clause would be invalid except when
both parties mutually agree to waive the same in
writing.
79. Hence, exercise of power to unilaterally appoint
the arbitrator by a party cannot be termed as express
agreement to waive the invalidity of the arbitration
agreement providing for unilateral appointment. For
waiver under Section 12(5) of the Act after the dispute
have arisen, the parties are required to consciously
agree in writing to waive the ineligibility of the
arbitrator. Grounds of ineligibility of the arbitrator
under Seventh Schedule are derived from Red List of
IBA Rules on Conflict of Interest in International
Commercial Arbitration. The Act was as amended in
2015 to provide a detailed framework to address
arbitrator bias. This framework includes the Fifth and
Seventh Schedules, which draw from the Orange and
Red Lists of the IBA Guidelines, respectively. The Fifth
Schedule requires arbitrators to disclose any
circumstances that might reasonably affect their
impartiality, including relationships with the parties,
counsel, or subject matter of the dispute. The Seventh
Schedule reflecting the Red List, outlines scenarios of
relationship conflict that would result in de jure
ineligibility of an arbitrator.
80. The Sixth Schedule complements this by
prescribing the format and content of such disclosures.
In HRD Corpn. v. GAIL (India) Ltd., (2018) 12 SCC
471, the Supreme Court observed that the categories
listed under the Fifth and Seventh Schedules must be
construed by taking a "broad commonsensical
approach", without restricting or enlarging the words.
81. Accordingly, the party that unilaterally appointed
the arbitrator cannot be deemed to have agreed in
writing to waive the ineligibility of the arbitrator by
act of appointment. When appointment itself is
ineligible under the provisions of Section 12(5) of the
Act read with Seventh Schedule of the Act, it does not
take away the right of the party to challenge such an
appointment merely because that party had made the
appointment in absence of express agreement in
writing between the parties to waive the applicability
of Section 12(5) of the Act.
82. Hence, a party which unilaterally appointed the
arbitrator has right to object to such appointment
irrespective of fact that that party itself made the
appointment of the arbitrator. Mere fact of making
appointment in writing will not make the ineligible
appointment a valid appointment unless there is
express agreement in writing waiving such
ineligibility.
83. Although it appears disingenuous, a party
appointing an the sole or presiding arbitrator
unilaterally can challenge the award on the ground
that the award has been rendered in contravention of
Section 12(5) of the Act read with Seventh Schedule of
the Act notwithstanding that the said party itself made
such an appointment. When the Arbitral Tribunal
inherently lacked jurisdiction to act, the arbitration
proceedings are void ab initio, rendering the award
unenforceable irrespective of which party made such
unilateral appointment. The arbitral proceedings and
an award made by an unilaterally appointed sole or
presiding arbitrator, who is de jure ineligible to be
appointed as an arbitrator by virtue of the Seventh
Schedule of the Act are void ab initio. The waiver
under the proviso to Section 12(5) of the Act must be
express and subsequent to the disputes having been
arisen between the parties. Hence, the party which
appointed the sole or presiding arbitrator unilaterally
can also challenge the award under Section 34 of the
Act on the ground of such ineligibility."
(emphasis supplied)
14. In view of the above, the Impugned Award dated 31.07.2023 passed
by the learned Sole Arbitrator is set aside.
15. Since the Impugned Award has been set aside, OMP (ENF.)
(COMM.) 2/2024, which has been filed by the Respondent/Decree Holder
seeking enforcement of the Award dated 31.07.2023, has become
infructuous.
16. Accordingly, the Petitions are disposed of along with pending
application(s), if any.
SUBRAMONIUM PRASAD, J
JANUARY 13, 2026
Rahul
