BHARAT BROADBAND NETWORK LIMITED versus UNITED TELECOMS LIMITED

BHARAT BROADBAND NETWORK LIMITED versus UNITED TELECOMS LIMITED

Appointment of an arbitrator by an ineligible person as per s.12(5) of the Arbitration and Conciliation Act, 1996 and the Seventh Schedule is void ab initio. Waiver under the proviso to s.12(5) requires an express agreement in writing after disputes arise. Mere filing of statements or appointment letters does not constitute such waiver. The mandate of the arbitrator stands terminated de jure, and a substitute must be appointed.

Parties
Appellant: Bharat Broadband Network Limited; Respondent: United Telecoms Limited
Jurisdiction
India
Judgment Date
16 April 2019
Procedural Posture
Civil Appeal / Supreme Court Decision on Appeal From High Court Order
Outcome
Appeal allowed; impugned judgment set aside.
Legal Topics
Ineligibility of Arbitrator Under Arbitration and Conciliation Act, 1996 S.12(5), Express Waiver Under Proviso to S.12(5), Eligibility to Appoint Arbitrator, Mandate of Arbitrator Under S.14
Arbitration Law Ineligibility of Arbitrator Under Arbitration and Conciliation Act, 1996 S.12(5) Express Waiver Under Proviso to S.12(5) Eligibility to Appoint Arbitrator Mandate of Arbitrator Under S.14

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Parties

Bharat Broadband Network Limited

Appellant

United Telecoms Limited

Respondent

Procedural Posture

Civil Appeal / Supreme Court Decision on Appeal From High Court Order

Legal Issues

  1. 1 Whether the appointment of an arbitrator by an ineligible person (Managing Director) is void under s.12(5) of the Arbitration and Conciliation Act, 1996 and the Seventh Schedule.
  2. 2 Whether the proviso to s.12(5) applies in the absence of an express waiver agreement in writing after disputes have arisen.

Ratio Decidendi

Appointment of an arbitrator by an ineligible person as per s.12(5) of the Arbitration and Conciliation Act, 1996 and the Seventh Schedule is void ab initio. Waiver under the proviso to s.12(5) requires an express agreement in writing after disputes arise. Mere filing of statements or appointment letters does not constitute such waiver. The mandate of the arbitrator stands terminated de jure, and a substitute must be appointed.

Court Disposition

Appeal allowed; impugned judgment set aside.

Orders

  • Mandate of Shri Khan as arbitrator terminated as de jure unable to perform his function under s.12(5).
  • High Court may appoint a substitute arbitrator with consent of both parties.