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Issues: (i) Whether an arbitral award made by a unilaterally appointed arbitrator, without an express written waiver after disputes had arisen, was void and unenforceable; (ii) Whether such an award could be refused execution under Section 36 of the Arbitration and Conciliation Act, 1996 on the ground that it was a nullity.
Issue (i): Whether an arbitral award made by a unilaterally appointed arbitrator, without an express written waiver after disputes had arisen, was void and unenforceable.
Analysis: The governing principle applied was that an arbitrator who falls within the ineligibility regime under Section 12(5) read with Schedule VII lacks inherent jurisdiction, and that this ineligibility extends to a sole arbitrator appointed unilaterally by an interested party. The Court relied on the settled position that such unilateral appointment offends neutrality and independence, and that any prior contractual arrangement yielding such power is overridden unless there is an express agreement in writing after disputes have arisen. On that basis, the appointment of the sole arbitrator was held to be illegal and void.
Conclusion: The unilateral appointment was invalid, and the award founded on it was treated as non-est in law.
Issue (ii): Whether such an award could be refused execution under Section 36 of the Arbitration and Conciliation Act, 1996 on the ground that it was a nullity.
Analysis: The Court held that although execution proceedings are generally confined to enforcement, an executing court is not bound to execute an that is a nullity for want of inherent jurisdiction. Applying that principle to arbitration, the Court reasoned that an award rendered by a de jure ineligible arbitrator cannot attain the status of a legal decree and may be resisted at the execution stage. The absence of a valid arbitral foundation meant that the award could not be treated as executable, and the Court also noted that the parties had consented to fresh arbitration before a new sole arbitrator.
Conclusion: Execution was refused, and the petition was dismissed.
Final Conclusion: An award rendered by a unilaterally appointed and de jure ineligible arbitrator was held unenforceable, and the executing court was held entitled to decline enforcement where the award was a nullity.
Ratio Decidendi: A sole arbitrator appointed unilaterally by an interested party after disputes have arisen, without an express written waiver, is de jure ineligible; an award made by such an arbitrator is a nullity and may be refused execution for lack of inherent jurisdiction.
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