Severable arbitration clauses preserve neutral dispute resolution despite invalid unilateral appointment mechanisms and bar merit review of concluded appointments.

A concluded arbitrator appointment under Section 11(6) cannot be reopened on merits through review, as the referral court performs only a limited prima facie examination and substantive jurisdictional issues ordinarily lie with the tribunal. A unilateral and exclusionary appointment procedure may violate neutrality and equality, but its invalid terms are severable where the clause otherwise contains a clear agreement to arbitrate; the substantive arbitration agreement survives for neutral appointment. Joint mandate-extension applications constitute waiver by conduct for procedural non-compliance under Section 4, but cannot waive mandatory arbitrator ineligibility under Section 12(5) without an express written post-dispute agreement. A substitute arbitrator should continue from the interrupted stage.

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Issues: (i) Whether the High Court could review or recall its concluded order appointing an arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996; (ii) Whether Clause 25 constituted a valid and subsisting arbitration agreement despite its unilateral and exclusionary appointment mechanism; (iii) Whether joint applications for extension of the arbitral mandate constituted waiver under Sections 4 and 12(5) of the Arbitration and Conciliation Act, 1996.

Issue (i): Whether the High Court could review or recall its concluded order appointing an arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996.

Analysis: The Arbitration and Conciliation Act, 1996 is a self-contained code founded on minimal judicial intervention. The referral court's role under Section 11 is facilitative and limited to a prima facie examination of the arbitration agreement; questions of substantive validity and jurisdiction ordinarily fall to the arbitral tribunal under Section 16. Review in arbitration matters is confined to patent procedural errors or material facts overlooked, and cannot reopen an interpretation of law or an appointment order that has attained finality. The respondents neither challenged the appointment order nor raised a timely jurisdictional objection before the tribunal, but participated in the arbitration and sought extensions of mandate.

Conclusion: The High Court lacked jurisdiction to reopen and review its Section 11(6) appointment order on merits; its review of the concluded appointment was invalid.

Issue (ii): Whether Clause 25 constituted a valid and subsisting arbitration agreement despite its unilateral and exclusionary appointment mechanism.

Analysis: Clause 25 embodied an unequivocal agreement to refer contractual disputes to arbitration, and the parties' prior and continued conduct, including arbitral participation and pleadings, independently established their intention to arbitrate under Section 7. The unilateral appointment mechanism and the stipulation foreclosing arbitration if that mechanism failed offended neutrality, equality and the prohibition against unilateral arbitral appointments in public-private contracts. Those offending procedural terms were severable from the substantive promise to arbitrate. Their invalidity did not extinguish the arbitration agreement or prevent an independent appointment under Section 11(6).

Conclusion: A valid and subsisting arbitration agreement existed; the unilateral and exclusionary portions of Clause 25 were void and severable, while the substantive agreement to arbitrate survived.

Issue (iii): Whether joint applications for extension of the arbitral mandate constituted waiver under Sections 4 and 12(5) of the Arbitration and Conciliation Act, 1996.

Analysis: Section 12(5) creates a mandatory ineligibility that can be waived only by an express written post-dispute agreement, whereas Section 4 governs waiver by informed conduct concerning other procedural non-compliance. A joint application under Section 29A signifies consent to continuation of the tribunal and amounts to waiver under Section 4, but cannot by itself cure a Seventh Schedule ineligibility under Section 12(5). No such statutory ineligibility attached to the appointed arbitrator in this case.

Conclusion: The joint applications constituted waiver by conduct under Section 4; they did not amount to an express written waiver under Section 12(5), which was not attracted on the facts.

Final Conclusion: The concluded arbitral process must be preserved through appointment of a substitute arbitrator, who is to continue from the stage at which the proceedings were interrupted rather than recommence them afresh.

Ratio Decidendi: Invalidity of a unilateral appointment procedure does not nullify a separable substantive agreement to arbitrate; courts must preserve that agreement through a neutral appointment while avoiding impermissible midstream review of a concluded Section 11 appointment.

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