BHARAT BROADBAND NETWORK LIMITED Vs. UNITED TELECOMS LIMITED

JUDGEMENT

(1.) These petitions raise an important and interesting issue of law arising out of section 12(5) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the 'Act') and proviso thereto. The question of law being as to whether a party, who appoints an arbitrator knowing fully well that such arbitrator is suffering from a disability that falls under any of the categories specified in the Seventh Schedule of the Act and shall be ineligible to be appointed as an arbitrator, can later challenge his appointment on the ground that he was ineligible to be appointed as an arbitrator under Section 12(5) of the Act.

(2.) The disputes between the parties have arisen out of the Purchase Order bearing No. MM/APO/007/2014-15 dated 30th September, 2014. Clause III.20.1 thereof provides for the resolution of the disputes between the parties through arbitration and the same is quoted herein below:-

(3.) A bare reading of the above clause would show that in terms thereof, the CMD of the petitioner or his nominee was to act as the Sole Arbitrator. The Supreme Court in TRF Ltd. v. Energo Engineering Projects Ltd. (2017) 8 SCC 377 , interpreting Section 12(5) of the Act and a similar clause in the agreement held as under:-