CPWD Cannot Restrict Contractor's Arbitrator Choice To Its Own Panel: Delhi High Court

The Delhi High Court has held that the Central Public Works Department (CPWD) cannot appoint a sole arbitrator through a mechanism that empowers its own officer to make the appointment. It also cannot restrict a contractor's choice to a panel of arbitrators curated by the department.

Justice Sachin Datta observed:

“…the choice of the petitioner stands confined to a list of 'CPWD Empanelled Arbitrators' prepared by the respondent, with the Arbitrator Appointing Authority empowered to select and appoint from that list himself should the petitioner not exercise its option. That is not permissible as per Central Organisation for Railway Electrification (supra) and Kalpataru Projects International Ltd. The appointment mechanism contained in Clause 25 cannot, therefore, be sustained, and it is incumbent on this Court to appoint an independent Sole Arbitrator.”

The ruling came in a petition filed by Pramod Kumar Goel seeking the appointment of a sole arbitrator to resolve disputes arising from a contract with the Union of India through CPWD.

The Union of India opposed the petition, arguing that Goel had relied on a superseded version of the arbitration clause. It also contended that his notice seeking an arbitrator did not follow the prescribed format and that the disputes were “deadwood”.

The court referred to the Supreme Court's decisions in In Re: Interplay Between Arbitration Agreements under the Arbitration and Conciliation Act, 1996 and the Indian Stamp Act, 1899, (2024) 6 SCC 1, and SBI General Insurance Co. Ltd. v. Krish Spinning, 2024 SCC OnLine SC 1754.

It held that a court considering an arbitrator appointment request must limit its examination under Section 11(6A) of the Arbitration and Conciliation Act, 1996, to whether an arbitration agreement exists. Other issues must be decided by the arbitral tribunal under Section 16.

Both parties acknowledged the existence of an arbitration agreement. Their dispute concerned which version of Clause 25 applied.

The court found that Goel's notice substantially complied with the prescribed requirements. It observed that a departure from the prescribed format could not defeat his right to arbitration when the notice had served its intended purpose.

The court also left the “deadwood” objection for the sole arbitrator to decide.

Examining the clause relied on by the Union of India, the court found that the appointing authority was the Superintending Engineer, DC-4, CPWD, an officer of the department. Under Section 12(5) read with Entry 1 of the Seventh Schedule, the officer was ineligible to act as an arbitrator and, under Perkins Eastman Architects DPC v. HSCC (India) Ltd., (2020) 20 SCC 760, to appoint one.

Relying on Central Organisation for Railway Electrification v. ECI SPIC SMO MCML (JV), (2025), and Kalpataru Projects International Ltd. v. Northern Railway, 2026, the court rejected the panel-based appointment mechanism.

It appointed advocate Ritika Jhurani as sole arbitrator and directed that the proceedings be conducted under the aegis of the Delhi International Arbitration Centre (DIAC), in accordance with its rules. The arbitrator must furnish the disclosures required under Section 12.

The Union of India may raise preliminary objections on jurisdiction and arbitrability before the arbitrator. The parties' claims and counterclaims remain open, and the court clarified that it had expressed no opinion on their merits.