Pre-2015 Arbitrator Appointment Void Only Without Contractual Authority Or Consent: Bombay High Court

The Bombay High Court on 4 August held that an executing court cannot refuse enforcement of an arbitral award arising from proceedings initiated before the 2015 amendment to the Arbitration and Conciliation Act, 1996 merely because the arbitrator was appointed unilaterally, unless the appointment lacked contractual authority and was made without the other party's consent.

Justice Jitendra Jain held that pre-23 October 2015 arbitral awards remain enforceable where the arbitration agreement named the arbitrator, identified the office-holder who would act as arbitrator, or authorised one party to appoint the arbitrator, unless the appointment was successfully challenged. He observed:

“Unilateral appointment of an arbitrator prior to 23 October 2015 wherein the arbitration clause provides for a named arbitrator or by designation or authorising appointment of an arbitrator by one of the party will not be without jurisdiction and consequently, the proceedings arising therefrom would not be void ab initio except in cases, where there is no contractual clause in the agreement naming a particular arbitrator or conferring on one of the party the right to unilateral appointment of an arbitrator but the appointment is made by one of the party in the absence of consent of other party. In the latter case, it will be void.”

The Court was hearing execution applications filed by Paisalo Digital Limited, formerly known as S.E. Investments Ltd., seeking enforcement of arbitral awards passed before 23 October 2015 against Star Bazaar Private Limited, Hareram Cotton Industries, Maple Composite Containers Limited and Sezal Glass Limited. The judgment-debtors opposed enforcement, contending that the awards were invalid as the arbitrators had been appointed unilaterally.

On 1 July 2026, the Bench framed two questions: whether every unilateral appointment made before 23 October 2015 was without jurisdiction and rendered the arbitral proceedings void ab initio, and whether an executing court could examine such an objection when the award itself had not been challenged.

The judgment-debtors relied on the Supreme Court's 5 January 2026 judgment in Bhadra International (India) Pvt. Ltd. v. Airports Authority of India, arguing that equality, consent, independence and impartiality were fundamental requirements of arbitration under Sections 7 (arbitration agreement), 11 (appointment of arbitrators), 12 (grounds for challenging an arbitrator) and 18 (equal treatment of parties) of the Arbitration and Conciliation Act.

They argued that Section 12(5), introduced with effect from 23 October 2015, expressly disqualifies persons falling within the categories mentioned in the Seventh Schedule from acting as arbitrators unless parties waive the disqualification through an express written agreement after the dispute arises.

Paisalo Digital, on the other hand, contended that Section 12(5) read with the Seventh Schedule operated prospectively and could not invalidate appointments made in arbitrations commenced before 23 October 2015. It further argued that parties who failed to challenge the appointment during arbitration or seek setting aside of the award under Section 34 could not raise such objections during execution.

Amicus curiae, Jay Sanklecha, assisting the Court by identifying three categories of unilateral appointments: where the agreement named the arbitrator, where the agreement authorised one party to appoint the arbitrator, and where one party appointed an arbitrator despite having no contractual authority and without the other party's consent.

Accepting the distinction, the Court held that the 2015 amendment introduced a statutory disqualification under Section 12(5) read with the Seventh Schedule only from 23 October 2015. It observed that before the amendment, a party could challenge an arbitrator's independence or impartiality under Section 12(3), follow the procedure under Section 13, raise jurisdictional objections under Section 16 and challenge the award under Section 34. It also held that a party which neither challenged the arbitrator nor the award waived the objection under Section 4 and could not resist enforcement proceedings at a later stage. The Bench observed:

“If a party had any apprehension that any provision of the Act or basic tenets of arbitral proceedings were not followed or were being violated then such a party always had a remedy to challenge the same in accordance with law and if such a challenge is upheld, then certainly the proceedings would be bad in law but if such a challenge is unsuccessful then the party is estopped from making such a grievance during execution proceedings.”

Justice Jain also held that accepting the judgment-debtors' objections would indirectly apply the post-2015 disqualification regime to earlier appointments. He observed that Parliament could have expressly made Section 12(5) and the Fifth and Seventh Schedules retrospective but had not done so. He reiterated that “what cannot be done directly cannot be achieved by interpretative process indirectly.”

Further, the Bench clarified that the Supreme Court's ruling in Bhadra International concerned arbitration proceedings invoked after 23 October 2015 and could not be interpreted as retrospectively invalidating all earlier contractual appointments.

Accordingly, the High Court concluded that an executing court may treat a pre-2015 arbitral award as void only where the arbitration agreement neither named an arbitrator nor authorised one party to appoint an arbitrator, and the appointment was made without the other party's consent. It added that even in such cases, an executing court cannot declare the award void where the appointment challenge had already failed.

It directed the connected matters to be listed on 15 September 2026 for further consideration.

Appearances for applicant: Advocates Devesh Khara, Abhinav Kalia, Devesh Dubey, Shoumya Sahu, Akhilesh Nair, Bismit Nayak, Lakshya Bhatia and Devendra Kumar Singh, instructed by DKL Advocates.

Appearances for respondent nos. 2 and 3 in Interim Application No. 2009 of 2026: Advocate Mehul Rathod.

Appearances for respondent-judgment debtor in Interim Application No. 2015 of 2026: Senior Advocate Ashish Kamat with Advocates Shivanee Srivastava, Varun V. Dhonde, Henna Daulay and Gunjan Shah, instructed by G.S. Legal.

Amicus Curiae: Advocate Jay Sanklecha.