Unilateral Appointment of Arbitrator by One Party Is Invalid: Award Set Aside; Fresh Appointment Ordered

1. Case Snapshot

• Case Name: Bhalani Book Corporation & Ors. vs Indiabull Housing Finance Limited Company & Ors.

• High Court: High Court of Delhi

• Bench: Hon'ble Mr. Justice Om Prakash Shukla

• Date of Decision: July 22, 2026

• Area of Law: Arbitration – Section 34 of Arbitration and Conciliation Act, 1996; Unilateral Appointment of Arbitrator; Section 12(5)

2. Judgment in Brief

The Delhi High Court set aside an arbitral award on the ground that the Sole Arbitrator was appointed unilaterally by the respondent-lender under a clause conferring exclusive appointment power on it. Following TRF Ltd. v. Energo Engg. Projects Ltd., Perkins Eastman Architects, and Bhadra International v. Airports Authority of India, the Court held that such unilateral appointment is contrary to Section 12(5) of the Arbitration Act and violates the requirement of neutrality and independence. Since there was no express written waiver of Section 12(5), the appointment was legally unsustainable. The Court set aside the award and appointed a new Sole Arbitrator with the consent of both parties.

3. Relevant Facts

• The petitio

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