Can the Other Side Appoint the Arbitrator Alone? Unilateral Appointment and Section 12(5) Ineligibility

A contract clause that lets the other side alone appoint the sole arbitrator, or that forces you to choose from a panel it controls, is not enforceable as written. Section 12(5) of the Arbitration and Conciliation Act 1996, read with the Seventh Schedule, makes a party's own officer ineligible to arbitrate. The Supreme Court in TRF (2017) and Perkins Eastman (2019) held that such a person cannot appoint the arbitrator either, and a Constitution Bench in Central Organisation for Railway Electrification v ECI SPIC SMO MCML (JV), decided on 8 November 2024, held that a unilateral appointment of arbitrator clause offends the equal treatment rule in Section 18 and, in a public-private contract, Article 14 of the Constitution. The practical answer is to object in writing, sign no waiver, and apply to the court under Section 11(6) for an independent appointment. An award already passed by an ineligible arbitrator can be set aside under Section 34, as the Supreme Court confirmed on 5 January 2026 in Bhadra International v Airports Authority of India.

Part of the arbitration and dispute resolution practice at S Jain & Attorneys, Bangalore.

This guide is for a contractor, franchisee, borrower, homebuyer, employee or supplier whose contract with a bank, builder, public sector undertaking, employer or franchisor gives the other side the power to name the arbitrator. It covers arbitrations seated in India. It does not cover the merits of the underlying dispute, foreign-seated arbitrations, or the separate question of whether the dispute can be arbitrated at all.

What does Section 12(5) of the Arbitration Act actually say?

Section 12(5) says that, notwithstanding any prior agreement to the contrary, any person whose relationship with the parties, with counsel, or with the subject-matter of the dispute falls under any of the categories in the Seventh Schedule shall be ineligible to be appointed as an arbitrator. The sub-section was inserted by the Arbitration and Conciliation (Amendment) Act 2015, which Parliament enacted on the recommendation of the 246th Law Commission Report, and it opens with a non obstante clause. That opening phrase is the whole point: the contract you signed years ago is the "prior agreement" that the sub-section overrides.

The Seventh Schedule lists nineteen relationships. The ones that matter in a unilateral appointment dispute are item 1 (the arbitrator is an employee, consultant, advisor or has any other past or present business relationship with a party), item 5 (a manager or director in an affiliate directly involved in the dispute), item 12 (a manager, director or part of the management, or a person with a similar controlling influence, in one of the parties) and item 13 (a significant financial interest in a party or in the outcome). A managing director, chairman or chief engineer of the company on the other side sits squarely inside items 1 and 12. The Schedule closes with an explanation that "close family member" means a spouse, sibling, child, parent or life partner, and that "affiliate" covers every company in the same group.

The proviso is the only exit. Parties may, subsequent to disputes having arisen between them, waive the applicability of Section 12(5) by an express agreement in writing. Three conditions sit in that sentence: the agreement must come after the dispute has arisen, it must be express, and it must be in writing. A later section of this guide explains why almost nothing that happens in an ordinary arbitration satisfies all three.

Section 12(5) has to be read with Section 12(1). When a person is approached for appointment, he must disclose in writing any past or present relationship with, or interest in, any party or the subject-matter that is likely to give rise to justifiable doubts about his independence or impartiality, and anything that would stop him devoting enough time to finish within twelve months. The Fifth Schedule, with thirty-four entries, guides that "justifiable doubts" enquiry, and the Sixth Schedule prescribes the disclosure form. The difference between the two schedules is the difference between a challenge and a disqualification. A Fifth Schedule circumstance gives you a ground to challenge before the tribunal under Section 13. A Seventh Schedule relationship makes the person ineligible by operation of law, and the Supreme Court has repeatedly said that no challenge before the arbitrator is needed in that case.

The Act draws three lines around independence that a reader should keep separate.

Why can an ineligible person not even nominate the arbitrator?

Because the Supreme Court in TRF Ltd v Energo Engineering Projects Ltd, decided on 3 July 2017, held that once a person has become ineligible by operation of law, he cannot nominate another as an arbitrator. The purchase order in that case said that disputes would go to the managing director of the buyer or to a sole arbitrator nominated by him. The supplier objected to that procedure and asked for an arbitrator outside the contract, the buyer refused and nominated a former judge of the Supreme Court as sole arbitrator under the clause, and the High Court upheld the appointment because a former judge is plainly not in the Seventh Schedule.

The Supreme Court disagreed. It said it was not concerned with the objectivity or respectability of the nominee, only with the authority of the managing director. Its words were that it is inconceivable in law that a person who is statutorily ineligible can nominate a person, and that once the infrastructure collapses the superstructure is bound to collapse. The objection was taken in an application under Section 11(6), which is the route this guide recommends when the appointing authority in your clause is an officer of the other party.

Can one party appoint a sole arbitrator through its chairman or managing director?

No. In Perkins Eastman Architects DPC v HSCC (India) Ltd, decided on 26 November 2019, the clause did not make the chief managing director of the respondent company the arbitrator. It gave him the power to appoint a sole arbitrator within thirty days of a request. The Supreme Court held that the person who has an interest in the outcome or decision of the dispute must not have the power to appoint a sole arbitrator, and treated that as the essence of the 2015 amendment as recognised in TRF. Where each side appoints one arbitrator, the advantage a party derives from naming its own nominee is counterbalanced by the equal power of the other party. Where only one party appoints a sole arbitrator, its choice will always carry an element of exclusivity in charting the course of the dispute.

The relief matters as much as the reasoning. The Court annulled the effect of the appointment letter issued by the company, exercised its own power under Section 11(6) to appoint a former judge as sole arbitrator, made that appointment subject to the mandatory declaration under Section 12, and directed that fees under the Fourth Schedule be shared equally. That is the template for what a court does with a unilateral appointment clause: it does not throw out the arbitration agreement, it replaces the tainted appointment with a neutral one.

Key takeaway. The rule from TRF and Perkins is not that your opponent's nominee is biased. It is that a party with an interest in the result has no power to choose the sole judge of that result, however respectable the person chosen.

What did the Constitution Bench decide in CORE v ECI SPIC SMO MCML in November 2024?

Five judges answered three questions on 8 November 2024: whether a party with an interest in the dispute can unilaterally appoint a sole arbitrator or curate a panel and make the other side choose from it, whether the equal treatment principle applies at the appointment stage, and whether a public-private contract allowing a government entity to appoint the sole arbitrator or a majority of the tribunal violates Article 14. The reference arose because a three-judge bench in an earlier round of the same railway dispute, decided on 17 December 2019, had upheld a clause under which the railway sent the contractor at least four names of retired railway officers, the contractor suggested two of them, and the railway's general manager chose one of those two as the contractor's own nominee and then appointed the remaining arbitrators, from the panel or outside it, and named the presiding arbitrator.

The judgment of the Chief Justice, for himself and two other judges, concluded that the principle of equal treatment of parties applies at all stages of arbitration, including the appointment of arbitrators, that the Act does not stop a public sector undertaking from empanelling potential arbitrators but a clause cannot force the other party to select its arbitrator from that panel, that a clause allowing one party to unilaterally appoint a sole arbitrator gives rise to justifiable doubts about independence and impartiality and hinders equal participation, that mandating a choice from a curated panel in a three-member tribunal offends equal treatment because there is no effective counterbalance, and that unilateral appointment clauses in public-private contracts are violative of Article 14. The majority anchored the rule in Section 18, which it noted has been called the due process clause of arbitration and which it treated as a mandatory provision that reaches the constitution of the tribunal, not only the hearing. It also held that a unilateral appointment clause violates the nemo judex rule, which forms part of the public policy of India in the context of arbitration.

Two judges wrote separately. One agreed that equality under Section 18 applies at the appointment stage but did not accept that constitutional law principles should be imported into arbitration, and urged restraint at the threshold stage. The other located the duty to constitute an independent tribunal in Section 23 of the Contract Act, said an agreement that does not enable an independent and impartial tribunal is void as against public policy, and cautioned that a court cannot give an advance declaration that every such clause is void per se, so the text and context of each agreement must be examined when an application comes under Sections 11, 14 or 34. The decision is reported at (2025) 4 SCC 641 and the later Supreme Court judgments discussed below treat it as settled law. A reader who wants the wider picture of how far courts may go at the referral stage can read the guide on judicial interference in arbitration in India.

Does the CORE ruling apply to old contracts and arbitrations already running?

Only partly, and the date of the appointment is what decides it. The majority said in terms that it had upheld TRF and Perkins, which dealt with sole arbitrators and had held the field for years, but had disagreed with Voestalpine and the 2019 CORE decision, which dealt with three-member tribunals. Because giving retrospective effect could nullify innumerable completed and ongoing arbitrations before three-member tribunals, the Bench held that the law laid down in the reference will apply prospectively to arbitrator appointments made after the date of the judgment, and that this direction applies to three-member tribunals.

Put plainly, that means two different clocks. For a sole arbitrator appointed by one party or its officer, the ineligibility has run from the 2015 amendment as explained in TRF and Perkins, and CORE added nothing new to worry about on timing. For a three-member tribunal where the other side forced you to nominate from its panel, an appointment made before 8 November 2024 stands on the earlier law, and an appointment made after that date is governed by CORE. The Supreme Court applied exactly this logic in January 2026 in Bhadra International, where the sole arbitrator had been appointed by the chairman of the authority after a notice of November 2015 and had recorded in March 2016 that neither party objected, and set aside the awards of July 2018 without any prospectivity difficulty.

The other side of the coin appeared in Hindustan Construction Company v Bihar Rajya Pul Nirman Nigam, decided on 28 November 2025. There the High Court itself had appointed the sole arbitrator in 2021 under Section 11(6), the parties had attended more than seventy hearings and jointly extended the mandate under Section 29A, and after CORE the High Court used its writ jurisdiction to unwind its own appointment. The Supreme Court set that aside, held that a court cannot retrospectively invalidate its own appointment order on the strength of a later interpretation of a similar clause in another matter, and directed a substitute arbitrator to continue from the stage reached. The lesson is that CORE is a shield against a tainted appointment, not a reset button for an arbitration that a court already constituted properly.

Is a panel of arbitrators kept by a bank, PSU or builder valid?

A panel can exist, but it cannot be forced on you. In Voestalpine Schienen GmbH v Delhi Metro Rail Corporation, as the Constitution Bench summarised it, the contract required the metro corporation to keep a panel of serving or retired engineers from government departments and public sector undertakings, and for larger disputes to hand the contractor a list of five names from which each side chose one arbitrator. The two-judge bench held that Section 12(5) read with the Seventh Schedule does not bar retired government officers who have no connection with the contracting entity from serving, but directed that the other party must have full freedom to choose from the entire panel rather than a shortlist of five, and that the panel must be broad-based, drawing in engineers from the private sector, judges, lawyers and accountants rather than only former officials.

CORE went further for appointments made after 8 November 2024. Conclusion (b) permits a public sector undertaking to empanel potential arbitrators but says an arbitration clause cannot mandate the other party to select its arbitrator from that panel. Conclusion (d) explains why: in a three-member tribunal the counterbalance that saves party-appointed arbitrators only works if each side chooses freely, and a curated list removes that freedom. So a bank, developer or utility that maintains a panel of retired officers may use it for its own nominee, and may offer it to you, but a clause that compels you to pick from it will not be enforced against you in a post-CORE appointment. A panel from which the other side alone chooses a sole arbitrator was never valid, because that is simply Perkins with an extra step. The guide on institutional versus ad hoc arbitration explains how an institution's own list differs from a party's list, and that difference is exactly the one CORE draws.

What counts as an "express agreement in writing" that waives Section 12(5)?

Only a clear, written agreement made after the dispute arose, in which both parties knowingly give up the objection. Bharat Broadband Network Ltd v United Telecoms Ltd, decided on 16 April 2019, is the starting point. There the appellant's own managing director had appointed the sole arbitrator, the respondent had filed its statement of claim without reservation, and the High Court treated the appointment letter plus the claim statement as an express written waiver and held the appellant estopped. The Supreme Court reversed. It held that the filing of a statement of claim does not mean there is an express agreement in words that both parties wish the ineligible person to continue, that the appointment letter is not a waiver, and that Section 4 of the Act, which deems a party to have waived objections by proceeding without protest, has no application to Section 12(5) because the proviso uses its own express language. The two awards passed while the appeal was pending were set aside.

Bhadra International (5 January 2026) closed the remaining gaps. The Supreme Court held that the right to object to an ineligible arbitrator cannot be taken away by mere implication, that a waiver needs a conscious and unequivocal expression of intent to relinquish it, and that the bar under Section 12(5) can be removed only by a clear, unequivocal and written agreement executed after the dispute has arisen, not by tacit acceptance or procedural participation. It then listed what does not count: a notice invoking arbitration under Section 21, a procedural order recording no objection, the statement of claim, an application for interim relief, and a reply to a correction application under Section 33. It also quoted the November 2025 Hindustan Construction judgment for the proposition that an application to extend the mandate under Section 29A amounts to a valid waiver under Section 4, save in cases of statutory ineligibility under Section 12(5). High Court decisions taking a contrary view were declared overruled.

Signing the original contract is not a waiver for a reason that needs no case law: the proviso requires an agreement made subsequent to disputes having arisen, and Section 12(5) itself opens by overriding any prior agreement. The contract is the prior agreement. The Constitution Bench in CORE added that the same principle of express waiver applies where parties want to waive an allegation of bias against an arbitrator appointed unilaterally, and that after the dispute has arisen the parties can decide whether there is any need to waive the nemo judex rule. A genuine post-dispute waiver is therefore possible, and it is sometimes commercially sensible, but it has to be a signed document that says what it is doing.

Common mistake. Appearing before the unilaterally appointed arbitrator "under protest" and then filing pleadings, evidence and a Section 29A extension application. The protest does not hurt, but the law now says none of that participation waives Section 12(5) anyway, and the real cost is a year of proceedings before a tribunal whose award can be set aside as a nullity. The efficient course is to move the court early, not to run the arbitration twice.

What should you do when the unilateral appointment letter arrives?

Object in writing at once, sign nothing that could be read as consent, and put the appointment before a court rather than before the arbitrator. The sequence below follows the routes the Act and the cases actually provide.

1. Read the arbitration clause and identify the Seventh Schedule item that catches the appointing authority or the named arbitrator. An officer of the other party falls under items 1 and 12. Note whether the clause provides a sole arbitrator or a three-member tribunal, because CORE's prospective direction applies only to the second.
2. Reply to the appointment letter within days. State that the person named is ineligible under Section 12(5) read with the Seventh Schedule, that a person who is ineligible cannot nominate another under TRF, that an interested party cannot appoint a sole arbitrator under Perkins and CORE, and that you do not waive the objection. Propose two or three neutral names or an arbitral institution and ask for agreement within a stated time.
3. Do not sign any consent letter, joint memo, procedural order or "no objection" endorsement that an arbitrator or the other side circulates at a first hearing. Bhadra International directs arbitrators to insist on a written waiver at the first hearing precisely because that document is the only thing that can cure the appointment.
4. If the other side refuses to agree on a neutral, file an application under Section 11(6) before the High Court whose jurisdiction covers the seat, or before the Supreme Court if the arbitration is an international commercial arbitration. Plead that the agreed procedure has failed because the appointing authority is disqualified, and ask the court to appoint an independent arbitrator after the disclosure required by Section 11(8).
5. If the arbitrator has already entered on the reference, apply to the court under Section 14(2) for a declaration that his mandate has terminated under Section 14(1)(a) because he is de jure unable to act, and for the appointment of a substitute. Bharat Broadband and Bhadra International both say you need not first challenge under Section 13 before the tribunal in a Seventh Schedule case.
6. Keep every letter, email and procedural order. If the arbitration nevertheless proceeds, repeat the reservation in the statement of defence and at each stage, so that the record shows no express written agreement was ever made.
7. If an award is passed, file the setting-aside application under Section 34 within three months of receiving the award, or within the further thirty days that Section 34(3) allows on sufficient cause, pleading that an award by an ineligible arbitrator is a nullity and conflicts with the public policy of India.

Deadline warning. Two clocks run in different directions. A Fifth Schedule challenge must reach the tribunal within fifteen days of learning of the circumstance under Section 13(2). A Seventh Schedule ineligibility has no such window because the mandate terminates by operation of law, but once an award is passed the Section 34(3) period of three months, extendable by thirty days at most, applies to the challenge like any other.

Section 11, Section 13, Section 14 or Section 34: which route applies?

It depends on how far the arbitration has travelled. Before any arbitrator has taken office, Section 11(6) is the route: where a party fails to act under the agreed procedure, or a person entrusted with a function under it fails to perform it, the court appoints. TRF and Perkins were both decided in Section 11(6) applications and the Court in each case treated an ineligible appointing authority as a failure of the agreed procedure. The Constitution Bench observed that at the Section 11 stage a referral court examines the existence of the arbitration agreement and that a contested question about the validity of an appointment procedure needing detailed evidence can be left to the tribunal under the competence-competence doctrine. That observation sits alongside Perkins, which the same Bench upheld and in which the Supreme Court itself annulled a unilateral appointment in a Section 11 application, so a well-framed petition pleads the ineligibility as a matter of law on the face of the clause and asks for an independent appointment, rather than inviting a trial on bias. The earlier guide on appointment of an arbitrator under Section 11 covers the mechanics of the petition itself.

Once the arbitrator is in office, Section 13 is the wrong door for a Seventh Schedule objection. Section 13(2) sends a written challenge to the tribunal within fifteen days, Section 13(3) leaves the decision on that challenge to the tribunal itself, which in a sole-arbitrator case means the challenged arbitrator, and Section 13(4) and (5) then push the losing party to the award and a Section 34 petition. That procedure is designed for Fifth Schedule doubts that need findings of fact. For ineligibility, Bharat Broadband held that Section 14(1)(a) is attracted because the arbitrator becomes de jure unable to perform his functions, his mandate terminates automatically, and if a controversy remains a party applies to the court under Section 14(2). Bhadra International repeated that in all Section 12(5) cases there is no challenge procedure to be availed of, and that the questions a Section 14 court typically decides are whether the person falls within the Seventh Schedule and whether there is a proviso waiver. After the award, Section 34 is the only door, and the next section explains what happens there.

What happens to an award already passed by a unilaterally appointed arbitrator?

It can be set aside as a nullity, and the objection can be raised for the first time in the Section 34 petition. In Bhadra International the sole arbitrator had been appointed by the chairman of the authority under a clause that even said it would be no objection that the arbitrator was a servant of the authority. The claimant had invoked arbitration, recorded no objection in the first procedural order, filed its claim, applied for interim relief and taken part for more than two years, and the High Court held that it had submitted to the jurisdiction and could not object after losing. The Supreme Court disagreed on every point. It held that once an award is passed the mandate of the tribunal ends and no substitution is possible, so the aggrieved party challenges the award under Section 34, and that an award passed by an ineligible arbitrator is a nullity, non est and void ab initio, and against the public policy of India. It relied on the Constitution Bench's explanation that the fundamental policy of Indian law includes compliance with statutes, precedents and natural justice, and that the most basic notions of morality and justice under Section 34 include bias. The awards were set aside and the parties were left free to start fresh arbitration in accordance with law.

The Court also held that a challenge to an arbitrator's ineligibility can be raised at any stage, because an arbitrator without jurisdiction cannot make an award on the merits, and it drew an analogy with decrees passed by a court lacking inherent jurisdiction, which can be questioned even in execution. Two cautions follow. First, the analogy does not extend the Section 34(3) limitation, which still governs when a setting-aside petition must be filed, so the guide on the Section 34 limitation period remains essential reading. Second, an interim award suffers the same fate as a final one, since a tribunal that is a nullity cannot produce an enforceable interim award either. The general grounds and procedure for a challenge are covered in the guide on setting aside an arbitral award under Section 34. Two grounds in Section 34 are engaged. Section 34(2)(a)(v) allows an award to be set aside where the composition of the tribunal was not in accordance with the parties' agreement unless that agreement conflicted with a provision from which the parties cannot derogate, and the Constitution Bench treated Section 12(5) and Section 18 as exactly such mandatory provisions. Bhadra itself rested on the public policy ground in Section 34(2)(b)(ii), holding that an award by an ineligible arbitrator conflicts with the public policy of India.

How do you draft an arbitration clause that survives Section 12(5) and CORE?

Take the appointment out of either party's hands. The cleanest clause refers the appointment of a sole arbitrator to a named arbitral institution under its rules, or provides that the parties will try to agree a sole arbitrator within thirty days of a request and, failing agreement, that the appointment will be made under Section 11 by the court. Both routes satisfy the equal treatment principle because neither party controls the choice. For a three-member tribunal, the statutory default in Section 11(3), under which each party appoints one arbitrator and the two appointees choose the presiding arbitrator, is the counterbalanced structure that TRF, Perkins and CORE all accept, provided the clause does not restrict either party's nominee to a list curated by the other. Section 11(8) requires a court making a default appointment to obtain the Section 12(1) disclosure and to have due regard to securing an independent and impartial arbitrator, so the clause should impose the same disclosure requirement on any appointment made under it.

Avoid four drafting habits that the cases have condemned. Do not name an officer of a party as arbitrator or as the person who appoints one. Do not give one side a panel from which the other must choose, whether for a sole arbitrator or for its nominee on a three-member tribunal. Do not write that it will be no objection that the arbitrator is an employee of a party or has dealt with the matter, because Section 12(5) overrides that sentence and Bhadra International treated the very same wording as a nullity. And do not build the clause so that arbitration collapses if the one-sided procedure fails, because a clause that forecloses arbitration altogether when the tainted route cannot be followed raises a separate and harder question that was argued in Hindustan Construction. A public sector undertaking or bank that wants technical arbitrators can still keep a broad-based panel and offer it, so long as the other party remains free to look outside it. The guide on how to draft an arbitration clause in India covers seat, language and the number of arbitrators, and this section adds the appointment mechanics that the 2015 amendment and the Constitution Bench now require.

Three things separate a clause that will be enforced from one that will be rewritten by the court.

How long does a Section 11 application take and what does it cost?

Only indicative ranges are honest here. A Section 11(6) petition in a High Court is a summary proceeding, but listing and hearing times vary widely between courts, and a contested petition where the other side defends its clause commonly takes several months to a year to reach an order. A Section 14(2) application to terminate a sitting arbitrator's mandate moves on a similar timetable. Costs are driven by professional fees rather than court fees, and they depend on the value in dispute and the number of hearings. Set against that, an arbitration run to award before a unilaterally appointed sole arbitrator and then set aside under Section 34 means the tribunal's fees, counsel's fees and a year or more of time spent twice, which is the comparison that should drive the decision to go to court early. The related guide on the Section 29A twelve-month deadline explains how mandate extensions interact with these timelines.

A note from practice

The unilateral appointment letter almost always arrives with a tight deadline, a distinguished name and a first hearing already fixed, and the temptation is to attend and see how the arbitrator behaves. In practice that first hearing is where the damage is done, because a procedural order recording that neither party objects, or a joint memo on procedure, is precisely the kind of document the other side later waves as a waiver. The law after Bharat Broadband and Bhadra International is that such documents do not amount to an express agreement in writing, but the argument still has to be fought, and fighting it after an adverse award is expensive. The better habit is unglamorous: a short, courteous letter on the day the appointment arrives, naming the Seventh Schedule item, proposing neutrals or an institution, and reserving the objection, followed by a Section 11 petition if the reply is a refusal. Where the arbitrator is already sitting, the same letter goes to the tribunal with a request that it record the objection and, if it will not withdraw, a Section 14(2) application follows. None of this requires proving that anyone is actually biased, and it is a mistake to plead bias, because the whole point of Section 12(5) is that ineligibility is decided by the relationship, not by the conduct.

Frequently Asked Questions

This article is for general informational purposes only and does not constitute legal advice. Consult a qualified advocate for advice on your specific situation.

Related Guides

Objections to a unilaterally appointed arbitrator, Section 11 petitions and Section 34 challenges are handled within the firm's arbitration and dispute resolution practice, alongside its wider civil litigation practice.

• Appointment of Arbitrator Under Section 11: A Guide
• Setting Aside an Arbitral Award Under Section 34
• Section 34 Limitation Period: When the Clock Starts
• How to Draft an Arbitration Clause in India
• Institutional vs Ad Hoc Arbitration in India: A Guide
• Judicial Interference in Arbitration in India: Explained
• Section 29A: The Twelve-Month Deadline to Make an Arbitral Award