Participation Or Counter-Claim Cannot Substitute Waiver U/S 12(5) A&C Act: Delhi High Court Sets Aside Award Over Unilateral Appointment Of Retired PWD Official
The Court set aside arbitral award and Section 34 order, and held that the objection raised in written submissions must still be examined.
The Delhi High Court has held that participation in arbitral proceedings, filing a statement of defence or counter claim, or failing to object before the arbitrator cannot substitute the statutory waiver under the proviso to Section 12(5) of the Arbitration and Conciliation Act, 1996. Such waiver requires an express agreement in writing made after the dispute has arisen.
The Division Bench allowed an appeal by the Government of NCT of Delhi and set aside an arbitral award along with the Section 34 order upholding it. It held that the unilateral appointment of a retired PWD Principal Chief Engineer as sole arbitrator was invalid, so the award could not be sustained, while it did not examine the appellant’s other challenges to the award.
A Bench of Justice Anil Kshetarpal and Justice Bharat Parashar observed, “…there is nothing on record to show that subsequent to the disputes having arisen, the parties entered into any express agreement in writing whereby they consciously waived off the applicability of Section 12(5) of the A&C Act. Thus, participation in the arbitration proceedings or filing of statement of defence or counter claim or failure to raise an objection before learned Arbitrator in this regard cannot be treated as a substitute for such statutory waiver”.
“…merely because the Appellant had participated in the arbitral proceedings or had failed to raise such an objection at any earlier stage of the proceedings cannot make such an appointment to be valid”, it noted.
Advocate J.M. Kalia appeared for the appellant and Advocate Kunwar Chandresh appeared for the respondent.
PWD awarded the contractor, M/s Ram Krishan Yudhister Prakash, the construction of Aam Aadmi Mohalla Clinics for about Rs. 2.96 crore. Work stipulated for completion by April 26, 2019 finished on March 16, 2020. On the contractor’s claims for escalation, extended-period expenses and others, the Chief Engineer (E) nominated a retired Principal Chief Engineer of PWD as sole arbitrator on October 18, 2023. The Award dated January 20, 2025 favoured the contractor.
The Government’s Section 34 petition was dismissed on May 8, 2026 by the District Judge (Commercial), North-East. The court observed that the arbitrator was appointed with the petitioner’s concurrence and that it had participated. The Section 12(5) ground was raised only in written submissions before that court.
Relying on its decision in M/S Ahluwalia Contracts (India) Ltd. v. Airports Authority of India, the Bench reiterated that waiver must be subsequent to the dispute, by agreement, and express and in writing. Those authorities establish that a party’s own appointment does not preclude it from objecting. There was no written waiver on record.
The Court observed that the objection was raised before the Section 34 court, which discarded it merely because the petitioner had participated. It added that an objection going to the tribunal’s inherent jurisdiction may be raised at any stage of challenge to the award.
Cause Title: Govt of NCT of Delhi v. M/s. Ram Krishan Yudhister Prakash (Neutral Citation: 2026:DHC:9641-DB)
Appearances:
Appellant: Advocates J.M. Kalia, Siddhartha Shukla, Satender Kumar, Dhruv Kalia and Sanjay Prabhakar.
Respondent: Advocates Kunwar Chandresh, Poonam Prasad, Divyansh Singh, Daleep Kumar Sah and Raj Tiwari.