Arbitration Proceedings Before An Ineligible Arbitrator Are Void: Telecommunication Consultants India Ltd V Shivaa Trading*

The Delhi High Court set aside an award passed by an arbitrator who was ineligible for appointment. Such an arbitrator inherently lacks jurisdiction and the arbitration proceedings conducted by him are void.

Background

A memorandum of understanding (MoU) was entered between Telecommunications Consultants India (TCI) and Shivaa Trading (ST) for the construction of rural roads in Madhya Pradesh. The MoU contained an arbitration clause, which empowered the Chairman and Managing Director of TCI to unilaterally appoint a sole arbitrator.

Disputes arose between the parties and arbitration was invoked by TCI. TCI appointed the sole arbitrator and claimed damages from ST, which filed a counterclaim against TCI. The arbitrator dismissed both TCI's claim and ST's counterclaim.