Named as arbitrator by the Delhi government’s own Public Works Department, the arbitrator went on to hear a contractor’s claims while the government defended and counterclaimed. None of that, the Delhi High Court has held, replaces the express written waiver Section 12(5) demands, and the Mohalla Clinic arbitration award cannot stand.
New Delhi: The Delhi High Court has found invalid the appointment of a sole arbitrator whom the Public Works Department itself had named, because nothing on record showed an express agreement between the parties, made after their dispute arose, waiving the statutory restriction on such an appointment, and has accordingly allowed the Government of NCT of Delhi’s challenge to the award [Govt of NCT of Delhi v. M/s. Ram Krishan Yudhister Prakash].
A Division Bench of Justice Anil Kshetarpal and Justice Bharat Parashar delivered the judgment on October 31, 2026. It set aside both the January 20, 2025 arbitral award and the Commercial Court’s May 8, 2026 judgment rejecting the government’s Section 34 petition.
What Section 12(5) demanded
The contractor’s position was that the appointment followed the parties’ agreement, had been made by the department itself, and was questioned only after the government had taken part in the arbitration and lost. The Commercial Court rejected the appointment objection by pointing to the government’s concurrence and participation.
The High Court held that this reasoning did not meet the test in Section 12(5). It followed its September 25, 2026 decision in M/s Ahluwalia Contracts (India) Limited v. Airports Authority of India, reproducing the reasoning on the need for an express written agreement after disputes arise. The discussion also addressed the Supreme Court’s decisions in Bhadra International (India) Pvt. Ltd. v. Airports Authority of India and Bharat Broadband Network Ltd. v. United Telecoms Ltd., (2019) 5 SCC 755.
In paragraph 17, the Bench found nothing on record to show that the parties had consciously waived Section 12(5) through such an agreement. Filing a defence or counterclaim, taking part in the proceedings, or failing to object before the arbitrator could not stand in for that waiver.
A late objection, and why it was open
The appointment objection did not feature in the original Section 34 petition. It was, however, specifically raised in the government’s written submissions before that petition was decided, and in paragraph 18 the High Court held that the Commercial Court had not addressed it properly. Neither the government’s earlier participation nor its failure to object sooner, the Bench said, validated the appointment.
Paragraph 19 records that an objection going to the tribunal’s inherent jurisdiction may be raised at any stage of a challenge to the award. The judgment thus rejects the proposition that the appointing party’s conduct, by itself, supplies the written statutory waiver.
The contract and the appointment
PWD had given the contractor the work of constructing Aam Aadmi Mohalla Clinics at various locations under its North-East Circle, at an agreed contract amount of Rs 2,96,84,753. The work was due to finish on April 26, 2019 and was completed on March 16, 2020.
The contractor later sought payments under several heads, among them escalation, watch and ward expenses, additional work and expenses during the extended contract period. On October 18, 2023, PWD nominated its retired Principal Chief Engineer, Avendra Kumar Garg, as sole arbitrator under the contractual arbitration clause.
The government filed a defence and a counterclaim. After the award went in the contractor’s favour, it challenged the award on grounds including an alleged failure to decide the counterclaim and departures from the contract. Those were the government’s allegations; the High Court ultimately disposed of the appeal on the appointment issue.
Where this leaves the dispute
Having found the unilateral appointment invalid for want of an express written waiver after the dispute arose, the Bench held that the award built on it could not survive. It allowed the appeal without deciding the government’s remaining objections to the award and made no order as to costs.
The ruling applies the waiver requirement to a challenge brought by the very party that made the appointment. It does not determine whether the contractor’s individual monetary claims were otherwise justified.
Case Title: Govt of NCT of Delhi v. M/s. Ram Krishan Yudhister Prakash
Case Number: FAO (COMM) 198/2026; CM APPL. 46848/2026
CNR: DLHC010321452026
Court and Bench: Delhi High Court; Justices Anil Kshetarpal and Bharat Parashar
Reserved: October 27, 2026
Pronounced and Uploaded: October 31, 2026
Outcome: Appeal allowed; award dated January 20, 2025 and judgment dated May 8, 2026 set aside; no order as to costs.