Alternative Dispute Resolution

Bhadra International (India) Pvt. Ltd. v. Airports Authority of India

2026 INSC 6

Facts

Bhadra International and Novia International formed a consortium to provide ground-handling services.
Airports Authority of India awarded the consortium two licences in 2010.
Clause 78 provided for arbitration by a sole arbitrator appointed by the Chairman of AAI.
Disputes arose, and the consortium requested AAI to appoint the arbitrator under the clause.
AAI’s Chairman made the unilateral appointment.
At an initial procedural meeting, the minutes recorded that neither party objected.
Both sides participated in the proceedings.
They jointly sought extensions under Section 29A.
In 2018, the arbitrator issued nil awards, rejecting the claims and counterclaims.
Bhadra later challenged the awards and argued that the unilateral appointment was void.
The Delhi High Court held that:
the appointment followed Bhadra’s own request;
Bhadra had participated without objection;
it had consented in procedural minutes; and
the challenge came too late.
The matter reached the Supreme Court.

Whether an appointment becomes bilateral merely because the claimant requested invocation of the clause.
Whether participation and procedural minutes constitute waiver under Section 12(5).
Whether unilateral-appointment invalidity may be raised at the Section 34 stage.

A notice invoking arbitration under Section 21 merely activates the dispute-resolution process.
It does not amount to consent to the other party’s exclusive choice of arbitrator.
A unilateral sole-arbitrator appointment by an interested party is invalid.
Section 12(5) waiver requires:
an express agreement;
in writing;
after disputes have arisen;
demonstrating conscious knowledge and abandonment of the neutrality objection.
Mere:
silence;
participation;
procedural cooperation;
joint extension applications; or
a general statement of “no objection” does not necessarily satisfy the statutory waiver standard.
De jure ineligibility may be raised even at the award-challenge stage where no valid waiver occurred.

Bhadra’s appointment request did not select or approve the particular arbitrator.
It only called upon AAI to set the arbitration clause in motion.
The High Court therefore erred in treating invocation as consent to unilateral constitution.
AAI remained the sole source of the arbitrator’s appointment.
The structure was invalid under:
TRF;
Perkins Eastman; and
CORE.
The Court then examined waiver.
The procedural minutes recorded that the parties had no objection to the arbitrator.
However, a statutory waiver requires more than passive or general acceptance.
It should show that:
the parties understood the Section 12(5) disqualification;
the disputes had already arisen;
they consciously chose to disregard the defect; and
that choice was expressly recorded in writing.
The minutes did not satisfy this standard.
Continued participation and Section 29A extension applications similarly did not validate the tribunal.
Parties may cooperate to avoid procedural prejudice without surrendering a mandatory statutory protection.
The Court held that an award issued by a tribunal constituted through an invalid unilateral appointment is fundamentally defective.
The objection was not barred merely because it was developed or amended during Section 34 proceedings.
The tribunal’s authority must rest upon lawful constitution.
Bhadra therefore could raise the point at the post-award stage.
The case gives the strongest recent statement that implied waiver cannot rescue a unilateral sole-arbitrator appointment.

The Supreme Court allowed Bhadra’s appeals and held the unilateral appointment invalid.
The awards resulting from that appointment could not survive.
Invocation, participation and procedural minutes did not constitute the required express post-dispute written waiver.
Use this case for: even prolonged participation does not cure a unilateral appointment without a clear and conscious written waiver under Section 12(5).