M/S Kmv Projects Ltd v. M/S Hscc India Ltd & ANR.
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IN THE HIGH COURT OF DELHI AT NEW DELHI
+ ARB.P. 1888/2025 M/S KMV PROJECTS LTD .....Petitioner Through: Mr. Avinash Trivedi, Adv. Ms. Ritika Trivedi, Adv. Mr. Rahul Aggarwal, Adv. Mr.
Anurag Kaushik, Adv. Mr. Rhythem Nagpal, Adv. Mr. Jatin Arora, Adv. Mr. Rishank Gola, Adv.
versus M/S HSCC INDIA LTD & ANR.
.....Respondents Through:
Mr.
Harshit Agarwal and Mr.
Aasheesh Gupta Advocates for R1 Mr. Vikram Jetly, CGSC with Mr. Kushagra Sachdeva, Adv. for R2
CORAM:
HON'BLE MR. JUSTICE JASMEET SINGH
O R D E R
% 04.12.2025 1.
This is a petition filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 seeking appointment of an Arbitrator for adjudication of disputes between the parties. 2.
The brief facts are that the petitioner participated in the tender for the execution of the work of "Construction of Residential Complex & OPD Block at All India Institute of Medical Sciences, Mangalgiri, Guntur (AP) including internal & external Electrical, HVAC, PHE, firefighting, external development, etc. and their Maintenance during Defect Liability Period" and was declared as the successful participant. 3.
Subsequently, the respondent No. 1 issued an Acceptance Letter dated 30.08.2017 in favour of the petitioner, pursuant to which an Agreement The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above.
dated 29.09.2017 was entered into between the petitioner and respondent No. 1. The respondent No. 1 is the executing agency on behest of respondent No. 2 for the execution of the present work. 4.
The General Conditions of the Contract of the said Agreement contains an arbitration clause being Clause No. 25, which is extracted below:- The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above.
5.
Since disputes arose between the parties, the petitioner invoked arbitration vide legal notice dated 13.08.2025. The respondent No. 1 vide letter dated 12.09.2025 replied to the said notice and shared a panel of Arbitrators in CPWD and asked the petitioner to select 5 names based on which a Sole Arbitrator on mutual consent be appointed.
6.
The same was not acceptable to the petitioner and hence, filed the present petition.
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7.
The conduct of the respondent is contrary to the judgment of Central Organisation for Railway Electrification v. ECI SPIC SMO MCML (JV), (2025) 4 SCC 641, wherein Hon'ble Supreme Court categorically held that Public Sector Undertakings (PSUs) cannot mandate that the other party appoint their nominee Arbitrator from the panel curated by PSUs, as the same is against the principles of equal participation as inscribed in the 1996 Act. The relevant paragraphs from the said judgement read as under:- "130. In comparison, a three-member Arbitral Tribunal usually allows each party to nominate one arbitrator of their choice, with the third arbitrator being appointed either by the two party-appointed arbitrators or by agreement of parties. [Id, p. 211.] The fact that both parties nominate their respective arbitrators gives them "a sense of investment in the Arbitral Tribunal" [Id, p. 211.] . A three-member Arbitral Tribunal also enhances the quality of the adjudicative deliberations and ensures compliance with due process. .....
131. In a three-member tribunal, each of the parties seeks to appoint a co-arbitrator. However, the third arbitrator is usually appointed by a process which allows equal participation of both parties in the appointment process. The equal participation of parties enables the appointment of an independent and impartial third arbitrator. Hence, any perceived tilt of an arbitrator in favour of the party which nominated that the arbitrator is offset by the appointment of the third arbitrator in the course of a deliberative process involving both the The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above.
arbitrators or as envisaged in the agreement between the parties. Perkins [Perkins Eastman Architects DPC v. HSCC (India) Ltd., (2020) 20 SCC 760] rightly observed that whatever advantage a party may derive by nominating an arbitrator of its choice would get counterbalanced by equal power with the other party. [Perkins Eastman Architects DPC v. HSCC (India) Ltd., (2020) 20 SCC 760, para 16] This counterbalancing will ideally apply only in situations where the arbitrators are appointed by the parties in the exercise of their genuine party autonomy. TRF [TRF Ltd. v. Energo Engg. Projects Ltd., (2017) 8 SCC 377 : (2017) 4 SCC (Civ) 72] and Perkins [Perkins Eastman Architects DPC v. HSCC (India) Ltd., (2020) 20 SCC 760] have been relied upon by this Court on numerous occasions, including in Glock Asia-Pacific Ltd. v.
Union of India [Glock Asia-Pacific Ltd. v. Union of India, (2023) 8 SCC 226, para 20 : (2023) 4 SCC (Civ) 36] and Lombardi Engg. Ltd. v. Uttarakhand Jal Vidyut Nigam Ltd. [Lombardi Engg. Ltd. v. Uttarakhand Jal Vidyut Nigam Ltd.
132. In Voestalpine [Voestalpine Schienen GmbH v. DMRC Ltd., (2017) SCC :
(2017) SCC (Civ) 607] and CORE [Central Organisation for Railway Electrification v. ECI-SPIC-SMO-MCML (JV), (2020) 14 SCC 712] , one of the parties curated a panel of arbitrators and mandated the other party to select their arbitrator from the panel. Since the curation of the list is exclusively undertaken by The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above.
one party, the other party is effectively excluded from the process of curating the panel from which exclusively, the appointment of an arbitrator is to be made. The other party has to mandatorily select its arbitrator from a curated panel, restricting their freedom to appoint an arbitrator of their choice. This is against the principle of equal treatment contained under Section 18. In this situation, there is no effective counterbalance because both parties do not participate equally in the process of appointing arbitrators. The party curating the panel can restrict the choice of the party only to a person who is on the panel selected by the other party and to no other person.
133. Many PSUs are regularly involved in arbitration disputes and constantly need the services of arbitrators. Such institutions often maintain a pool of potential arbitrators with the sole object of having a ready pool of qualified professionals who have committed their time and consented to act as arbitrators for fixed fees. The Arbitration Act does not prohibit parties to an arbitration agreement from maintaining a curated panel of potential arbitrators. However, the problem arises when the PSUs make it mandatory for other parties to select their nominees from the curated panel of arbitrators. When a PSU exercises its discretion to curate a panel, the very factor that the PSU is choosing only a certain number of persons as potential arbitrators and not others will raise a reasonable doubt in the mind of a fair-minded person. The PSUs may conceivably have The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above.
nominated a person on the panel of potential arbitrators because they have a certain predisposition in favour of the former. This doubt is reinforced when the other party is given no choice but to select its arbitrator from the curated panel.
134. In CORE [Central Organisation for Railway Electrification v. ECI-SPIC-SMO-MCML (JV), (2020) 14 SCC 712] , the three-member tribunal was sought to be constituted in the following manner : (i) the Railways would suggest at least four names of retired railway officers; (ii) the contractor would select two names out of the panel for appointment as their arbitrator; (iii) The General Manager (of the Railways) would thereafter choose at least one person out of the two to be appointed as the contractor's arbitrator; and (iv) The General Manager would proceed to appoint the balance arbitrators from the panel or outside the panel and also indicate the presiding arbitrator.
135. Such an arbitrator-appointment clause is likely to give rise to justifiable doubts as to the independence and impartiality of arbitrators for two reasons : (i) the contractor is restricted to choosing its arbitrator from the panel of four arbitrators nominated by the party who is a disputant; and (ii) the contractor's choice is further constrained because it is made subject to the decision of the General Manager who will choose one among the two persons suggested by the party. Since the contractor has to select its arbitrator from a curated panel, the arbitration clause does not allow the contractor equal The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above.
participation in the appointment of their arbitrator. Moreover, the clause allows the General Manager to appoint the balance arbitrators from either the panel or outside the panel. Thus, the process of appointing the arbitrators is unequal because the General Manager can go beyond the panel of four potential arbitrators, while the contractor is bound by the names enlisted in the panel.
136. In a three-member tribunal, the independence and impartiality of a third or presiding arbitrator are prerequisites to the integrity of the arbitral proceedings. In CORE [Central Organisation for Railway Electrification v. ECI-SPIC-SMOMCML (JV), (2020) 14 SCC 712] , the arbitration clause allowed the General Manager to unilaterally nominate the Presiding Officer out of the panel of three arbitrators. The clause does not countenance any participation from the contractor in the process of appointing or nominating the Presiding Officer.
Thus, the process of appointing and nominating the Presiding Officer is unequal and prejudiced in favour of the Railways. The fact that the General Manager is nominating the Presiding Officer gives rise to a reasonable doubt about the independence and impartiality of the entire arbitration proceedings.
137. Given the above discussion, it needs reiteration that the Arbitration Act does not prohibit PSUs from empanelling potential arbitrators. However, an arbitration clause cannot mandate the other party to select its arbitrator from the panel The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above.
curated by PSUs. The PSUs can give a choice to the other party to select its arbitrators from the curated list provided the other party expressly waives the applicability of the nemo judex rule."
(Emphasis added) 8.
The parties agree that a person with legal background may be appointed as an arbitrator.
9.
I am satisfied that there is a valid arbitration clause and disputes between the parties which need to be adjudicated through arbitral mechanism.
10. Consequently, the petition is allowed and the following directions are issued:- i) Mr. Justice Rajiv Shakdher (Retd. Chief Justice of High Court of Himachal Pradesh) (Mob. No. 9717495004) is appointed as a Sole Arbitrator to adjudicate the disputes between the parties.
ii) The arbitration will be held under the aegis and rules of the Delhi International Arbitration Centre, Delhi High Court, Sher Shah Road, New Delhi (hereinafter, referred to as the 'DIAC').
iii) The remuneration of the learned Arbitrator shall be in terms of DIAC (Administrative Cost and Arbitrators' Fees) Rules, 2018.
iv) The learned Arbitrator is requested to furnish a declaration in terms of Section 12 of the Act prior to entering into the reference.
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v) It is made clear that all the rights and contentions of the parties, including as to the arbitrability of any of the claim, any other preliminary objection, as well as claims/counter-claims and merits of the dispute of either of the parties, are left open for adjudication by the learned Arbitrator.
vi) The parties shall approach the learned Arbitrator within two weeks from today.
11. The present petition is disposed of in the aforesaid terms. JASMEET SINGH, J DECEMBER 4, 2025 / (MS) The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above.