Safiya Malik

The High Court of Kerala Single Bench of Justice M.A. Abdul Hakhim allowed an Arbitration Request by appointing a new arbitrator to resolve a contractual dispute under an agreement between the petitioner and a government enterprise. The Court directed that the arbitration proceedings shall commence afresh, following the invalidation of a previous arbitral award. The prior appointment of an arbitrator by one party without written agreement from the other was deemed contrary to law. The Court acknowledged the existence of a binding inter partes judgment which had set aside the earlier award, rendering the entire arbitral process void ab initio. Consequently, the newly appointed Arbitrator is to entertain all issues raised by the parties independently and without reliance on the earlier proceedings. The petitioner’s request to continue from the stage of concluded evidence was not accepted by the Court, which maintained that any decision on the admissibility of such evidence rests solely with the new Arbitrator.

The Arbitration Request was initiated by the petitioner, a government contractor aged 66 years, based on an agreement dated 31-7-2013 with a government enterprise. The petitioner initially invoked the arbitration clause in the agreement and an arbitrator was appointed by the Managing Director of the respondent company. The arbitrator completed the proceedings and passed an award dated 18-8-2021.

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Subsequently, the same respondent who had appointed the arbitrator challenged the validity of the award before the Commercial Court under Section 34 of the Arbitration and Conciliation Act. The challenge was premised on the argument that the appointment was invalid since it was made unilaterally by one of the parties to the agreement without the written consent of the other. The Commercial Court, upon review, upheld this challenge and set aside the arbitral award via an order dated 29-11-2023 in A.O.P. No.127/2021.

Following this, the petitioner challenged the Commercial Court’s decision before the High Court in O.P.(C) No.316/2024. However, the High Court upheld the Commercial Court’s findings and dismissed the challenge as per order dated 26-3-2025.

In light of the above developments, the petitioner approached the High Court with the current Arbitration Request, seeking appointment of a fresh arbitrator under Section 11(6) of the Arbitration and Conciliation Act.

The respondents filed objections opposing the petitioner’s prayer, primarily disputing the request that the newly appointed arbitrator should continue the proceedings from where the previous arbitrator had concluded. The petitioner, in his reply to the counter affidavit, maintained that extensive documentary evidence had already been submitted and three witnesses had been examined before the earlier arbitrator.

At the hearing, the petitioner’s counsel, Sri. K. Babu Thomas, reiterated the request to allow continuation from the stage of concluded evidence, citing the considerable amount of evidence already recorded. The respondents, represented by Sri. Nikhilesh Krishnan, strongly opposed this, relying on the Commercial Court’s findings which held that the arbitral award was void ab initio and that the proceedings were non est.

The dispute revolves around the execution of a government contract under an agreement dated 31-7-2013, where disagreements emerged over performance and liabilities. After failed attempts at resolution, the petitioner initially sought arbitration, leading to the appointment and conduct of proceedings by an arbitrator nominated solely by the Managing Director of the respondent organization.

Upon challenge, the Commercial Court nullified the award, holding that such unilateral appointment of an arbitrator is against the law as settled by the Hon'ble Supreme Court. The High Court, upon subsequent appeal, confirmed this view.

In the present Arbitration Request, both parties agreed that a fresh arbitrator could be appointed. However, the admissibility and continuity of evidence remained contentious. The petitioner leaned on the principle of judicial economy to continue from where the evidence was concluded, whereas the respondent maintained that the nullification of the award nullifies the entire arbitral record.

The legal debate focused on the implications of an award being declared void ab initio and whether evidence recorded in such proceedings could be carried forward or must be independently reassessed. Both counsels cited Section 43(4) of the Arbitration and Conciliation Act in support of their respective positions, though no specific case law is referenced in the judgment.

The Court recorded its understanding of the petitioner’s plea as follows: "The learned counsel for the Petitioner prayed that on appointment of the new arbitrator, the new Arbitrator may commence proceedings from the point where the evidence was concluded, since voluminous evidence had been recorded before the Arbitrator."

However, addressing the opposition raised by the respondent, the Court noted: "The said prayer was strongly opposed by the learned counsel for the respondent contending that in the order by which the award is set aside, it is specifically held that the award is void ab initio and all the proceedings are 'non est'."

On examining this contention, the Court stated: "As rightly pointed out by the learned counsel for the respondents, there is an inter partes judgment binding on the parties, setting aside the Arbitration award finding that the appointment of the arbitrator is void ab initio; that the arbitral proceedings was non est and that the Arbitration award is non est/ void."

Expounding further, the Court added: "In such a case, the entire proceedings, which already took place before the arbitrator, are effaced. The fresh Arbitrator has to initiate the proceedings afresh."

While acknowledging the volume of evidence previously submitted, the Court clarified its jurisdictional limits in this context: "The question whether the evidence already tendered before the earlier Arbitrator is admissible before the fresh Arbitrator or not, is a matter for the fresh Arbitrator to consider, when such evidence is produced before the Fresh Arbitrator."

On the scope of authority while considering an application under Section 11(6), the Court stated: "While considering an Application under Section 11(6) of the Arbitration and Conciliation Act, this Court is not expected to give any direction with respect to the proceedings and admissibility of any document or evidence to the Arbitrator."

The Court finally concluded its observations on the arbitration clause and mutual consent: "In view of the arbitration clause provided in the aforesaid Agreement and in view of the no objection submitted by the respondents, this Arbitration Request is allowed..."

The Court issued a series of specific directions, commencing with the nomination of the arbitrator: "Justice Mrs. Sophy Thomas, Former Judge of this Court, is nominated as the sole Arbitrator to resolve the disputes that have arisen between the petitioners and the respondents under the aforesaid Agreement."

It further directed: "The learned Arbitrator may entertain all issues between the parties in connection with the said aforesaid Agreement, including questions of jurisdiction and limitation, if any, raised by the parties."

Clarifying the scope of participation, the Court recorded: "All contentions of the parties are left open and they are at liberty to raise their claims and counter–claims, if any, before the learned Arbitrator, in accordance with law."

Regarding procedural compliance, the Court instructed: "The Registry shall communicate a copy of this order to the learned Arbitrator within ten days from today and obtain a Statement of Disclosure from the learned Arbitrator as stipulated under Section 11(8) read with Section 12(1) of the Arbitration and Conciliation Act, 1996."

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On formal issuance of documents, it was directed: "Upon receipt of the Disclosure Statement, the Registry shall issue to the learned Arbitrator a certified copy of this order with a copy of the Disclosure Statement appended. The Original of the Disclosure Statement shall be retained in Court."

Addressing the remuneration, the Court stated: "The fees of the learned Arbitrator shall be governed by the Fourth Schedule of the Act."

Concerning expert consultation, the Court clarified: "If the learned Arbitrator needs the assistance of an expert, such assistance can be sought from an expert in the course of the arbitration proceedings."

Advocates Representing the Parties:

For the Petitioner: Sri. K. Babu Thomas, Smt. Marykutty Babu, Smt. Drisya Dileep, Advocates

For the Respondents: Sri. Aju Mathew, Shri. Nikhilesh Krishnan, Sri. Abu Mathew, Advocates

Case Title: M.I. Mohammed v. M/s. HLL Life Care Ltd. & Ors.

Neutral Citation: 2025: KER:38884

Case Number: AR No. 95 of 2025

Bench: Justice M.A. Abdul Hakhim

[Read/Download order]