$~9 * IN THE HIGH COURT OF DELHI AT NEW DELHI # CNR No. DLHC010008632026 + ARB.P. 91/2026 & I.A. 940/2026 M/S BRAHMAPUTRA CRACKER AND POLYMER LTD .....Petitioner Through: Ms. Samiksha Godiyal, Mr. Tenzing N Bhutia & Mr. Rithwik Narayanan, Advs. versus M/S MEDI CARRIER PVT. LTD. .....Respondent Through: None. CORAM: HON'BLE MR. JUSTICE AVNEESH JHINGAN O R D E R % 07.09.2026 1. This petition is filed under Section 11 of the Arbitration and Conciliation Act, 1996 (for short ‘the Act’) for appointment of an arbitrator. 2. The brief facts are that the parties to the lis entered into an agreement dated 11.05.2018 for transportation of polymer products for a period of twenty-four months. Disputes arose regarding excess payment of Rs.31,20,477/- made to the respondent on account of incorrect implementation of the price variation clause. The petitioner sought refund of the amount and invoked conciliation under clause 45 of the Instructions to Bidders (for short ‘ITB’) vide notice dated 18.01.2025. The conciliation proceedings failed on 06.09.2025. Thereafter, the petitioner invoked arbitration under clause 108 of the GCC vide notice dated 29.10.2025. On This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 14/09/2026 at 15:45:09 failure to do the needful, the present petition is filed. 2.1 The relevant portion of clause 108 of the GCC is reproduced below: “108. ARBITRATION 108.1 Unless otherwise specified, the matters where decision of the Engineer-in-Charge is deemed to be final and binding as provided in the Agreement and the issues/disputes which cannot be mutually resolved within a reasonable time, all disputes shall be referred to arbitration by Sole Arbitrator. The Employer [BCPL] shall suggest a panel of three independent and distinguished persons to the bidder/contractor/supplier/buyer (as the case may be) to select any one among them to act as the Sole Arbitrator. In the event of failure of the other parties to select the Sole Arbitrator within 30 days from the receipt of the communication suggesting the panel of arbitrators, the right of selection of the sole arbitrator by the other party shall stand forfeited and the EMPLOYER (BCPL) shall have discretion to proceed with the appointment of the Sole Arbitrator. The decision of Employer on the appointment of the sole arbitrator shall be final and binding on the parties. The award of sole arbitrator shall be final and binding on the parties and unless directed/awarded otherwise by the sole arbitrator, the cost of arbitration proceedings shall be shared equally by the parties. The Arbitration proceedings shall be in English language and venue shall be Guwahati, India. Subject to the above, the provisions of (Indian) Arbitration & Conciliation ACT 1996 and the Rules framed there under shall be applicable. All matter relating to this contract is subject to the exclusive jurisdiction of the court situated in the state of Delhi. Bidders/suppliers/contractors may please note that the Arbitration & Conciliation Act 1996 was enacted by the Indian Parliament and is based on United Nations Commission on International Trade Law (UNCITRAL model law), which were prepared after extensive This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 14/09/2026 at 15:45:09 consultation with Arbitral Institutions and centers of International Commercial Arbitration. The United Nations General Assembly vide resolution 31/98 adopted the UNCITRAL Arbitration rules on 15 December 1976.” 3. The respondent was proceeded ex parte vide order dated 11.08.2026 which is as under:- “1. On 26.05.2026, the following order was passed: “1. As per the affidavit of service filed, speed-post has been delivered. 2. None appears for the respondent. 3. In the interests of justice, put up on 11.08.2026. 4. Reply, if any, be filed within six weeks.” 2. Today again the respondent remains unrepresented and is proceeded ex-parte. 3. Put up on 07.09.2026.” 4. The scope of the reference court under Section 11 of the Act is well defined. The existence of an arbitration clause and a prima facie dispute is to be seen and the rest of the issues are to be considered by the arbitrator. 5. The undisputed fact is that clause 108 of the GCC provides that in case of dispute between the parties the matter shall be referred for arbitration. 6. Prima facie there is a dispute between the parties for which the notice dated 29.10.2025 was issued by the petitioner. The law is well settled that the official of a party to the dispute can neither be appointed as an arbitrator nor can appoint an arbitrator. The portion of clause 108 providing for appointment of the arbitrator by the petitioner is void and does not dent the substantive agreement to arbitrate between the parties. This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 14/09/2026 at 15:45:09 7. The Supreme Court in Hindustan Construction Company Ltd. v. Bihar Rajya Pul Nirman Nigam Ltd. and Ors., 2025 SCC OnLine SC 2578 dealt with an arbitration clause providing that no person other than a person appointed by the Managing Director or administrative head of the Nigam should act as arbitrator and if such appointment is not possible then the matter is not arbitrable. It was held that the exclusive power with the contractee to appoint arbitrator is unenforceable and should be severed but the agreement of arbitration survives. The portion of the clause that for any reason the arbitration by the arbitrator appointed by the contractee is not possible the matter shall not be referred to arbitration at all violates Section 18 of the Act. The relevant paragraphs of the judgment are reproduced below: "61. Accordingly, the portion of Clause 25 that vests exclusive appointment power in one party and forecloses arbitration in default of such appointment must be severed as void and unenforceable. However, the substantive agreement to arbitrate survives by virtue of the doctrine of severability. *** *** *** 63. The present contract, being a public-private contract, must withstand not only conventional contractual scrutiny but also constitutional scrutiny. As held in CORE Il, arbitral appointments in public contracts must satisfy the requirements of fairness, equality, and non-arbitrariness under Article 14. 64. The sub-clause in Clause 25 which provides that "if for any reason the matter shall not be referred to arbitration" is vague, uncertain, and arbitrary. The expression "for any reason" confers an unguided and absolute veto, particularly objectionable in a public contract. Such a clause fails the test of manifest arbitrariness and violates Section 18 of the Act, which mandates equal treatment of parties. This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 14/09/2026 at 15:45:09 65. In light of the above discussion, the following propositions emerge: (i) The parties' conduct clearly demonstrates their intention to arbitrate, satisfying the requirement of Section 7(4)(c); (ii) Clause 25, in its substantive form, constitutes a valid arbitration agreement; (iii) The unilateral and exclusionary appointment mechanism is void and severable; and (iv) This Court is empowered under Section 11(6) to cure the defect and appoint an independent arbitrator. 66. Accordingly, it is held that a valid and subsisting arbitration agreement exists between the parties. Clause 25, when read in its entirety and construed in accordance with the doctrine of severability, satisfies the statutory requirements of an arbitration clause under Section 7 of the Act. The contrary finding of the High Court is unsustainable in law and is liable to be set aside.". 8. Accordingly, the petition is allowed by appointing Ms. Kaarunya Lakshmi, Advocate (Mobile No.8586801514) as the sole arbitrator for adjudication of the disputes which have arisen between the parties. Pending application is also disposed of. 9. Arbitral proceedings will be held under the aegis of Delhi International Arbitration Centre (DIAC). Fee of the Arbitrator shall be fixed as per fee schedule. 10. Before entering upon reference, the learned Arbitrator will comply with Section 12 of the Act. 11. It is made clear that since this Court has not expressed any opinion on the merits of the rival claims of the parties and it will be open for the parties to file their respective claims/counter claims before the learned Arbitrator This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 14/09/2026 at 15:45:09 which will be considered in accordance with law. 12. A copy of this order be forwarded to the learned Arbitrator for information. AVNEESH JHINGAN, J SEPTEMBER 7, 2026 Ch This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 14/09/2026 at 15:45:09