BHADRA INTERNATIONAL (INDIA) PVT. LTD. & ORS. versus AIRPORTS AUTHORITY OF INDIA

Citation: [2026] 1 S.C.R. 30 · Decided: 05-01-2026 · Supreme Court of India · Bench: J.B. PARDIWALA · Disposal: Appeal(s) allowed

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Judgment (excerpt)

[2026] 1 S.C.R. 30 : 2026 INSC 6
Bhadra International (India) Pvt. Ltd. & Ors. 
v. 
Airports Authority of India
(Civil Appeal No(s). 37-38 of 2026)
05 January 2026
[J.B. Pardiwala* and K.V. Viswanathan, JJ.]
Issue for Consideration
i) Whether the sole arbitrator could be said to have become 
“ineligible to be appointed as an arbitrator” by virtue of sub-section 
(5) of s.12 of the Arbitration and Conciliation Act, 1996; ii) whether 
the parties could be said to have waived the applicability of  
sub-section (5) of s.12 of the Act, 1996, by way of their conduct, 
either expressed or implied; iii) whether the appellants could have 
raised an objection to the appointment of the sole arbitrator for the 
first time in an application u/s.34 of the Act, 1996.
Headnotes†
Arbitration and Conciliation Act, 1996 – s.12 and s.18 – Position 
of law as regards s.12 of the Act, 1996 – Application of principle 
of equal treatment of parties provided in s.18:
Held: The principle of equal treatment of parties provided in s.18 of 
the Act, 1996, applies not only to the arbitral proceedings but also 
to the procedure for appointment of arbitrators – Equal treatment 
of the parties entails that the parties must have an equal say in 
the constitution of the arbitral tribunal. [Para 123(i)]
Arbitration and Conciliation Act, 1996 – Sub-section (5) of s.12 
and Seventh Schedule – When relationship falls within any of 
the categories specified in the Seventh Schedule:
Held: Sub-section (5) of s.12 provides that any person whose 
relationship with the parties or counsel, or the dispute, whether 
direct or indirect, falls within any of the categories specified in 
the Seventh Schedule would be ineligible to be appointed as an 
arbitrator – Since, the ineligibility stems from the operation of law, 
not only is a person having an interest in the dispute or its outcome 
* Author
[2026] 1 S.C.R. 
31
Bhadra International (India) Pvt. Ltd. & Ors. v.  
Airports Authority of India
ineligible to act as an arbitrator, but appointment by such a person 
would be ex facie invalid. [Para 123(ii)]
Arbitration and Conciliation Act, 1996 – Proviso to s.12(5) – 
The words “an express agreement in writing” in the proviso 
to s.12(5):
Held: The words “an express agreement in writing” in the proviso 
to s.12(5) means that the right to object to the appointment of an 
ineligible arbitrator cannot be taken away by mere implication – The 
agreement referred to in the proviso must be a clear, unequivocal 
written agreement. [Para 123(iii)]
Arbitration and Conciliation Act, 1996 – s.12(5) – When an 
arbitrator is found to be ineligible by virtue of s.12(5) r/w. the 
Seventh Schedule:
Held: When an arbitrator is found to be ineligible by virtue of 
s.12(5) r/w. the Seventh Schedule, his mandate is automatically 
terminated – In such circumstance, an aggrieved party may 
approach the court u/s. 14 r/w. s.15 for appointment of a substitute 
arbitrator – Whereas, when an award has been passed by such 
an arbitrator, an aggrieved party may approach the court u/s. 34 
for setting aside the award. [Para 123(iv)]
Arbitration and Conciliation Act, 1996 – s.12 – Parties vest 
jurisdiction in the tribunal:
Held: In arbitration, the parties vest jurisdiction in the tribunal 
by exercising their consent in furtherance of a valid arbitration 
agreement – An arbitrator who lacks jurisdiction cannot make an 
award on the merits – Hence, an objection to the inherent lack of 
jurisdiction can be taken at any stage of the proceedings. [Para 
123(v)]
Arbitration and Conciliation Act, 1996 – sub-section (5) of s.12 
and Seventh Schedule – Objective of s.12:
Held: There is a conspectus of decisions of this Court which 
lay down that, s.12 was amended with the objective of ensuring 
independence and impartiality of arbitrators – By virtue of sub-
section (5) of s.12, any person whose relationship with the parties 
or counsel, or the dispute, whether direct or indirect, falls within any 
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[2026] 1 S.C.R.
Supreme Court Reports
of the categories specified in the Seventh Schedule is rendered 
ineligible to be appointed as an arbitrator. [Para 51]
Arbitration and Conciliation Act, 1996 – sub-section (5) of 
s.12 – When an arbitration agreement is in violation of sub-
section (5) of s.12:
Held: When an arbitration agreement is in violation of sub-section 
(5) of s.12 of the Act, 1996, the parties can neither insist on 
appointment of an arbitrator in terms of the agreement nor would 
any appoin

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