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Life Insurance Corporation of India vs. N.S. Associates Pvt. Ltd

First Appeal from Order (Original Side, Commercial) · 2026:DHC:8751-DBDecided 6 Oct 2026New Delhi Bench
FAO(OS) (COMM) 261/2026CNR: DLHC010463982026
Justice Anil Kshetarpal · Justice Bharat Parashar

Background

A Single Judge had earlier found that LIC's Executive Director wasn't legally authorised to appoint the sole arbitrator in a dispute with a contractor, but set aside the resulting arbitral award only partly, limited to the specific claim the contractor had actually challenged, leaving the rest of the award standing. LIC appealed, arguing that if the arbitrator's own appointment was invalid, the entire award (not just part of it) should fall, and separately sought condonation of a 692-day delay in filing the appeal.

Decision Breakdown

The Court first condoned the delay, accepting LIC's explanation that it had first pursued a correction application before the Single Judge. On merits, it held that once the Arbitral Tribunal's constitution itself is found invalid, the resulting award cannot survive in part merely because only certain claims were challenged: the defect in jurisdiction taints the whole award. The entire arbitral award was accordingly set aside, with the contractor free to seek recovery of any amount already paid out under it.

Lesson Learnt

If an arbitrator was never validly appointed in the first place, an award can't be salvaged piecemeal: invalid constitution of the tribunal invalidates the award as a whole, not just the portions a party happened to object to.

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