Newton Engineering and Chemicals Limited vs. Indian Oil Corporation Ltd.
Background
In a commercial dispute over a delayed supply contract, Indian Oil Corporation (IOC) gave the appellant a curated list of three possible arbitrators to choose from, and the appellant picked one from that list. After losing before that arbitrator and before a District Judge, the appellant argued the entire appointment process was invalid because only IOC controlled who was on the list.
Decision Breakdown
Relying on recent Supreme Court rulings (Bhadra International and CORE), the Court held that letting a party simply choose from a panel curated solely by the other side doesn't satisfy the law's requirement that parties have truly equal participation in selecting an arbitrator: nor does it count as the "express agreement in writing" needed to waive that protection, even though the appellant had actively participated in the arbitration afterward. Since the tribunal itself was invalidly constituted, the award arising from it could not stand, regardless of the merits that had already been argued. The Court set aside both the District Judge's judgment and the underlying arbitral award, and permitted the parties to start fresh arbitration proceedings, leaving the actual merits of the contractual dispute open for a validly constituted tribunal to decide.
Lesson Learnt
If only one party controls the list of potential arbitrators, letting the other side merely "pick one from the list" isn't the same as a fair, consensual appointment, and participating in the resulting arbitration doesn't cure that defect later.