No review or appeal against Section 11 arbitrator appointment: SC

No review or appeal against Section 11 arbitrator appointment: SC

In Hindustan Construction Company Ltd. v. Bihar Rajya Pul Nirman Nigam Ltd. the Supreme Court reaffirmed the principle of finality of orders appointing arbitrators under Section 11 of the Arbitration and Conciliation Act, 1996. The dispute arose from a 2014 contract containing an arbitration clause. After the respondent failed to appoint an arbitrator for a fresh dispute, the Patna High Court appointed a sole arbitrator under Section 11(6). Both parties participated in the arbitration for over three years, held more than 70 hearings, and jointly sought extensions of the arbitrator’s mandate under Section 29A. Subsequently, the respondent sought review of the appointment order, which the High Court allowed, effectively terminating the arbitration. The Supreme Court set aside this decision, holding that no review or appeal lies against a Section 11 appointment order, as the court becomes functus officio thereafter. It clarified that defects in a unilateral appointment mechanism are severable and do not negate the arbitration agreement itself. Further, by actively participating and seeking mandate extensions, the respondent waived its objections under Section 4. The Court directed appointment of a substitute arbitrator to continue proceedings from the final-argument stage.