Bombay HC Rules Pre-2015 Arbitral Awards with Unilateral Arbitrator Appointments Remain Enforceable

Two recent High Court decisions have clarified important procedural boundaries for the enforcement of arbitral awards under the Arbitration and Conciliation Act, 1996 (the Act). In one ruling, the Bombay High Court held that an executing court cannot refuse enforcement of a pre-2015 arbitral award merely because the arbitrator was appointed unilaterally. In the other, the Calcutta High Court ruled that a certified copy of an arbitral award bearing only a third-party attestation, without reproducing the arbitrators' actual signatures, does not constitute a "signed copy" under Section 31(5) of the Act. Both decisions carry significant implications for parties seeking to enforce or resist arbitral awards in India.

Bombay High Court: Section 12(5) Does Not Retrospectively Invalidate Pre-2015 Appointments

In M/s. S. E. Investments Ltd. (now known as Paisalo Digital Limited) v. Star Bazaar Pvt. Ltd. and Connected Matters (Interim Application Nos. 2007, 2009, 2011 and 2015 of 2026 in Commercial Execution Application No. 59 of 2016), decided on 4 August 2026, the Bombay High Court addressed a recurring question in arbitration enforcement proceedings: whether unilateral arbitrator appointments made before the 2015 amendment to the Act are rendered void by the subsequent introduction of Section 12(5).

The case arose from several commercial execution applications filed by Paisalo Digital Limited (formerly M/s. S. E. Investments Ltd.) seeking enforcement of arbitral awards passed pursuant to arbitration proceedings invoked prior to 23 October 2015. The judgment debtors, including Star Bazaar Private Limited, Hareram Cotton Industries, Maple Composite Containers Limited, and Sezal Glass Limited, resisted execution by relying on the Supreme Court's decision in Bhadra International (India) Pvt. Ltd. v. Airport Authority of India (2026). They argued that unilateral appointment of arbitrators was contrary to the basic principles of arbitration and that the awards were therefore void for want of jurisdiction.

Justice Jitendra Jain appointed Mr. Jay Sanklecha as amicus curiae to assist the Court on the issue and framed three key questions: whether unilateral appointment of an arbitrator before 23 October 2015 was without jurisdiction, whether an executing court could refuse enforcement of an unchallenged award on such grounds, and whether Bhadra International applied retrospectively.

After an extensive analysis of the statutory framework, including Sections 7, 11, 12, 13, 16, 18, and 21 of the Act, the Court identified three distinct categories of unilateral appointments:

• Appointment of an arbitrator who is inherently interested or lacks independence

• Appointment made under a contractual clause authorising one party to appoint an independent arbitrator

• Appointment made without any contractual authority or consent

The Court held that these categories cannot be treated alike. Prior to the 2015 amendment, the Supreme Court had consistently upheld the second category, namely contractual appointment clauses where one party was authorised to nominate an arbitrator. The disqualification introduced by Section 12(5), read with the Fifth and Seventh Schedules, constituted a new statutory disqualification that could not be retrospectively imported into arbitrations commenced before its enactment.

Reconciling numerous Supreme Court authorities, including Bhadra International, Dharma Prathishthanam v. Madhok Construction (P) Ltd., Central Organisation for Railway Electrification (CORE) v. ECI-SPIC-SMO-MCML (JV), and Board of Control for Cricket in India v. Kochi Cricket Pvt. Ltd., the Court concluded that Bhadra International applies only to arbitrations invoked after 23 October 2015, where Section 12(5) governs arbitrator eligibility.

The Court distinguished Dharma Prathishthanam on the basis that it dealt with a situation where one party appointed an arbitrator without any contractual authority, unlike cases where the arbitration agreement itself authorised such appointment. Understanding the distinction between these categories is critical for parties drafting arbitration agreements, and proper clause drafting can prevent such disputes from arising altogether.

The Court therefore ruled that unilateral appointments of arbitrators made pursuant to contractual clauses before 23 October 2015 are not rendered void merely because Section 12(5) subsequently introduced statutory ineligibility for certain appointments. The decision in Bhadra International does not retrospectively invalidate such appointments or defeat execution of awards that were never successfully challenged under the Act. Only appointments falling within the exceptional category recognised in Dharma Prathishthanam, namely appointments made without contractual authority or consent, would be jurisdictionally void.

This ruling provides much-needed clarity for award-holders whose enforcement proceedings have been resisted on the basis of the 2015 amendment. Parties who failed to challenge arbitrator appointments or awards through the statutory remedies available under Sections 13, 16, 34, or 37 of the Act cannot raise these objections for the first time during execution. For parties navigating the appointment process under the current framework, the procedure for seeking court-assisted appointment of arbitrators under Section 11 remains an important safeguard.

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Calcutta High Court: Certified Copy Without Arbitrators' Signatures Is Not a "Signed Copy"

In CE Testing Company Private Limited v. Madhucon Projects Limited and Another (EC-COM 72 of 2025, Citation: 2026 LLBiz HC (CAL) 186), the Calcutta High Court addressed a different but equally important procedural question: what constitutes valid delivery of a "signed copy" of an arbitral award under Section 31(5) of the Act.

CE Testing Company Private Limited had secured an arbitral award from the West Bengal Micro and Small Scale Enterprises Facilitation Council on 10 November 2020 in a dispute arising from five contracts for railway, road, and tunnel projects awarded by Madhucon Projects Limited between 2011 and 2012. The contracts covered the Jiribam-Tipul new railway line, the four-laning of NH-34 between Barasat and Krishnagar, and the four-laning of NH-31 between Rajauli and Bakhtiyarpur in Bihar. The dispute related to unpaid amounts of approximately Rs. 1.11 crore for completed work. The Council's award was in CE Testing's favour, and the company subsequently filed an execution petition before the High Court claiming more than Rs. 4.63 crore, including interest.

However, the copy of the award served on the parties contained only a typed "Sd/-" against the names of the chairperson and members of the Council. It also carried an attestation by A.K. Ghosh, Deputy Director (SSE), MSME Directorate, Government of West Bengal, but did not reproduce the arbitrators' actual signatures.

Justice Gaurang Kanth examined whether this constituted compliance with Section 31(5), which mandates that a signed copy of the arbitral award be delivered to each party. The Court observed that what had been certified by the Deputy Director was not a photocopy carrying the signatures themselves, but a typed or printed document bearing only the certifying officer's own attestation that the original was signed.

The Court held that a certificate by a third party, however authorised, that an unseen original was signed cannot be equated with a copy that itself bears the signatures. The purpose of Section 31(5), as explained in the Supreme Court's decision in Tecco Trichy Engineers, is to permit each party to satisfy itself, from the document delivered to it, that the award emanates validly from the arbitral tribunal.

The Court further held that the West Bengal Micro and Small Scale Enterprises Facilitation Council Rules, 2016, do not dispense with the Act's requirement that parties receive an award bearing the arbitrators' signatures. Since Section 31(5) had not been complied with, the limitation period for filing a challenge under Section 34 had not commenced. Consequently, enforcement under Section 36 could not proceed.

The execution petition was dismissed as premature. Both parties were granted liberty to approach the Facilitation Council for a duly signed copy of the award, or a certified copy reproducing the arbitrators' signatures, in compliance with Section 31(5). This decision underscores the importance of procedural compliance in arbitral proceedings, particularly in institutional arbitrations conducted by statutory bodies such as MSME Facilitation Councils. The ruling also reinforces the broader principle that arbitral awards are not automatically enforceable. They must meet the statutory requirements for validity and delivery before the enforcement machinery can be set in motion. These procedural safeguards exist alongside substantive protections, such as the principle that even non-signatories may in certain circumstances be bound by arbitration agreements, and the limits on confidentiality in arbitration proceedings when disclosure is court-ordered.

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Key Takeaways

These two decisions, read together, illustrate the dual nature of arbitral award enforcement in India. The Bombay High Court decision confirms that statutory amendments operate prospectively, protecting the finality of awards that were never challenged through available remedies. The Calcutta High Court decision reinforces the importance of strict compliance with procedural requirements, particularly the delivery of properly signed copies to trigger limitation periods. Both rulings affirm that while Indian courts are generally supportive of arbitration, enforcement remains subject to the procedural safeguards built into the Act.