Bharat Broadband Network Limited vs United Telecoms Limited
[2019] 6 S.C.R. 97; 2019 INSC 537
Coram: Hon’ble Justice R.F. Nariman & Hon’ble Justice Vineet Saran
Forum: Hon’ble Supreme Court of India
Case No.: Civil Appeal No. 3972 of 2019 with Civil Appeal No. 3973 of 2019
Date of Decision: April 16, 2019
Conclusion

Facts & Background:
- Bharat Broadband Network Limited was the Appellant.
- United Telecoms Limited (Respondent) a private company and the successful L1 bidder for a turnkey project floated by BBNL for the supply, installation, commissioning, and maintenance of GPON and solar power equipment.
- Disputes arose between the parties regarding the Advance Purchase Order (APO) dated 30.09.2014.
- The Respondent, by letter dated 03.01.2017, invoked the arbitration clause, pursuant to which the Appellant’s Chairman and Managing Director appointed Shri K.H. Khan as sole arbitrator on 17.01.2017, permitting claims and counterclaims.
- On 03.07.2017, in TRF Ltd. v. Energo Engineering Projects Ltd., (2017) 8 SCC 377 this Court held that the Managing Director of a company, being a party to the arbitration was ineligible to appoint an arbitrator, rendering such appointment null and void.
- Subsequent to the TRF Ltd. v. Energo Engineering Projects Ltd., (2017) 8 SCC 377 the Appellant, citing ineligibility, requested Shri Khan’s withdrawal as arbitrator however, Shri Khan, by letter dated 21.10.2017, rejected the request without providing any reasons.
- The Appellant filed a petition before the High Court of Delhi on 28.10.2017, seeking the appointment of a substitute arbitrator, claiming that Shri Khan had become de jure incapable of acting.
- On 22.11.2017, the High Court rejected the petition, holding the Appellant was estopped from raising ineligibility due to appointment and participation in proceedings, thus waiving the applicability of Section 12(5) of the Arbitration Act.
- Hence, the Appellant challenged the High Court’s order in the Supreme Court, asserting that the appointment of Shri K.H. Khan was invalid as per the law laid down in TRF Ltd., and the arbitrator had become de jure incapable of continuing.
Main Issue:
- Whether the Appellant's appointment of Shri Khan and the Respondent's filing of a statement of claim without reservation constitutes an express written agreement, waiving Section 12(5) applicability. (Paragraph 6)
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