Case Title : BHADRA INTERNATIONAL (INDIA) PVT. LTD. & ORS. vs AIRPORTS AUTHORITY OF INDIA
Citation : 2026 INSC 6
Date : 05.01.2026
Hon’ble Supreme Court Bench – Justices JB Pardiwala and KV Viswanathan.
The Judgment provides a vital clarification on when an arbitrator’s mandate is considered “void ab initio” and how the rights of parties are protected under Indian law.The case originated from a dispute between a joint consortium (Bhadra International) and the Airports Authority of India (AAI) over ground handling services at various airports. The license agreement between the parties allowed the Chairman of AAI to unilaterally appoint a sole arbitrator. After a “Nil” award was passed (rejecting claims from both sides), the appellants challenged the entire proceeding. They argued that because the Chairman—who himself was ineligible to be an arbitrator due to his relationship with one of the parties—had appointed the arbitrator, the appointment was invalid from the very beginning. The court emphasized on :
- The Court emphasized that the principle of “equal treatment of parties” (Section 18) applies not just during the hearings, but also to the procedure of choosing the arbitrator. Both parties must have an equal say in forming the tribunal to ensure fairness.
- Under Section 12(5) and the Seventh Schedule, anyone with a direct or indirect interest in the dispute is ineligible to be an arbitrator. The Court ruled that an ineligible person (like the Chairman of a party) cannot nominate another person to be an arbitrator.
- The respondent argued that the appellants had waived their right to object by participating in the proceedings for years. However, the Court clarified that ineligibility cannot be waived by conduct or silence. It requires an “express agreement in writing” specifically entered into after the dispute has arisen.
- The Supreme Court concluded that the High Court had committed an “egregious error” in dismissing the challenge.
