Authority: High Court at Calcutta, Commercial Division

Order Date: 29 July 2026

Case Overview

  • Parties: Appellant/Claimant – Amal Krishna Dey; Respondent – Central Warehousing Corporation (CWC).
  • Background: CWC issued a tender on 26 April 2011 for construction of a 2400 MT capacity godown at C.W. Santragachi, estimated cost Rs 65.97 lakhs. Amal Krishna Dey was the lowest bidder, received a Letter of Acceptance on 30 July 2011 and a work order on 13 September 2011. The contractual amount was Rs 80,34,247.30. The work, originally to be completed in six months, was finally completed on 24 August 2013.
  • Dispute: CWC deducted penalties and withheld payments, leading to arbitration. The arbitration clause (Clause 25 of the contract) was invoked on 1 January 2019. The Managing Director of CWC appointed Mr. Madhuresh Kumar (Retired IRSE) as Sole Arbitrator on 25 January 2019; he entered upon reference on 29 January 2019.
  • Arbitration Proceedings: Claimant’s statement of claim filed on 20 March 2019 sought Rs 16,37,159 with interest at 18% p.a. from 24 August 2013. CWC’s defence (21 June 2019) included a counter‑claim of Rs 47,58,275 for loss of business and Rs 45,60,000 for establishment charges.
  • Award: Arbitrator awarded Rs 16,15,017 with simple interest at 10% p.a. till realisation to the claimant and rejected CWC’s counter‑claim. The award also stipulated that interest would cease if payment was made within 90 days of the award.
  • Lower Court Decision: The Commercial Court at Asansol, in a judgment dated 23 June 2025, set aside the award, holding the appointment of the arbitrator was “patently illegal” because the Managing Director, a party officer, was ineligible under Section 12(5) of the Arbitration and Conciliation Act, 1996 (as amended in 2015).
  • Appeal: Amal Krishna Dey appealed (AO‑COM 35 of 2025) on 23 July 2026, arguing that the arbitrator’s appointment was valid, that there was no bias, and that the lower court erred in law.
  • Counsel Submissions: Appellant counsel relied on Hindustan Construction Co. Ltd. v. Bihar Rajya Pul Nirman Nigam Ltd.; Respondent counsel relied on Bhadra International (India) Pvt. Ltd. v. Airports Authority of India, Perkins Eastman Architects DPC v. HSCC (India) Ltd., and Bharat Broadband Network Ltd. v. United Telecoms Ltd.

Final Outcome

  • The Calcutta High Court dismissed the appeal, affirming the Commercial Court’s order that the sole arbitrator’s appointment was unilateral and void ab initio.
  • The court held that Section 12(5) of the Arbitration Act, reinforced by the 2015 Amendment, bars any pre‑dispute contractual clause from waiving statutory ineligibility of an arbitrator or the appointing authority.
  • Consequently, the arbitral award of Rs 16,15,017 with interest was declared invalid, and the appellant received no relief.
  • No order as to costs was made.
  • An urgent certified copy of the judgment may be obtained by the parties upon compliance with legal formalities.

Topics: Arbitration, Court Judgment