# M/s OM Automobiles & Anr v. Indian Oil Corporation & Ors

- **Citation:** (2025) 5 ILRA 8
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2025-05-05
- **Case number:** Civil Misc. Arbitration Application No. 109 of 2024
- **Bench:** Abdul Moin
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/m-s-om-automobiles-anr-v-indian-oil-corporation-ors-53449
- **Pages:** 7

## Headnote

Civil Law - Arbitration and Conciliation
Act, 1996 - Sections 11, 11(6), 11(8),
12(1), 12(5) & 16 - Application under Section
11 of the Act, 1996 - seeking appointment of an
independent arbitrator - as well as challenging
the appointment of the arbitrator by Indian Oil
Corporation - who was later revealed to be both
an employee and shareholder of the IOC - on
the ground of biasness under the Fifth and
Seventh Schedules - initially, the applicants
were waived Section 12(5) for an employee but
no waiver was given for a shareholder - citing
Perkins Eastman Architects DPC Vs HSCC (India)
Ltd., the Court held that - once the applicants
have
withdrawn
their
consent
regarding
appointment of Shri S K Singh as an arbitrator
who yet an employee and shareholder in IOC is
not found to be ex facie valid and is clearly not
countenanced in the eyes of the law -
consequently,
the
Court
annulled
the
appointment of Shir S K Singh and by exercising
the power conferred u/section 11(6) of the Act,
1986 proposed to appoint Justice D.K. Arora
(Retired) as the new arbitrator. (Para - 31, 32,
33, 34, 35)

Application Pending. (E-11)

List of Cases cited:

## Text

8 INDIAN LAW REPORTS ALLAHABAD SERIES
(2025) 5 ILRA 8
APPELLATE JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 05.05.2025

BEFORE

THE HON'BLE ABDUL MOIN, J.

Civil Misc. Arbitration Application No. 109 of
2024
&
Civil Misc. Arbitration Application No. 110 of
2024
&
Civil Misc. Arbitration Application No. 1 of 2025

M/s OM Automobiles & Anr. ...Applicants
Versus
Indian Oil Corporation & Ors.
 ...Respondents

Counsel for the Applicants:
Brij Bhushan Singh, Gaurav Mehrotra,
Pranjal Apurva, Sandeep Kumar Mishra,
Tushar Mittal

Counsel for the Respondents:
Ashok Kumar Singh

Civil Law - Arbitration and Conciliation
Act, 1996 - Sections 11, 11(6), 11(8),
12(1), 12(5) & 16 - Application under Section
11 of the Act, 1996 - seeking appointment of an
independent arbitrator - as well as challenging
the appointment of the arbitrator by Indian Oil
Corporation - who was later revealed to be both
an employee and shareholder of the IOC - on
the ground of biasness under the Fifth and
Seventh Schedules - initially, the applicants
were waived Section 12(5) for an employee but
no waiver was given for a shareholder - citing
Perkins Eastman Architects DPC Vs HSCC (India)
Ltd., the Court held that - once the applicants
have
withdrawn
their
consent
regarding
appointment of Shri S K Singh as an arbitrator
who yet an employee and shareholder in IOC is
not found to be ex facie valid and is clearly not
countenanced in the eyes of the law -
consequently,
the
Court
annulled
the
appointment of Shir S K Singh and by exercising
the power conferred u/section 11(6) of the Act,
1986 proposed to appoint Justice D.K. Arora
(Retired) as the new arbitrator. (Para - 31, 32,
33, 34, 35)

Application Pending. (E-11)

List of Cases cited:

1. Perkins Eastman Architects DPC Vs HSCC
(India) Ltd., (2020) 20 SCC 760,

2. Walter Bau AG Vs Municipal Corporation of
Greater Mumbai, (2015) 3 SCC 800,

(Delivered by Hon'ble Abdul Moin, J.)

1. Heard Shri Brij Bhushan Singh as
well as Shri Tushar Mittal, learned counsel
for the applicants as well as Shri Ashok
Kumar Singh, learned counsel for the
respondents.

2. This is an application under
Section
11
of
the
Arbitration
and
Conciliation Act, 1996 (hereinafter referred
to as 'Act, 1996') for appointment of a sole
Arbitrator.

3. Learned counsels for the parties
contend that the issue involved in all the
three applications are same. As such, the
Court proceeds to hear all the applications
together and a common order is being
passed. For convenience, facts of CIVIL
MISC. ARBITRATION APPLICATION
No. - 109 of 2024 are being taken.

4. Preliminary objection has been
taken by Shri Ashok Kumar Singh, learned
counsel for the respondents that the
respondents have already appointed Shri
S.K. Singh as an Arbitrator vide the letter
dated 24.06.2024, a copy of which is
Annexure-14 to the application. He states
that in case the applicants are aggrieved by
the appointment of the said Arbitrator, it is
5 All. M/s OM Automobiles & Anr. Vs. Indian Oil Corporation & Ors.
9
always open for the applicants to
raise a dispute in terms of Section 16 of the
Act, 1996 before the learned Arbitrator
himself
and
consequently
instant
application would not be maintainable.

5. Responding to the aforesaid,
learned counsel for the applicant argues
that this aspect of the matter has been
considered by the Hon'ble Supreme Court
in the case of Perkins Eastman Architects
DPC v. HSCC (India) Ltd., (2020) 20 SCC
760 wherein after considering its earlier
judgment in the case of Walter Bau AG v.
Municipal Corpn. of Greater Mumbai,
(2015) 3 SCC 800, the Hon'ble Supreme
Court has held that an application under
Section 11(6) of the Act, 1996 would be
maintainable.

6. On merits, bereft of unnecessary
details, the facts are that an agreement
dated 08.09.2022 was entered into between
the applicants and the respondents-Indian
Oil Corporation (hereinafter referred to as
'the I.O.C.') for road transportation of Bulk
Petroleum Products. A copy of agreement
is Annexure-2 to the application.

7. Clause 18 of the said agreement
provides that if any dispute or difference of
any kind whatsoever arises between the
parties in connection with or arising out of
the Agreement, such dispute or differences
shall be resolved through arbitration.

8. It is contended that a dispute
arose between the parties with the result
that vide a letter dated 24.01.2024, a copy
of which is Annexure-10 to the application,
the applicants requested the respondents for
appointment of an Arbitrator.

9. A Letter dated 02.02.2024, a
copy of which is Annexure-11 to the
application,
was
received
from
the
respondents requiring the applicants to give
consent for appointment of an I.O.C.
Officer as an Arbitrator and also requiring a
consent waiving the applicability of Section
12(5) of the Act, 1996.

10. Immediately thereafter, the
applicants sent a letter dated 06.02.2024, a
copy of which is Annexure-12 to the
application, consenting for appointment of
an officer of the I.O.C. as an Arbitrator to
decide the dispute between the parties.

11. In pursuance thereof, the I.O.C.
appointed Shri S.K. Singh as an Arbitrator
vide the letter dated 24.06.2024, a copy of
which is Annexure-14 to the application.
Subsequent thereto, vide the letter dated
24.07.2024, a copy of which is part of
Annexure-16
to
the
application,
the
Arbitrator
wrote
to
the
applicants
disclosing that he is the shareholder and an
employee of the I.O.C.

12. Upon that, the applicants claim
to have sent a letter dated 12.08.2024
withdrawing their consent for appointment
of an employee and shareholder of the
I.O.C. namely S.K. Singh as an Arbitrator.
However, nothing concrete
arose on
account of withdrawal of the consent given
by the applicants for appointment of Shri
S.K. Singh and the said Arbitrator has not
been
withdrawn
by
the
I.O.C.
and
consequently
instant
application
for
appointment of an independent Arbitrator
by this Court.

13. Argument of the learned
counsel for the applicants is that although
Section 12(5) of the Act, 1996 categorically
provides that notwithstanding any prior
agreement to the contrary, any person
whose relationship, with the parties or
10 INDIAN LAW REPORTS ALLAHABAD SERIES
counsel or the subject-matter of the dispute,
falls under any of the categories specified
in the Seventh Schedule, shall be ineligible
to be appointed as an arbitrator but
subsequent to disputes having arisen
between the parties, the parties may waive
the applicability of this sub-section by an
express agreement in writing.

14. Contention is that although the
Arbitration
Clause
in
the
agreement
specifically provided for appointment of
Arbitrator who could be an employee and
the respondents themselves had proposed to
appoint one of the employees as an
Arbitrator
and
the
condition
was
specifically waived off by the applicants
yet the condition had been waived off
pertaining to an employee to be appointed
as Arbitrator but subsequently once the
Arbitrator himself indicated vide his letter
dated 24.07.2024 that he is both an
employee as well as shareholder of the
company as such considering the specific
bar provided both in the Vth & VII
Schedules of a shareholder not to be act as
an Arbitrator as such the applicants have
withdrawn their consent for appointment of
Shri S.K. Singh, an employee of I.O.C., to
act as Arbitrator which should have been
acted upon by the respondents yet they
have not withdrawn the appointment of the
said Arbitrator consequently the instant
application under Section 11(6) of the Act,
1996 would be maintainable.

15. In this regard, learned counsel
for the applicants has invited attention of
the Court towards Items 17 and 32 of the
the Vth Schedule as well as Item 17 of the
VIIth Schedule to indicate that where the
arbitrator holds shares, either directly or
indirectly, in one of the parties or an
affiliate of one of the parties that is
privately held, the same can be considered
to be a bar for appointment of an
Arbitrator.

16. Responding Shri A.K. Singh,
learned counsel for the respondents has
argued that once upon the request for
appointment of an Arbitrator by the
applicants, the letter dated 02.02.2024
specifically required the applicants to
waive off the applicability of Section 12(5)
of the Act, 1996 to which they had
acquiesced and consented consequently
once an Arbitrator has been appointed in
view of the consent given by the applicants
as such it is always open for the applicants
to raise objections before the Arbitrator in
terms of Section 16 of the Act, 1966
consequently instant application shall not
be maintainable.

17. Shri Ashok Kumar Singh,
learned counsel for the respondents has
further argued that once the applicants have
themselves
given
the
consent
for
appointment of an employee i.e. Shri S.K.
Singh as an Arbitrator as such it is too late
in the day for them to resile from the
consent that they had given and thus the
application filed by them merits to be
dismissed.

18. Heard learned counsel for the
parties and perused the record.

19. From perusal of the arguments
as raised by the learned counsel for the
parties and perusal of the record, it emerges
that admittedly there is an agreement dated
08.09.2022 between the parties of which
Clause 18 provides for appointment of an
Arbitrator. The applicants requested for
appointment of an Arbitrator. A letter dated
02.02.2024 was issued by the respondents
requiring the applicants to give consent for
appointment of an Officer of I.O.C. as an
5 All. M/s OM Automobiles & Anr. Vs. Indian Oil Corporation & Ors.
11
Arbitrator and also requiring the applicants
to give a consent waiving the applicability
of Section 12(5) of the Act, 1996.

20. The applicants sent a letter
dated
06.02.2024
consenting
for
appointment of an officer of I.O.C. as an
Arbitrator and in pursuance thereof I.O.C.
appointed Shri S.K. Singh as an Arbitrator.

21. The dispute arose when Shri
S.K. Singh, the Arbitrator sent a letter
dated 24.07.2024 disclosing that he is both
an employee of the I.O.C as well as
shareholder of the I.O.C.

22. The applicants sent a letter
dated 12.08.2024 withdrawing the consent
for appointment of Shri S.K. Singh as an
Arbitrator. The same has not been accepted
by the respondents and hence the instant
application
for
appointment
of
an
Arbitrator.

23. The respondents have raised a
preliminary objection that as Shri S.K.
Singh has been appointed as an Arbitrator
as such it is open for the applicants to raise
any dispute or objection that they may have
pertaining to his appointment before the
Arbitrator himself and consequently the
instant
application
would
not
be
maintainable.

24. Whether with the appointment
of an Arbitrator the objections should
always be raised before the Arbitrator or
the court can also intervene, has been
considered by the Hon'ble Supreme Court
in the case of Perkins Eastman Architects
DPC (supra) wherein the Hon'ble Supreme
Court has held as under:-

"26. The further question that
arises is whether the power can be
exercised by this Court under Section 11 of
the Act when the appointment of an
arbitrator has already been made by the
respondent and whether the appellant
should be left to raise challenge at an
appropriate stage in terms of remedies
available in law. Similar controversy was
gone into by a Designated Judge of this
Court in Walter Bau AG [Walter Bau
AG v. Municipal
Corpn.
of
Greater
Mumbai, (2015) 3 SCC 800 : (2015) 2 SCC
(Civ) 450] and the discussion on the point
was as under : (SCC pp. 805-06, paras 910)

"9. While it is correct that
in Antrix [Antrix
Corpn.
Ltd. v. Devas
Multimedia (P) Ltd., (2014) 11 SCC 560 :
(2014) 4 SCC (Civ) 147] and Pricol
Ltd. [Pricol
Ltd. v. Johnson
Controls
Enterprise Ltd., (2015) 4 SCC 177 : (2015)
2 SCC (Civ) 530] , it was opined by this
Court that after appointment of an
arbitrator is made, the remedy of the
aggrieved party is not under Section 11(6)
but such remedy lies elsewhere and under
different provisions of the Arbitration Act
(Sections 12 and 13), the context in which
the aforesaid view was expressed cannot be
lost sight of. In Antrix [Antrix Corpn.
Ltd. v. Devas Multimedia (P) Ltd., (2014)
11 SCC 560 : (2014) 4 SCC (Civ) 147] ,
appointment of the arbitrator, as per the
ICC Rules, was as per the alternative
procedure agreed upon, whereas in Pricol
Ltd. [Pricol
Ltd. v. Johnson
Controls
Enterprise Ltd., (2015) 4 SCC 177 : (2015)
2 SCC (Civ) 530] , the party which had
filed the application under Section 11(6) of
the Arbitration Act had already submitted
to the jurisdiction of the arbitrator. In the
present case, the situation is otherwise.

10. Unless the appointment of
the arbitrator is ex facie valid and such
appointment satisfies the Court exercising
jurisdiction under Section 11(6) of the
12 INDIAN LAW REPORTS ALLAHABAD SERIES
Arbitration Act, acceptance of such
appointment as a fait accompli to debar
the jurisdiction under Section 11(6)
cannot be countenanced in law. In the
present case, the agreed upon procedure
between the parties contemplated the
appointment of the arbitrator by the second
party within 30 days of receipt of a notice
from the first party. While the decision
in Datar
Switchgears
Ltd. [Datar
Switchgears Ltd. v. Tata Finance Ltd.,
(2000) 8 SCC 151] may have introduced
some flexibility in the time-frame agreed
upon by the parties by extending it till a
point of time anterior to the filing of the
application under Section 11(6) of the
Arbitration Act, it cannot be lost sight of
that in the present case the appointment of
Shri Justice A.D. Mane is clearly contrary
to the provisions of the Rules governing the
appointment of arbitrators by Icadr, which
the parties had agreed to abide by in the
matter of such appointment. The option
given to the respondent Corporation to go
beyond the panel submitted by Icadr and to
appoint any person of its choice was
clearly not in the contemplation of the
parties. If that be so, obviously, the
appointment of Shri Justice A.D. Mane is
non est in law. Such an appointment,
therefore, will not inhibit the exercise of
jurisdiction by this Court under Section
11(6) of the Arbitration Act. It cannot,
therefore,
be
held
that
the
present
proceeding is not maintainable in law. The
appointment of Shri Justice A.D. Mane
made beyond 30 days of the receipt of
notice by the petitioner, though may appear
to be in conformity with the law laid down
in Datar
Switchgears
Ltd. [Datar
Switchgears Ltd. v. Tata Finance Ltd.,
(2000) 8 SCC 151] , is clearly contrary to
the agreed procedure which required the
appointment made by the respondent
Corporation to be from the panel submitted
by Icadr. The said appointment, therefore,
is clearly invalid in law."

 27. It may be noted here that the
aforesaid view of the Designated Judge
in Walter
Bau
AG [Walter
Bau
AG v. Municipal
Corpn.
of
Greater
Mumbai, (2015) 3 SCC 800 : (2015) 2 SCC
(Civ) 450] was pressed into service on
behalf of the appellant in TRF Ltd. [TRF
Ltd. v. Energo Engg. Projects Ltd., (2017)
8 SCC 377 : (2017) 4 SCC (Civ) 72] and
the opinion expressed by the Designated
Judge was found to be in consonance with
the binding authorities of this Court. It was
observed : (TRF case [TRF Ltd. v. Energo
Engg. Projects Ltd., (2017) 8 SCC 377 :
(2017) 4 SCC (Civ) 72] , SCC p. 397, paras
32-33)

"32. Mr
Sundaram,
learned
Senior Counsel for the appellant has also
drawn inspiration from the judgment
passed by the Designated Judge of this
Court in Walter Bau AG [Walter Bau
AG v. Municipal
Corpn.
of
Greater
Mumbai, (2015) 3 SCC 800 : (2015) 2 SCC
(Civ) 450] , where the learned Judge, after
referring to Antrix Corpn. Ltd. [Antrix
Corpn. Ltd. v. Devas Multimedia (P) Ltd.,
(2014) 11 SCC 560 : (2014) 4 SCC (Civ)
147] , distinguished the same and also
distinguished
the
authority
in Pricol
Ltd. v. Johnson
Controls
Enterprise
Ltd. [Pricol
Ltd. v. Johnson
Controls
Enterprise Ltd., (2015) 4 SCC 177 : (2015)
2 SCC (Civ) 530] and came to hold that :
(Walter
Bau
AG
case [Walter
Bau
AG v. Municipal
Corpn.
of
Greater
Mumbai, (2015) 3 SCC 800 : (2015) 2 SCC
(Civ) 450] , SCC p. 806, para 10)

'10. Unless the appointment of
the arbitrator is ex facie valid and such
appointment satisfies the Court exercising
jurisdiction under Section 11(6) of the
Arbitration
Act,
acceptance
of
such
5 All. M/s OM Automobiles & Anr. Vs. Indian Oil Corporation & Ors.
13
appointment as a fait accompli to debar the
jurisdiction under Section 11(6) cannot be
countenanced in law....'

33. We may immediately state
that the opinion expressed in the aforesaid
case is in consonance with the binding
authorities
we
have
referred
to
hereinbefore."
(Emphasized by this Court)

25.
From
perusal
of
the
judgement of the Hon'ble Supreme Court in
the case of Perkins Eastman Architects
DPC (supra), it emerges that the Hon'ble
Supreme Court has held that unless the
appointment of an Arbitrator is ex facie
valid and such appointment satisfies the
Court exercising the jurisdiction under
Section 11 (6) of the Act, 1986 acceptance
of such appointment as fait accompli to
debar the jurisdiction under Section 11(6)
cannot be countenanced in law.

26. Thus, it is apparent that despite
the respondents having appointed Shri S.K.
Singh as an Arbitrator yet unless the
appointment of Shri S.K. Singh as an
Arbitrator is found to be ex facie valid, this
Court would have jurisdiction under
Section 11(6) of the Act, 1996 and it cannot
be debarred from exercising the said
jurisdiction. Thus the preliminary objection
is rejected.

27. On merits, it emerges that for
appointment
of
an
Arbitrator
the
respondents had required the applicants to
give consent for appointment of an I.O.C.
officer as an Arbitrator and requiring a
consent waiving the applicability of Section
12(5) of the Act, 1996, which the
applicants willingly gave. Thus, the waiver
was required for appointment of an I.O.C.
officer as an Arbitrator but the letter that
was issued by the Arbitrator, Shri S.K.
Singh subsequent to his appointment on
24.06.2024 indicates that the Arbitrator
wrote to the applicants disclosing that he is
both, the shareholder and an employee of
the I.O.C.

28. As already indicated above, the
consent which had been sought by the
respondents was a waiver in terms of the
provisions of the Act, 1996 for appointment
of an employee of the I.O.C. which had
willingly been given by the applicants but
instead of appointing solely an employee of
the I.O.C. the respondents appointed a
shareholder and an employee of the I.O.C.
which was against the specific waiver that
had been sought by the respondents and
which had been given by the applicants.

29. Schedule Vth and VIIth of the
Act, 1996 specifically provides in Items 17
and 32 (of the Vth Schedule) and Item 17
(of the VIIth Schedule) that where the
Arbitrator holds shares either directly or
indirectly in one of the parties the same can
be considered to be a bar for appointment
of an Arbitrator.

30. No doubt, Item 17 of the Vth
Schedule comes under the heading of 'The
Arbitrator's direct or indirect interest in the
dispute' yet considering that the Arbitrator
himself admits of being a shareholder
obviously he would be having a direct or
indirect financial interest in the dispute
pertaining to the I.O.C. in the capacity of
being a shareholder. Consequently once
there is a specific bar under the Vth and the
VIIth Schedule which gives rise to
justifiable doubts as to the independence or
impartiality of the Arbitrator and no
consent was ever sought by the respondents
for appointment of a shareholder as an
Arbitrator and the consent was only with
respect to an employee to be appointed as
14 INDIAN LAW REPORTS ALLAHABAD SERIES
an Arbitrator as such it is apparent that the
respondents
have
patently
erred
in
appointing Shri S.K. Singh, who is
admittedly a shareholder of the I.O.C. as an
Arbitrator.

31. Thus, once the applicants have
withdrawn the consent for appointment of
Shri S.K. Singh as an Arbitrator which
consent, as already indicated above, was
for appointment of an employee yet an
employee and a shareholder has been
appointed as an Arbitrator as such the
appointment of Shri S.K. Singh as an
Arbitrator is clearly not countenanced in
the eyes of the law.

32. Accordingly, considering the
law laid down by the Hon'ble Supreme
Court in the case of Perkins Eastman
Architects DPC (supra) the appointment of
Shri S.K. Singh as an Arbitrator is not
found to be ex facie valid and his
appointment does not satisfy this court and
clearly is not countenanced in the eyes of
law and is thus held to be invalid in law.

33. Keeping in view the aforesaid
discussion, a case is made out to entertain
this application as preferred by the
applicants.

34. Accordingly, the court accepts
the application and annuls the effect of the
letter dated 24.06.2024 appointing Shri
S.K.
Singh
as
an
Arbitrator
and
appointment of the Arbitrator.

35. Further, in exercise of the
power conferred under Section 11(6) of the
Act, 1986 the Court proposes to appoint
Justice D.K. Arora (Retired) r/o Type VII,
New Campus, SGPGI, Raebareli Road,
Lucknow as an Arbitrator to settle the
dispute between the parties.
36. Let a copy of the pleadings on
record alongwith the relevant provisions of
the Act with amending Act 2015 be sent to
Hon'ble Mr. Justice D.K. Arora, a former
Judge of this Court, for eliciting his
disclosures on format under the schedule in
terms of Section 11(8) read with Section
12(1) of the Act, 1996 and Schedule VI and
VII as amended by Act 2015, appended
thereto
and
also
his
consent
for
appointment as an Arbitrator for resolving
the dispute.

37.
Learned
counsel
for
the
applicants shall supply an additional copy
of the application to the office for the said
purpose within a week.

38. List immediately after receipt
of reply/consent.
----------
(2025) 5 ILRA 14
APPELLATE JURISDICTION
CRIMINAL SIDE
DATED: LUCKNOW 02.05.2025

BEFORE

THE HON'BLE SUBHASH VIDYARTHI, J.

Criminal Misc. Anticipatory Bail Application U/S
482 BNSS No. 398 of 2025

Prashant Shukla ...Applicant
Versus
State of U.P. & Anr. ...Opposite Parties

Counsel for the Applicant:
Rakshit Raj Singh, Ayush Agarwal

Counsel for the Opposite Party:
G.A.

Criminal Law - Bharatiya Nyaya Sanhita,
2023 - Sections 80 & 85 - Dowry
Prohibition Act, 1961 - Section 3⁄4 -
Sessions Court entertained anticipatory
bail applications of three co-accused but