ABC Ltd. and XYZ Ltd. had executed an agreement. As per the contract, XYZ Ltd. was to provide manufacturing, civil and manpower services at project site of ABC Ltd. There were certain timelines for each activity, on fail

The Supreme Court, by its judgment in TRF Ltd. v. Energo Engineering Projects Ltd., (2017) 8 SCC 377 (rendered on 03.07.2017), held that since a Managing Director of a company which was one of the parties to the arbitration, was himself ineligible to act as arbitrator, such ineligible person could not appoint an arbitrator, and any such appointment would have to be held to be null and void. The facts of the case referred by XYZ limited do not correspond to TRF Limited and hence same case cannot be relied upon in the given question. Section 7 of the Arbitration and Conciliation Act, 1996 defines arbitration agreement as under: (1) In this Part, "arbitration agreement" means an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not. (2) An arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement. Section 11 of the Arbitration and Conciliation Act, 1996 provides for appointment of arbitrators.- (1) A person of any nationality may be an arbitrator, unless otherwise agreed by the parties. (2) Subject to sub-section (6), the parties are free to agree on a procedure for appointing the arbitrator or arbitrators. Therefore, arbitrator must be appointed in according to the procedure agreed between the parties. In the given case, as per the Arbitration clause, the Chairman and Managing Director of ABC Ltd. was the competent authority to appoint the arbitrator and accordingly he nominated one Roshan as the sole arbitrator. As arbitrator in the question is appointed according to arbitration agreement, therefore, the same cannot be challenged.