Supreme Court Sets Aside Two Ex‑Parte Arbitration Awards, Holds Proceedings a Sham and Awards Null and Void

A bench of Chief Justice Sanjiv Khanna and Justices Sanjay Kumar and R. Mahadevan heard the appeal arising from a Division Bench order of the Allahabad High Court which had dismissed intra‑court challenges to two ex‑parte arbitration awards. The challenge involved enforcement of awards passed in favour of a former hospital employee over his age of superannuation and attendant monetary claims against the State of Uttar Pradesh and the Principal of GSVM Medical College, Kanpur.

The Supreme Court allowed the State’s appeal, set aside both ex‑parte awards dated 15.02.2008 and 25.06.2008 and held them “null and void and non‑enforceable in law.” The Court observed that an arbitration agreement was a “sine qua non” for arbitration and that the purported 1957 arbitration agreement relied upon by the respondent was not on official record, was not signed by him, and its authenticity was denied by the State. The Court noted the principle that “fraud and justice never dwell together,” and concluded that the proceedings amounted to a sham, observing the unilateral appointment of arbitrators by the claimant was contrary to the clause propounded. The Court, in its reasoning, observed: “The arbitration agreement is sine qua non for arbitration proceedings, as arbitration fundamentally relies on the principle of party autonomy; - the right of parties to choose arbitration as an alternative to court adjudication. ... There is no evidence to show the existence of the arbitration agreement, except a piece of paper, which is not even a certified copy or an authenticated copy of the official records. ... How and from where RK Pandey, Respondent No. 1, got a copy of the agreement, and that too nearly 10 years after his retirement and filing of a writ petition remains unknown.” The Court further held that execution proceedings stood dismissed and the appellants were entitled to costs.

Background The dispute concerned R.K. Pandey, who had been appointed as a lab assistant/technician at Dina Nath Parbati Bangla Infectious Disease Hospital (DNPBID) which was provincialized and taken over by the State in 1956–57 and incorporated into GSVM Medical College. Pandey had sought to be treated as retiring at 60 years (municipal service rule) instead of 58 years (State service rule) and filed a writ petition in 1997; the writ remained pending and was withdrawn in April 2009. In January 2008 Pandey filed a Section 11 petition under the Arbitration & Conciliation Act, 1996 seeking appointment of an arbitrator, but withdrew the petition; shortly thereafter two sole arbitrators, allegedly appointed by him, passed ex‑parte awards in his favour for substantial sums (Rs.26,42,116 and Rs.20,00,000 with interest). The State filed objections under Section 34 which the trial court dismissed as time‑barred; the Allahabad High Court dismissed the intra‑court appeal on the ground of limitation.

The Supreme Court scrutinised the provenance of a purported arbitration agreement dated 01.04.1957 — which was neither reflected in the 1961 transfer indenture nor found on municipal or State records — and held that arbitration required party autonomy and an authentic arbitration clause. Relying on precedents (including the Court’s observations in Bilkis Yakub Rasool v. Union of India and in Central Organisation of Railway Electrification v. ECI PIC SMO MCPL (JV)), the Court emphasised that unilateral self‑appointment of arbitrators, ex‑parte awards and lack of a genuine arbitration agreement negated subject‑matter jurisdiction and amounted to fraud. The final result was that the appeal was allowed, both awards were set aside as void, execution proceedings were dismissed and costs were awarded to the appellants.

Case Details: Case No.: 2025 INSC 48; Civil Appeal No. 10212 of 2014 Case Title: State of Uttar Pradesh and Another v. R.K. Pandey and Another Appearances: For the Petitioner(s): [Not indicated in the judgment] For the Respondent(s): [Not indicated in the judgment]