Delhi HC Appoints Sole Arbitrator in Meghalaya Hotels–IRCTC Dispute; Reiterates Bar on PSU-Curated Arbitration Panels [Read Order]

New Delhi: The Delhi High Court has allowed a petition filed by Meghalaya Hotels Private Limited under Section 11(6) of the Arbitration and Conciliation Act, 1996, appointing a sole arbitrator to adjudicate disputes arising out of a contract for the construction, operation, and maintenance of an IRCTC Budget Hotel at Lucknow.

The dispute traces back to a contract agreement dated 26 February 2018, pursuant to a Letter of Award issued on 5 February 2018, followed by a supplementary agreement dated 21 October 2019, which varied the payment schedule. Differences arose between the parties, leading the petitioner to invoke arbitration through a legal notice dated 6 September 2025. In response, IRCTC forwarded a panel of three retired Indian Railway Accounts Service officers and called upon the petitioner to select two arbitrators from the said panel.

The Court noted that such a course of action was contrary to the law laid down by the Supreme Court in Central Organisation for Railway Electrification v. ECI-SPIC-SMO-MCML (JV), wherein it was categorically held that public sector undertakings cannot mandate the opposite party to choose its nominee arbitrator from a panel unilaterally curated by the PSU, as this undermines equal participation and raises justifiable doubts regarding independence and impartiality. The High Court relied upon the Supreme Court’s observations that in a three-member tribunal, “the equal participation of parties enables the appointment of an independent and impartial third arbitrator,” and that compelling a party to select from a panel curated by the counterparty “is against the principle of equal treatment contained under Section 18” of the 1996 Act.

The Court further observed that despite the petitioner having specifically brought this settled legal position to the notice of IRCTC while invoking arbitration, the respondent persisted with the same panel-based appointment mechanism. The Court remarked that such conduct reflects a disregard for binding precedent, particularly when the law has been reiterated repeatedly by constitutional courts.

Taking note of the submission made on behalf of IRCTC that the dispute involved a claim of approximately ₹3.5 crore, and with the consent of both parties, the Court decided to appoint a sole arbitrator instead of constituting a three-member tribunal. It held that there existed a valid arbitration agreement and live disputes between the parties requiring adjudication through arbitration.

Accordingly, the Court appointed Mr. Sanjeev Jain, retired Principal Judge, Family Courts (South-West), as the sole arbitrator to adjudicate the disputes between the parties. The arbitration is to be conducted under the aegis and rules of the Delhi International Arbitration Centre, and the remuneration of the arbitrator shall be governed by the DIAC (Administrative Cost and Arbitrators’ Fees) Rules, 2018. The Court clarified that all rights and contentions of the parties, including objections on arbitrability, claims, counter-claims, and merits of the dispute, were left open for adjudication by the arbitral tribunal.

While disposing of the petition, the Court also directed the signatory of IRCTC’s letter proposing the panel of arbitrators to file an affidavit explaining the basis for seeking appointment from a PSU-curated panel, noting that such action appeared to be in direct violation of the law laid down by the Supreme Court.

Case Details:
Meghalaya Hotels Private Limited v. Indian Railway Catering and Tourism Corporation Limited, ARB.P. 2064/2025, decided on 11 December 2025 by the High Court of Delhi, before Justice Jasmeet Singh.

Advocates:
For the Petitioner: Dr. Swaroop George, Abhinandan Jain, Shivam Prajapati, Abhigyan Dwivedi and Kartikey.
For the Respondent: Lalit Chauhan, Laxmi Chauhan, Manish Yadav, Anith Johnson and Rustam Singh Chauhan.

[Read Order]