A share purchase dispute that began in 2010 and produced a Rs 77 crore arbitral award in 2019 has now cost the award-holder a second round in court, over an issue that had nothing to do with the merits of the underlying claim. Tarsem Jain, referred to in the company's filings as T.K. Jain, had invoked arbitration against Bharat Forge Limited and its subsidiary BF Infrastructure under a December 2010 share purchase agreement. The award he won in his favour was set aside by a Single Judge in May 2025, and the Division Bench has now dismissed his appeal against that decision.
The fight was never really about whether Bharat Forge owed Jain money under the agreement. It was about how the arbitrator who decided that question came to be appointed in the first place. Clause 20.4 of the share purchase agreement and Section 11 of the Arbitration and Conciliation Act set out a specific procedure for naming an arbitrator, and Jain did not follow it. In a reminder dated 24 July 2014, he warned that if an arbitrator was not appointed within 15 days, he would appoint one himself. He then went ahead and nominated the arbitrator on 15 December 2014, without the other side's consent.
Bharat Forge's position was that this unilateral appointment tainted everything that followed, including the award itself. The Single Judge agreed in May 2025, holding that Jain had breached the agreed procedure by stepping outside Clause 20.4 and Section 11 to name the arbitrator on his own authority. That order also dismissed an enforcement petition Jain had separately filed to collect on the award, so by the time the matter reached the Division Bench, Jain was defending against the loss of both the award and his attempt to enforce it.
On appeal, Jain argued that the arbitration had commenced before the 2015 amendment to the Arbitration and Conciliation Act, and that this timing should shield his unilateral appointment from the stricter rules on arbitrator independence that the amendment introduced. The Division Bench of Justice Avneesh Jhingan and Justice Shail Jain rejected that argument outright. The bench held that an arbitration beginning before the 2015 amendment does not, by that fact alone, make a unilateral appointment valid. The timing of the arbitration's commencement and the legality of how the arbitrator was chosen are separate questions, and a party cannot use the first to excuse a defect in the second.
The practical effect is that Jain's appeal failed on every front. The Division Bench's order, dated 1 October 2026 and received by Bharat Forge on 7 October 2026 according to the company's stock exchange disclosure, upholds the Single Judge's setting aside of the award. Bharat Forge and its subsidiary are no longer exposed to the roughly Rs 77 crore liability the award had fixed, and Jain's parallel enforcement petition remains dismissed as well.
The ruling reinforces a point that has become increasingly settled in Indian arbitration law since the Supreme Court's decisions on unilateral arbitrator appointments: a party cannot name its own arbitrator and expect the resulting award to survive scrutiny, regardless of when the arbitration clause was signed or when the dispute first arose. Parties sometimes argue that older agreements, predating the 2015 amendment's tightened conflict-of-interest rules, should be judged by older, laxer standards. This judgment treats that argument as a non-starter where the appointment itself was one-sided from the outset.
For companies on the receiving end of an arbitration invoked under an old agreement, the case is a reminder that a unilateral arbitrator appointment remains vulnerable to challenge years later, even after an award has been rendered and a separate enforcement petition has been filed. For parties drafting or relying on arbitration clauses from the pre-2015 era, the safer course is to insist on a jointly agreed arbitrator or to seek a court appointment under Section 11, rather than invoking a self-appointment clause and hoping the agreement's age will insulate the choice from later challenge.