2022/DHC/004781

$~J~
* IN THE HIGH COURT OF DELHI AT NEW DELHI

Date of decision: 09th November 2022

+ O.M.P. (T) (COMM.) 63/2020
RAM KRIPAL SINGH CONSTRUCTION PVT. LTD ...... Petitioner
Through: Mr. Amit Pawan, Mr. Hassan Zobair
Waris, Mr. Aakarsh & Ms. Shivangi,
Advocates.
versus
NTPC ..... Respondent
Through: Mr. R. Sudhinder, Advocate with Mr.
Nikhil Kumar Singh, Advocate.
CORAM:
HON'BLE MR. JUSTICE ANUP JAIRAM BHAMBHANI
J U D G M E N T

ANUP JAIRAM BHAMBHANI J.

By way of the present petition under section 14 of the Arbitration

& Conciliation Act 1996 („A&C Act‟, for short), the petitioner seeks
termination of the mandate of the learned Sole Arbitrator appointed by
the respondent vide communication dated 14.05.2020 in relation to
disputes that are stated to have arisen with the respondent from Letter of
Award dated 17.12.2010, which related to the setting-up of a township
for the respondent‟s Super Thermal Power Project at Barh, Bihar; the
issuance of the letter of award having culminated in the parties signing a
Contract Agreement dated 01.02.2011 („contract‟). For completeness, it
is necessary to mention that prior to appointing the arbitrator whose
termination has been sought by way of the present petition, the

Signature Not Verified

OMP (T)(COMM) 63/2020
Digitally Signed
Page 1 of 17
By:NEERAJ
Signing Date:11.11.2022
17:09:35
 2022/DHC/004781

respondent had also appointed an arbitrator earlier, who had terminated

the proceedings for the reasons as detailed below.
2. Notice on the termination petition was issued on 23.10.2020; whereupon
the respondent filed a reply dated 11.12.2020; which was followed by
the petitioner‟s rejoinder dated 26.03.2021.
3. In support of the plea for termination, Mr. Amit Pawan, learned counsel
for the petitioner submits as follows :
3.1 That the petitioner first invoked arbitration vide notice dated
27.01.2014; whereupon the respondent appointed the Joint
General Manager, NTPC Ltd. Barh as the sole arbitrator („1st
Arbitrator‟). However, the 1st Arbitrator terminated the
proceedings under section 25(a) of the A&C Act on 22.06.2016
for want of the petitioner filing a statement of claim before him.
Thereafter, on 11.02.2020, the petitioner filed an application for
recall of order dated 22.06.2016; whereupon the Chairman &
Managing Director („CMD‟), NTPC appointed Mr. Asit Kumar
Mukherjee as the arbitrator („2nd Arbitrator‟) to decide the recall
application;
3.2 On 16.09.2020 the petitioner wrote a letter to the respondent‟s
CMD objecting to the appointment of the 2nd Arbitrator, since the
said person was the Regional Executive Director of the
respondent, apart from being the Project Head of the project in
relation to which disputes had arisen. The petitioner‟s contention
was that the disclosures made by the 2nd Arbitrator so appointed
under section 12 of the A&C Act, showed that his appointment
was not in conformity with the extant position of law post the

Signature Not Verified

OMP (T)(COMM) 63/2020
Digitally Signed
Page 2 of 17
By:NEERAJ
Signing Date:11.11.2022
17:09:35
 2022/DHC/004781

coming into force of the Arbitration & Conciliation (Amendment)

Act, 2015 (Act No. 3 of 2016) („Amendment Act-2015‟); and
hence the petitioner sought appointment of another arbitrator;
3.3 It is stated on behalf of the petitioner however, that the respondent
forwarded the petitioner‟s objection to the 2nd Arbitrator himself;
who, on 21.09.2020, held that the Amendment Act-2015 would
not apply to the proceedings, which had been invoked prior to the
coming into force of the amendment; and that therefore, it was
within his remit to deal with the disputes. Thereafter, on
05.10.2020, the petitioner requested the 2nd Arbitrator to keep the
arbitral proceedings pending, since the petitioner was initiating
legal proceedings, which request was denied by the 2nd Arbitrator
on the same day;
3.4 On 15.10.2020 the petitioner filed the present petition, seeking
termination of the 2nd Arbitrator‟s mandate; but soon thereafter, on
21.10.2020, during the pendency of the termination petition, the
2nd Arbitrator passed an order rejecting the petitioner‟s application
for recall of order dated 22.06.2016;
3.5 It is the petitioner‟s contention that after the first round of arbitral
proceedings was terminated by the 1st Arbitrator, on the ground
that the petitioner had failed to file its statement of claim, when
the CMD, NTPC proceeded to appoint the 2nd Arbitrator, section
12(5) had already been inserted in the A&C Act, which
amendment was therefore already in force; and since the person
appointed was admittedly the Regional Executive Director of the
respondent and the Project Head of the project in relation to which

Signature Not Verified

OMP (T)(COMM) 63/2020
Digitally Signed
Page 3 of 17
By:NEERAJ
Signing Date:11.11.2022
17:09:35
 2022/DHC/004781

the disputes had arisen, such person was de-facto and de-jure
ineligible to be appointed as arbitrator; and his mandate must
therefore be terminated.
4. In support of the aforementioned arguments, counsel for the petitioner
relies on the following judicial precedents:
4.1 SREI Infrastructure Finance Ltd. vs. Tuff Drilling Pvt. Ltd.1, on
the point that termination of arbitral proceedings under section 25
is different from termination under section 32(2) of the A&C Act;
4.2 Omaxe Infrastructure and Construction Ltd. vs. Union of India
& Anr. 2 , on the applicability of the Amendment Act-2015 to
disputes where arbitration was invoked pre-amendment, but the
appointment of the arbitrator was made post-amendment;
4.3 KKR Infra Projects Pvt. Ltd. vs. Union of India 3 ,on the
applicability of the Amendment Act-2015 to a case where a
second arbitrator was appointed in the same arbitral proceedings,
however post-amendment;
4.4 Ellora Paper Mills Ltd. vs. State of Madhya Pradesh4, on the
applicability of the Amendment Act-2015 to a case where an
arbitral tribunal was appointed pre-amendment, however arbitral
proceedings had not commenced until post-amendment.
5. In opposition to the petition, Mr. R. Sudhinder, learned counsel for the
respondent has raised several objections, of which the following are
material for a decision of the present matter :

1
(2018) 11 SCC 470
2
2018 SCC Online Del 8914
3
2018 SCC Online Del 12418
4
2022 SCC Online SC 8

Signature Not Verified

OMP (T)(COMM) 63/2020
Digitally Signed
Page 4 of 17
By:NEERAJ
Signing Date:11.11.2022
17:09:35
 2022/DHC/004781

5.1 Since under section 25 of the A&C Act, an arbitrator is entitled to

terminate the proceedings if a claimant defaults in filing its
statement of claim within the time granted by the arbitrator, an
application seeking recall of such order is also required to be
decided by the arbitrator himself. Once an arbitrator dismisses
such application for recall, the order so passed becomes an
„award‟ and the arbitral tribunal becomes functus officio; and any
challenge to such order would only lie under section 34 of the
A&C Act as a challenge to an award;
5.2 In the present case, the petitioner filed its recall application on
11.02.2020 i.e. almost 04 years after the arbitral proceedings had
been terminated on 22.06.2016 by the 1st Arbitrator. In these
circumstances, the CMD, NTPC appointed a 2nd Arbitrator to
consider the recall application, who, after duly considering the
application, dismissed it by order dated 21.10.2020 since the
petitioner had failed to disclose sufficient cause for recall of the
termination order. Such an order was just and fair, and in any
case, is amenable to challenge only under section 34 of the A&C
Act;
5.3 The appointment of the 2nd Arbitrator is valid since it was made in
arbitral proceedings that commenced on 27.01.2014 by way of
issuance of the invocation notice under section 21, which was
issued prior to the amendment inserting section 12(5) in the A&C
Act with retrospective effect from 23.10.2015. By reason thereof,
section 12(5) is not applicable to the arbitral proceedings and the
appointment of the 2nd Arbitrator cannot be faulted on that ground;

Signature Not Verified

OMP (T)(COMM) 63/2020
Digitally Signed
Page 5 of 17
By:NEERAJ
Signing Date:11.11.2022
17:09:35
 2022/DHC/004781

5.4 The appointment of the 2nd Arbitrator was made by the CMD,
NTPC as per the procedure agreed to between the parties and was
therefore in conformity with the law as it stood prior to the
Amendment Act-2015, which came into force after the date of
commencement of arbitral proceedings in this case;
5.5 Additionally, the arbitration agreement comprised in clause 56 of
the GCCs expressly stipulates that if an arbitrator cannot be
appointed by the CMD, NTPC in the manner agreed upon, then
the disputes would not be referred to arbitration at all. The
foundation of arbitration proceedings being the consent of parties,
such proceedings cannot be thrust upon the respondent contrary to
the terms it had agreed upon. It is the respondent‟s contention that
the procedure for appointment of an arbitrator cannot be severed
from clause 56, to selectively give effect only to the agreement to
arbitrate, while ignoring the other clauses, especially when the
arbitration clause expressly says that if the arbitrator is not
appointed in accordance with the procedure agreed upon between
the parties, the disputes would not be referred to arbitration at all;
5.6 For the foregoing reasons, the challenge to the mandate of the 2nd
Arbitrator is misconceived, misplaced and premised on a wrong
notion of the law.
6. In support of the above arguments, counsel for the respondent relies on
the following judgements:

Signature Not Verified

OMP (T)(COMM) 63/2020
Digitally Signed
Page 6 of 17
By:NEERAJ
Signing Date:11.11.2022
17:09:35
 2022/DHC/004781

6.1 SREI Infrastructure Finance Ltd. vs. Tuff Drilling Pvt. Ltd.5, to
urge that termination of arbitral proceedings under section 25 is
different from termination under section 32(2) of the A&C Act;
and when a tribunal rejects a statement of claim filed late after due
application of mind, such order becomes an award, which can only
be challenged under section 34 of the A&C Act;
6.2 Angelique International Ltd. vs. SSJV Projects Pvt Ltd.6, on the
proposition that a challenge to an arbitral tribunal‟s order
dismissing arbitral proceedings for want of statement of claim,
must be by way of a petition under section 34 of the A&C Act,
and not under section 14 and 15 of the A&C Act;
6.3 ATV Projects India Ltd. vs. Indian Oil Corporation Ltd. & Anr.7,
Awasthi Construction vs. GNCTD &Anr.8 and M.L. Lakhanpal
vs. Darshan Lal &Anr. 9 , on the proposition that dismissal of
proceedings under section 25(a) of the A&C Act is deemed to be
an „award‟ and hence must be challenged under section 34 of the
A&C Act;
6.4 Union of India vs. Pradeep Vinod Construction Company10, on
the proposition that the Amendment Act-2015 is not applicable to
arbitrations where notice for arbitration was issued prior to
Amendment Act-2015 coming into force; and that therefore

5
(2018) 11 SCC 470
6
2018 SCC Online Del 8287
7
2013 SCC Online Del 1669
8
2022 SCC Online Del 5443
9
2018 SCC Online Del 6833
10
(2020) 2 SCC 464

Signature Not Verified

OMP (T)(COMM) 63/2020
Digitally Signed
Page 7 of 17
By:NEERAJ
Signing Date:11.11.2022
17:09:35
 2022/DHC/004781

appointment of the arbitrator should be as per the agreed

procedure in the arbitration clause;
6.5 Union of India vs. Parmar Constructions 11, on the applicability
of the Amendment Act-2015 to proceedings that have commenced
under section 21 of the A&C Act prior to the amendment coming
into effect;
6.6 S.P Singla Constructions Pvt. Ltd. vs. State of Himachal
Pradesh &Anr. 12 , for the proposition that a challenge to the
appointment of an arbitrator is to be considered in light of the
terms of the agreement between the parties;
13
6.7 Veekay General Industries vs. Union of India , on the
proposition that arbitration cannot be thrust upon parties, if one of
the parties (the Railways in that case) cannot appoint an arbitrator
as stipulated in the arbitration clause;
6.8 Indian Oil Corporation Ltd. &Ors vs. Raja Transport Pvt. Ltd.14,
on the point that the appointment of an employee of one of the
parties as an arbitrator, in the pre-amendment time, cannot per-se
be a bar to his acting as an arbitrator.
7. Although the respondent has also made submissions as to how the
apprehension of bias and partiality against the 2nd Arbitrator is
misplaced, in the opinion of this court, those submissions are not
material for deciding the present petition, since the issue here must be
decided as a matter of law.

11
(2019) 15 SCC 482
12
(2019) 2 SCC 488
13
2017 SCC Online Cal 5835
14
(2009) 8 SCC 520

Signature Not Verified

OMP (T)(COMM) 63/2020
Digitally Signed
Page 8 of 17
By:NEERAJ
Signing Date:11.11.2022
17:09:35
 2022/DHC/004781

Discussions & Conclusions

8. Although a plethora of judgements have been cited in support and in
opposition of the termination petition, and several grounds have been
taken, in the opinion of this court, the decision of the present matter
turns on one short point, and that is :
Whether the appointment of the 2nd Arbitrator by the CMD,
NTPC on 14.05.2020, in arbitral proceedings which had
commenced vide invocation notice dated 27.01.2014, is
required to comply with the mandate of section 12(5) of the
A&C Act inserted vide the Amendment Act-2015 with
retrospective effect from 23.10.2015 ?
The nuance here being, that though arbitral proceedings
commenced prior to the coming into force of section 12(5), the
appointment of 2nd Arbitrator was made after section 12(5) was already
in force. To be clear, the decision of the 2nd Arbitrator to reject the recall
application and to hold that arbitral proceedings were validly terminated
by the 1st Arbitrator, can only be valid if the appointment of the 2nd
Arbitrator was itself valid in law.
9. In the opinion of this court, the answer to the foregoing query is found in
a meaningful reading of section 12(5) of the A&C Act, inserted by the
Amendment Act-2015 with retrospective effect from 23.10.2015 and the
judicial view taken thereon.
10. Section 12(5) reads as under:
“Section 12. Grounds for challenge-
(1) When a person is approached in connection with his possible
appointment as an arbitrator, he shall disclose in writing any
circumstances :
(a)…
(b)…

Signature Not Verified

OMP (T)(COMM) 63/2020
Digitally Signed
Page 9 of 17
By:NEERAJ
Signing Date:11.11.2022
17:09:35
 2022/DHC/004781

(2) An arbitrator, from the time of his appointment and

throughout the arbitral proceedings, shall, without delay,
disclose to the parties in writing any circumstances referred to
in sub-section (1) unless they have already been informed of
them by him.
(3) …
(4) A party may challenge an arbitrator appointed by him, or in
whose appointment he has participated, only for reasons of
which he becomes aware after the appointment has been
made.
(5) Notwithstanding any prior agreement to the contrary, any
person whose relationship, with the parties or 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:

Provided that parties may, subsequent to disputes having arisen

between them, waive the applicability of this sub-section by an express
agreement in writing.”
(emphasis supplied)
11. Emphasizing the need for independence and impartiality of arbitrators,
based on the recommendations made in the 246th Law Commission
Report, with the aim and intent of ensuring „neutrality‟ of arbitrators, in
its recent decision in Ellora Paper Mills Limited (supra), in a somewhat
similar fact situation, the Supreme Court has held as follows:
“11.3 The learned counsel appearing on behalf of the respondent has
also submitted that in the facts and circumstances of the case, the
decision of this Court in Jaipur Zila Dugdh Utpadak Sahkari Sangh
[(2021) 17 SCC 248] is not applicable. It is submitted that in the said
case, the arbitrator was appointed after amendment of the Arbitration
Act, 2015. However, in the present case, the arbitrator was appointed
approximately 20 years prior thereto and thereafter the arbitration
proceedings commenced and even the appellant also participated. It is
therefore contended that the amended Section 12(5) of the Arbitration
Act which is brought in the statute by way of amendment in 2015 shall

Signature Not Verified

OMP (T)(COMM) 63/2020
Digitally Signed
Page 10 of 17
By:NEERAJ
Signing Date:11.11.2022
17:09:35
 2022/DHC/004781

not be applicable retrospectively. It is submitted that Section 12(5) of

the Arbitration Act shall have to be made applicable prospectively.
*****
“16. …… In such an eventuality i.e. when the arbitration clause is
found to be foul with the amended provision, the appointment of the
arbitrator would be beyond the pale of the arbitration agreement,
empowering the Court to appoint such an arbitrator as may be
permissible. That would be the effect of the non obstante clause
contained in sub-section (5) of Section 12 and the other party cannot
insist upon the appointment of the arbitrator in terms of the
arbitration agreement.
“17. It cannot be disputed that in the present case, the Stationery
Purchase Committee – Arbitral Tribunal comprising of officers of the
respondent State are all ineligible to become and/or to continue as
arbitrators in view of the mandate of sub-section (5) of Section 12
read with Seventh Schedule. Therefore, by operation of law and by
amending Section 12 and bringing on statute sub-section (5) of
Section 12 read with Seventh Schedule, the earlier Arbitral Tribunal –
Stationery Purchase Committee comprising of the Additional
Secretary, Department of Revenue as President, and : (i) Deputy
Secretary, Department of Revenue, (ii) Deputy Secretary, General
Administration Department, (iii) Deputy Secretary, Department of
Finance, (iv) Deputy Secretary/Under-Secretary, General
Administration Department, and (v) Senior Deputy Controller of Head
Office, Printing as Members, has lost its mandate and such an
Arbitral Tribunal cannot be permitted to continue and therefore a
fresh arbitrator has to be appointed as per the Arbitration Act, 1996.
“18. … There are certain minimum levels of independence and
impartiality that should be required of the arbitral process
regardless of the parties’ apparent agreement. A sensible law cannot,
for instance, permit appointment of an arbitrator who is himself a
party to the dispute, or who is employed by (or similarly dependent
on) one party, even if this is what the parties agreed.”

(emphasis supplied)

12. It is also beneficial at this point to refer briefly to the judgment of the
Supreme Court in Voestalpine Schienen GMBH vs. Delhi Metro Rail

Signature Not Verified

OMP (T)(COMM) 63/2020
Digitally Signed
Page 11 of 17
By:NEERAJ
Signing Date:11.11.2022
17:09:35
 2022/DHC/004781

15
Corpn. Ltd , which discusses the need for independence and
impartiality in an arbitrator in the broader perspective, quoting from the
authoritative text of “O.P. Malhotra, The Law and Practice of
Arbitration and Conciliation”(3rd Ed.), revised by Ms. Indu Malhotra
(subsequently Hon‟ble Judge, Supreme Court of India) in the following
words:

“20. Independence and impartiality of the arbitrator are the

hallmarks of any arbitration proceedings. Rule against bias is one of
the fundamental principles of natural justice which applied to all
judicial and quasi-judicial proceedings. It is for this reason that
notwithstanding the fact that relationship between the parties to the
arbitration and the arbitrators themselves are contractual in nature
and the source of an arbitrator’s appointment is deduced from the
agreement entered into between the parties, notwithstanding the same
non-independence and non-impartiality of such arbitrator (though
contractually agreed upon) would render him ineligible to conduct the
arbitration. The genesis behind this rational is that even when an
arbitrator is appointed in terms of contract and by the parties to the
contract, he is independent of the parties. Functions and duties require
him to rise above the partisan interest of the parties and not to act in,
or so as to further, the particular interest of either parties. After all, the
arbitrator has adjudicatory role to perform and, therefore, he must be
independent of parties as well as impartial.”

(emphasis supplied)

13. Though there is no cavil that the prevailing view as taken by the
Supreme Court inter-alia in Parmar Constructions and Pradeep Vinod
Construction Company (supra) is that the amendments brought in by
way of Amendment Act-2015 apply to arbitration proceedings
that commence - within the meaning of section 21- after the Amendment
15
(2017) 4 SCC 665

Signature Not Verified

OMP (T)(COMM) 63/2020
Digitally Signed
Page 12 of 17
By:NEERAJ
Signing Date:11.11.2022
17:09:35
 2022/DHC/004781

Act-2015 came into force on 23.10.2015, those decisions do not deal

with a fact situation that obtains in the present case. In the present
matter, an arbitrator is to be appointed at the present time when the
amendments are already in force though in proceedings that commenced
before the amendments came into force.
14. In the opinion of this court, the verdict of the Supreme Court in its most
recent decision in Ellora Paper Mills Limited (supra), is therefore more
germane to the present fact situation.
15. Now, in light of the judicial precedents referred to above, section 12 may
be parsed in the following way:
15.1 In Sections 12(1) and 12(2) set-out the disclosures required of an
arbitrator affecting his independence or impartiality when he is
approached in connection with his possible appointment as an
arbitrator. Section 12(1) refers to the disclosures required at the
stage when a person is approached for their possible appointment;
and section 12(2) casts an obligation on an arbitrator throughout
the arbitral proceedings to disclose any circumstances (unless
already informed to the parties) that may give rise to justifiable
doubts as to their independence or impartiality.
15.2 Sections 12(3) and 12(4) set-out grounds relating to independence,
impartiality and qualifications, on which an arbitrator may be
challenged; specifically permitting a party to challenge an
arbitrator even if the party has appointed or participated in their
appointment, for reasons which the party may have become aware
of after the appointment has been made.

Signature Not Verified

OMP (T)(COMM) 63/2020
Digitally Signed
Page 13 of 17
By:NEERAJ
Signing Date:11.11.2022
17:09:35
 2022/DHC/004781

15.3 Section 12(5), on the other hand, sets-out the criteria or grounds
that would make a person „ineligible‟, that is to say per-se
disqualified, for appointment as an arbitrator as a matter of
statutory presumption, setting-out the categories of relationships
which would attract such disqualification in the Seventh Schedule
to the A&C Act.
16. Needless to say that ineligibility for appointment must necessarily be
tested at the threshold, when the appointment is to be made; and
therefore, for it to be meaningful and not otiose, section 12(5) must
apply regardless of whether the arbitration proceedings themselves
commenced before or after coming into force of the Amendment Act-
2015, provided the appointment of the arbitrator is being considered on a
date when section 12(5) is in force.
17. Furthermore, looking at the overall scheme and purpose of section 12,
independence and impartiality of an arbitrator is a continuing
requirement since it goes to the very root of the credibility of the arbitral
proceedings; and a person who is ineligible cannot be appointed as an
arbitrator on the facetious plea that since arbitral proceedings had
commenced prior to the coming into force of section 12(5), parties
would have to suffer an ineligible person being appointed or continuing
as their arbitrator. Any other interpretation of section 12(5) would defeat
the legislative intent that informed the amendment.
18. Keeping in mind the purpose and intendment of the Legislature in
inserting section 12(5), in the opinion of this court, only one inference
arises, viz. that if an arbitrator is appointed after section 12(5) has come
into force, the arbitrator would be ineligible if he does not pass muster

Signature Not Verified

OMP (T)(COMM) 63/2020
Digitally Signed
Page 14 of 17
By:NEERAJ
Signing Date:11.11.2022
17:09:35
 2022/DHC/004781

on the anvil of the Seventh Schedule read in context of section 12(5) of

the A&C Act. This position would obtain regardless of whether the
arbitral proceedings themselves commenced prior to, or post, coming
into force of the Amendment Act-2015, provided the arbitrator is being,
or has been, appointed after the amendment took effect.
19. In the present case, the 1st Arbitrator terminated the arbitral proceedings
by order dated 22.06.2016, whereafter he is stated to have
superannuated. Subsequently therefore, when the petitioner filed the
recall application, the CMD, NTPC thought it appropriate to appoint the
2nd Arbitrator who is the Regional Executive Director of the respondent,
and, if the petitioner is correct, was also the Project Head of the project
from which the disputes have arisen. Whether or not the 2nd Arbitrator
was Project Head is irrelevant for purposes of the present petition, since
admittedly he is the Regional Executive Director of the respondent.
20. What the CMD, NTPC conducted was doubtlessly a fresh exercise for
appointment of an arbitrator, which culminated in the appointment of
the 2nd Arbitrator on 14.05.2020 at a point in time when section 12(5)
had already come on the statute book, having been brought into effect
from 23.10.2015. If therefore the 2nd Arbitrator was per-se ineligible for
appointment in view of the Seventh Schedule to the A&C Act, he could
not have been appointed as a matter of law.
21. Regrettably, based on the admitted facts obtaining in the present case,
the 2nd Arbitrator does not pass muster in that regard; since he is
concededly the Regional Executive Director of the respondent and
therefore attracts the disqualification of being “ ... a manager, director
or part of the management .... in one of the parties” as listed at Serial

Signature Not Verified

OMP (T)(COMM) 63/2020
Digitally Signed
Page 15 of 17
By:NEERAJ
Signing Date:11.11.2022
17:09:35
 2022/DHC/004781

No. 12 of the Seventh Schedule. The 2nd Arbitrator is therefore de-facto

and de-jure ineligible and could never have been appointed as arbitrator
in the matter. It may be observed that there is also no assertion that
subsequent to the disputes having arisen, the petitioner has in any way
waived the applicability of section 12(5) by any express agreement in
writing.
22. Consequently, the decision of the 2nd Arbitrator rejecting the recall
application, upholding the termination of the arbitral proceedings by the
1st Arbitrator, also cannot be sustained but only because the 2nd
Arbitrator had no jurisdiction to make that decision.
23. This court would however, hasten to add, that this is not an expression of
opinion on the merits of termination order dated 22.06.2016 passed by
the 1st Arbitrator; and any challenge to that termination may be decided
by a validly appointed arbitrator, on its own merits, in accordance with
law.
24. At this point, the question also arises as to what the sequitur to
terminating the mandate of the 2nd Arbitrator would be? The answer to
this is contained in section 14 of the A&C Act itself, which contemplates
not only termination of the mandate of an arbitrator but also the
substitution of the arbitrator by another.
25. Accordingly, in view of the above discussion, the present petition is
allowed; the mandate of Mr. Asit Kumar Mukherjee, the learned Sole
Arbitrator appointed by the respondent is terminated; order dated
21.10.2020 upholding the termination of arbitral proceedings, is also set-
aside; and Hon‟ble Mr. Justice Aftab Alam, former Judge, Supreme
Court of India (Cellphone No.: +91 9868219005) is appointed as the

Signature Not Verified

OMP (T)(COMM) 63/2020
Digitally Signed
Page 16 of 17
By:NEERAJ
Signing Date:11.11.2022
17:09:35
 2022/DHC/004781

learned Sole Arbitrator to adjudicate upon the disputes between the

parties.
26. The learned Arbitrator may proceed with the arbitral proceedings subject
to furnishing to the parties requisite disclosures as required under section
12 of the A&C Act; and in the event there is any impediment to the
appointment on that count, the parties are given liberty to file an
appropriate application in this court.
27. The learned Arbitrator shall be entitled to fee in accordance with the
Fourth Schedule to the A&C Act; or as may otherwise be agreed to
between the parties and the learned Arbitrator.
28. Parties shall share the arbitrator‟s fee and arbitral costs, equally.
29. All rights and contentions of the parties in relation to the claims/counter-
claims are kept open, to be decided by the learned Arbitrator on their
merits, in accordance with law.
30. For completeness it may be recorded, that though the learned Arbitrator
appointed in the present case is the same as the learned Arbitrator
appointed in the connected dispute vide Arb. P. No. 582/2020; the
present reference will be treated as a separate reference though before
the same learned Arbitrator.
31. Parties are directed to approach the learned Arbitrator appointed within
10 days.
32. The petition stands disposed-of in the above terms.
33. Other pending applications, if any, also stand disposed-of.

ANUP JAIRAM BHAMBHANI, J

NOVEMBER 09, 2022/Ne/uj/ds

Signature Not Verified

OMP (T)(COMM) 63/2020
Digitally Signed
Page 17 of 17
By:NEERAJ
Signing Date:11.11.2022
17:09:35