Content Provider | Supreme Court of India |
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e-ISSN | 30484839 |
Language | English |
Access Restriction | NDLI |
Subject Keyword | Arbitration and Conciliation Act 1966 |
Content Type | Text |
Resource Type | Law Judgement |
Jurisdiction | India |
Case(s) Referred | Referred Case 0 Referred Case 1 Referred Case 2 Referred Case 3 Referred Case 4 Referred Case 5 Referred Case 6 Referred Case 7 Referred Case 8 Referred Case 9 Referred Case 10 Referred Case 11 Referred Case 12 Referred Case 13 |
Case Type | Appeal |
Court | Supreme Court of India |
Disposal Nature | Appeal Allowed |
Headnote | Arbitration and Conciliation Act, 1966 – s. 12(5) r/w Seventh Schedule – Arbitration and Conciliation (Amendment) Act, 2015 – Appellant filed petition before High Court under s. 14 r/w ss. 11 & 15 of the Arbitration Act, 1966 seeking termination of mandate of the originally constituted Arbitral Tribunal called as “Stationery Purchase Committee” on the ground that the Committee comprised of officers of the Respondent and as such had rendered themselves ineligible to continue as arbitrators in view of s. 12(5) read with Seventh Schedule – The petition further requested for the appointment of a new arbitrator – High Court held that the Amendment Act, 2015 which inserted s. 12(5) was effective w.e.f. 23.10.2015 and could not have retrospective operation in the arbitration proceedings already commenced unless the parties otherwise agreed and therefore when in the present case the Arbitral Tribunal was constituted much prior to the Amendment Act, 2015 and the Arbitral Tribunal commenced its proceedings, s. 12(5) was not applicable – Held: The Arbitral Tribunal-Stationery Purchase Committee consisted of officers of the Respondent-State – Therefore, as per Amendment Act, 2015 - sub-section (5) of s. 12 r/w Seventh Schedule, all of them became ineligible to become arbitrators and to continue as arbitrators – s. 12 was amended by Amendment Act, 2015 based on recommendations of the Law Commission, which specifically dealt with the issue of “neutrality of arbitrators” – To achieve the main purpose for amending the provision, namely, to provide for “neutrality of arbitrators”, sub-section (5) of s. 12 lays down that 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, he shall be ineligible to be appointed as an arbitrator – 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 s. 12 and the other party cannot insist upon the appointment of the arbitrator in terms of the arbitration agreement – In the present case, the Stationery Purchase Committee-Arbitral Tribunal comprising of officers of the respondent-State were all ineligible to become and/ or to continue as arbitrators in view of the mandate of sub-section (5) of s. 12 r/w Seventh Schedule – Such an Arbitral Tribunal cannot be permitted to continue and therefore a fresh arbitrator has to be appointed as per the Arbitration and Conciliation Act, 1996. |
Judge | Hon'ble Mr. Justice M.R. Shah |
Neutral Citation | 2022 INSC 11 |
Petitioner | Ellora Paper Mills Limited |
Respondent | The State Of Madhya Pradesh |
SCR | [2022] 16 S.C.R. 399 |
Judgement Date | 2022-01-04 |
Case Number | 7697 |
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