SUPREME COURT : In Rajasthan Small Industries Corporation Ltd. vs. M/s Ganesh Containers Movers Syndicate

Whether section 12 of the Arbitration and Conciliation (Amendment) Act, 2015 be retrospective whereby the employee of one of the party becomes ineligible to act as an Arbitrator? It was held that, as per Section 26 of the Amended Act, the provisions of the Amended Act shall not apply to the arbitral proceedings commenced in accordance with the provisions of Section 21 of the Principal Act, before the commencement of this Amended Act unless the parties otherwise agree.

After the amendment to the Arbitration and Conciliation Act, 2015, Section 12(5) prohibits the employee of one of the parties from being an arbitrator. In the present case, the agreement between the parties was entered into on 28.01.2000 and the arbitration proceedings commenced way back in 2009 and thus, the respondent cannot invoke Section 12(5) of the Arbitration and Conciliation (Amendment) Act, 2015. As per Section 26 of the Act, the provisions of the amended Act 2015 shall not apply to the arbitral proceedings commenced in accordance with the provisions of Section 21 of the principal Act, before the commencement of this Act unless the parties otherwise agree.

Link : https://www.sci.gov.in/supremecourt/2016/24069/24069_2016_Judgement_23-Jan-2019.pdf