Pre-2015 unilateral arbitrator appointments cannot be invalidated retrospectively under the 2015 amendment, Delhi High Court rules

The High Court of Delhi considered a batch of 19 petitions under Sections 34 and 36 of the Arbitration and Conciliation Act, 1996, challenging arbitral awards on various grounds, principally the alleged unilateral appointment and consequent lack of independence of the arbitrator

The matters were classified according to the dates on which the arbitration, arbitral award and court proceedings occurred vis-à-vis 23 October 2015, the commencement date of the Arbitration and Conciliation (Amendment) Act, 2015: Category A comprised arbitrations and awards preceding that date but Section 34 proceedings instituted thereafter; Category B comprised arbitrations commenced before that date but awards and Section 34 proceedings after it; and Category C comprised pre-amendment arbitrations containing clauses referring to statutory modifications or re-enactments of the arbitration law

The Court was required to answer common questions of law and expressly left the factual merits of the individual petitions to the Roster Bench

1. Whether an objection to unilateral appointment or de jure ineligibility of an arbitrator is maintainable in proceedings under Section 34 of the Arbitration and Conciliation Act, 1996

2. Whether the amendments introduced by the 2015 Amendment Act, particularly Section 12(5) and the Seventh Schedule, apply to arbitrations commenced before 23 October 2015 merely because the award or Section 34 proceedings occurred after that date

3. Whether a general contractual reference to the Arbitration Act, 1940 or the 1996 Act “or any statutory modification, re-enactment or amendment thereof” constitutes an agreement under Section 26 of the 2015 Amendment Act to apply the amended regime to pre-amendment arbitrations

4. Whether the Constitution Bench decision in Central Organisation for Railway Electrification v. ECI SPIC SMO MCML (JV) and the decision in Bhadra International (India) (P) Ltd. v. Airports Authority of India retrospectively invalidate unilateral appointments made before 23 October 2015

The Court applied Section 26 of the Arbitration and Conciliation (Amendment) Act, 2015, which preserves the unamended regime for arbitral proceedings commenced under Section 21 before 23 October 2015 unless the parties otherwise agree, while applying the amendment to later proceedings

It relied on BCCI v. Kochi Cricket Pvt. Ltd., which distinguishes arbitral proceedings from court proceedings and holds that Section 26 must be construed to apply the amendment to post-23 October 2015 court proceedings without retrospectively altering the substantive law governing an already-commenced arbitration

Section 12(5), read with the Seventh Schedule, was treated as a substantive provision creating a new statutory disqualification or de jure ineligibility, rather than as a merely clarificatory or procedural provision

Under the pre-2015 law, contractual appointment procedures retained primacy, and unilateral or employee appointments were not invalid solely on that account, though they could be challenged on proof of actual or justifiable apprehension of bias, as recognised in Indian Oil Corpn. Ltd. v. Raja Transport (P) Ltd., Aravali Power Co. (P) Ltd. v. Era Infra Engineering Ltd., and related authorities

The Court also applied Bharat Broadband Network Ltd. v. United Telecoms Ltd., Ssangyong Engineering & Construction Co. Ltd. v. NHAI, S.P. Singla Constructions (P) Ltd. v. State of H.P., Parmar Construction Co., Rajasthan Small Industries Corporation Ltd., and Avneet Soni v. Kavita Agrawal.

Bhadra International was understood as affirming the maintainability of a Section 34 objection to an ineligible arbitrator, but not as retrospectively imposing the Section 12(5) disqualification on appointments made before 23 October 2015

For contractual adoption of the amended regime, Ratnam Sudesh Iyer v. Jackie Shroff and Jagdish Chand Gupta v. Union of India established that the result depends on the wording of the clause and the subsequent conduct of the parties

The Court held that a Section 34 petition is connected to, and cannot be treated as wholly divorced from, the underlying arbitral proceedings; therefore, the later institution of the court proceeding cannot retrospectively subject a pre-23 October 2015 arbitration to every substantive amendment introduced in 2015

Since Section 12(5) introduced a new statutory ineligibility, the validity of an arbitrator’s appointment had to be assessed under the law applicable when the arbitration commenced and the appointment was made.

Under the pre-amendment regime, unilateral appointment was not automatically void, although a specific challenge based on bias, lack of independence or another then-existing statutory infirmity remained available

The Court rejected the submission that Bhadra International or CORE retrospectively invalidated all pre-2015 unilateral appointments; CORE did not overrule the pre-2015 authorities recognising such appointment mechanisms and its prospective direction could not be used to override Section 26

In Category C matters, a bare reference to future amendments was insufficient by itself. However, a clause specifically referring to “statutory modification”, read with conduct showing that both parties invoked or accepted the amended provisions, could amount to an agreement under Section 26 to opt into the amended regime

Accordingly, for Categories A and B, a Section 34 petition filed after 23 October 2015 does not, merely for that reason, attract Section 12(5) or the Seventh Schedule in respect of an arbitration commenced before the cut-off date

For Category C, the amended regime may apply where the contractual language and subsequent conduct establish a clear agreement to adopt statutory modifications

No individual petition was finally adjudicated on its facts; all matters were directed to be listed before the Roster Bench for further proceedings, with the batch to be listed on 14 September 2026