Pre-amendment arbitration law and contractual appointment procedure govern where proceedings began earlier and discharge is not clearly voluntary.

Arbitral proceedings commenced before 23 October 2015 remain governed by the pre-amendment Arbitration and Conciliation Act, 1996 because Section 26 of the 2015 Amendment excludes the amended regime once proceedings have started under Section 21, unless the parties agree otherwise. A no claim certificate and final payment do not automatically bar arbitration; the decisive question is whether the discharge was truly voluntary or was obtained under coercion, compulsion, or economic duress. Under Section 11(6), the court must ordinarily follow the contractual appointment mechanism and may depart from it only if that procedure has failed or become legally inoperative. The agreed appointment process therefore had to be respected.

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Issues: (i) whether the Arbitration and Conciliation (Amendment) Act, 2015 applied to arbitral proceedings where the request for arbitration had been received before the amendment came into force; (ii) whether signing a no claim certificate and receiving final payment necessarily resulted in accord and satisfaction so as to bar arbitration; (iii) whether the High Court could appoint an independent arbitrator under Section 11(6) without first following the contractual appointment mechanism.

Issue (i): Whether the Arbitration and Conciliation (Amendment) Act, 2015 applied to arbitral proceedings where the request for arbitration had been received before the amendment came into force.

Analysis: The commencement of arbitral proceedings is governed by Section 21 of the Arbitration and Conciliation Act, 1996, and Section 26 of the Arbitration and Conciliation (Amendment) Act, 2015 excludes application of the amended regime to proceedings that had already commenced under Section 21, unless the parties otherwise agree. Since the requests for arbitration had been received before 23 October 2015, the amended provisions could not be invoked merely because the applications under Section 11 were decided later.

Conclusion: The amended Act did not apply to these disputes, and the pre-amendment law governed the appointment process.

Issue (ii): Whether signing a no claim certificate and receiving final payment necessarily resulted in accord and satisfaction so as to bar arbitration.

Analysis: The existence of a no claim certificate is not conclusive by itself. The decisive question is whether the discharge was voluntary and genuine or was obtained under coercion, compulsion, or economic duress. On the facts, the contractors were found to be in a position where final payment was linked to furnishing such a certificate, and the dispute regarding escalation and deductions remained alive. The matter thus fell within the category where the validity of the discharge could not be treated as finally concluded at the Section 11 stage.

Conclusion: The no claim certificate did not, by itself, extinguish the arbitration claim, and the disputes remained arbitrable.

Issue (iii): Whether the High Court could appoint an independent arbitrator under Section 11(6) without first following the contractual appointment mechanism.

Analysis: Under Section 11(6) of the Arbitration and Conciliation Act, 1996, the court must first give effect to the agreed appointment procedure and resort to an alternative appointment only where the contractual mechanism fails or circumstances justify departure from it. The contract contained a specific procedure under Clause 64(3), and there was no finding that the agreed mechanism had become unworkable or that the named procedure suffered from disqualifying bias in the present cases. The mere pendency of the Section 11 petition or the later amendment could not justify bypassing the contractual scheme.

Conclusion: The High Court was not justified in directly appointing an independent arbitrator and ought to have required appointment under the agreed contractual procedure.

Final Conclusion: The disputes were held to survive for arbitration, but the arbitrator had to be appointed in accordance with the contractual mechanism rather than by bypassing it.

Ratio Decidendi: Where arbitral proceedings commenced before the 2015 amendment, the pre-amendment Act continues to govern, and a court under Section 11(6) must ordinarily respect the parties' agreed appointment procedure unless that mechanism is shown to have failed or become legally inoperative.

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