Petition to Replace Arbitrator Dismissed: Amended Law Not Retroactive (5)

The court dismissed the petitioner's application seeking termination of the Arbitral Tribunal's mandate and appointment of a new arbitrator. The court held that the amended Section 12(5) of the Arbitration and Conciliation Act, 1996, does not apply retrospectively to proceedings initiated before 23.10.2015. The petitioner was directed to continue participating in the ongoing arbitration before the existing Tribunal. The court did not address the jurisdictional issue explicitly and made no ruling on costs.

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Issues Involved:
1. Termination of the mandate of the originally constituted Arbitral Tribunal.
2. Appointment of a new Arbitrator.
3. Applicability of Section 12(5) of the Arbitration and Conciliation Act, 1996.
4. Jurisdiction of the High Court to entertain the application under Section 14 of the Act.

Issue-wise Detailed Analysis:

1. Termination of the mandate of the originally constituted Arbitral Tribunal:
The petitioner sought the termination of the mandate of the originally constituted Arbitral Tribunal, arguing that the members of the Stationery Purchase Committee, being officers of the respondent, were ineligible under Section 12(5) of the Arbitration and Conciliation Act, 1996. The petitioner relied on the Supreme Court's judgment in TRF Ltd. vs. Energo Engineering Projects Limited, which held that an ineligible person cannot act as an arbitrator or appoint another arbitrator.

2. Appointment of a new Arbitrator:
The petitioner argued for the appointment of an independent and impartial arbitrator under Section 11 of the Act, contending that the erstwhile members of the Stationery Purchase Committee had ceased to hold their respective positions, necessitating the constitution of a new Arbitral Tribunal.

3. Applicability of Section 12(5) of the Arbitration and Conciliation Act, 1996:
The respondent contended that Section 12(5) of the Act, inserted w.e.f. 23.10.2015, does not apply to arbitral proceedings commenced before this date. The Arbitral Tribunal in question was constituted pursuant to a court order dated 3.5.2000, well before the amendment. The respondent cited several Supreme Court judgments, including Aravali Power Co. Pvt. Ltd. vs. Era Infra Engineering and Union of India vs. Pradeep Vinod Construction Co., to support their argument that the amendment does not have retrospective effect.

4. Jurisdiction of the High Court to entertain the application under Section 14 of the Act:
The respondent argued that the High Court does not have original civil jurisdiction to entertain the application under Section 14 of the Act. According to Section 2(e) of the Act, only a Civil Court of original jurisdiction, which includes a High Court exercising its ordinary original civil jurisdiction, can decide on the termination of the mandate.

Judgment:
The court dismissed the petitioner's application, holding that the amended Section 12(5) does not apply retrospectively to arbitral proceedings commenced before 23.10.2015. The court cited Supreme Court judgments, including Aravali Power Co. Pvt. Ltd. vs. Era Infra Engineering and Union of India vs. Parmar Construction Company, to substantiate that the amendment does not affect ongoing proceedings unless parties agree otherwise. The court also noted that the petitioner had participated in the arbitration proceedings without raising objections initially and had not provided evidence of bias or partiality by the Arbitral Tribunal members.

The court concluded that the petitioner could not seek termination of the mandate based on the amended Section 12(5) and directed the petitioner to participate in the proceedings before the Arbitral Tribunal constituted by the respondent. The court did not address the jurisdiction issue explicitly, as the application was dismissed on other grounds.

Conclusion:
The application for termination of the mandate and appointment of a new arbitrator was dismissed. The petitioner was directed to participate in the ongoing arbitration proceedings before the Stationery Purchase Committee. There was no order as to costs.

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