IN THE COURT OF MR.

SATYABRATA PANDA, DJ-04,

PATIALA HOUSE COURTS, NEW DELHI

ARBTN No.7418/17
Date of Institution: 06.11.2017
Date of Arguments: 23.10.2024
Date of Judgment: 23.10.2024

Sh. Pankaj
Prop. M/s Pankaj Associates,
At 61-B, DDA Flats,
Ashok Vihar, Phase-III,
Delhi-110052 ...Petitioner

Vs.

Delhi Metro Rail Corporation Ltd.,

Metro Bhawan,
Fire Brigade Lene,
Barakhamba Road, New Delhi-110001.

...Respondent
23.10.2024

Present: Sh. Sunil Dutt Dixit, Ld. Counsel for petitioner

along with petitioner.
Sh. S.S. Sastry, Sh. Brijesh Tiwari and Sh. Umesh
Kumar, Ld. Counsel for respondent.

JUDGMENT (ORAL)

1. The petitioner has filed the present petition u/s. 34 of the

Arbitration and Conciliation Act, 1996 (‘A&C Act’)
challenging the arbitral award dated 21.07.2017 passed by
the sole arbitrator Sh. Ashu Sharma.

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2. The brief facts of the case leading to the passing of the
arbitral award, as per the case of the petitioner, are as
follows:

2.1. The respondent had on 04.03.2013 floated tender for

parking sites at Dwarka Sector-21 and Dwarka
Sector-11 metro stations.

2.2. Letter of acceptance (LOA) dated 28.06.2013 was

issued by the respondent declaring the petitioner as
the successful bidder. As per LOA, the period of
tender was three years and license fee of
Rs.5,00,000/- was payable monthly by the petitioner
to the respondent. The LOA was issued for a super
area of 7,548 sq. mtrs. i.e. 6,965 sq. mtrs. at Dwarka
Sector-21 metro station parking and 583 sq. mtrs. at
Dwarka Sector-11 metro station parking.

2.3. On 16.07.2013, the petitioner handed over part

possession of the parking site. Only 3,652 sq. mtrs.
of area out of the total area promised of 6,965 sq.
mtrs. was handed over to the petitioner.

2.4. Various circumstances came to light after the

respondent handed over the parking sites to the
petitioner due to which the petitioner was unable to
pay the monthly license fee without incurring losses.
The previous contractor was still collecting the
parking fee beyond 15.07.2023 from the commuters
at the parking sites handed over to the petitioner.

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 Moreover, the area of parking sites handed over was
also rendered unusable since there were trees,
footpath and fire roads on both sides of the parking
which were earmarked for quick ingress and egress
of fire brigade vehicles. Various letters were written
by the petitioner to the respondent in this regard but
to no avail. Hence, disputes arose between the
parties.

2.5. The petitioner issued letter dated 03.06.2014

invoking the arbitration clause and seeking
resolution of the disputes.

2.6. On 31.07.2024, the respondent issued termination

notice to the petitioner on the ground of the non-
payment of the monthly license fee.

2.7. Subsequently, the petitioner handed over the charge

of the parking site back to the respondent.

2.8. Vide letter dated 24.03.2015, the respondent

appointed Sh. Ashu Sharma, who was the Senior
Additional General Manager/Financial with the
respondent, as Sole Arbitrator.

2.9. The petitioner submitted his statement of claim

before the sole arbitrator praying for award to the
tune of Rs. 71,53,025/-.

2.10. On 23.10.2015, the Arbitration and Conciliation Act

(Amendment) Act 2015 became effective and

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 Section 12(5) along with Schedule VII were inserted
to the Arbitration and Conciliation Act, 1996.

2.11. On 31.10.2015, the respondent filed its reply as well

as counter-claim of Rs. 40,15,083/-.

2.12. Ultimately, the sole arbitrator passed the impugned

award dated 21.07.2017 dismissing the claims of the
petitioner and awarding claims to the
respondent/counter claimant to the tune of Rs.
40,15,831/- along with interest @ 24% per annum.

3. Being aggrieved by the aforesaid award dated 21.07.2017,

the petitioner has now preferred the present challenge u/s.
34 of the A&C Act.

4. Although the petitioner has raised various grounds in the

petition u/s. 34 of the A&C Act, however, Ld. Counsel for
the petitioner has confined his arguments for setting aside
of the impugned award to the sole ground that the
arbitrator, who was a serving employee of the respondent,
was appointed unilaterally by the respondent and that as
such, the award was null and void and unsustainable in
law. Ld. Counsel has not pressed any other grounds.

5. Ld. Counsel for the petitioner has submitted that in the

present case, admittedly, the sole arbitrator Sh. Ashu
Sharma, who was a serving employee of the respondent
being the Senior General Manager/Financial of the
respondent, was unilaterally appointed as arbitrator by the

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 respondent. It is submitted that this unilateral appointment
of the arbitrator was directly hit by Section 12(5) read with
Schedule VII of the A&C Act as inserted by the
Arbitration and Conciliation (Amendment) Act, 2015
(‘2015 Amendment Act’) and that as such, the award was
liable to be set aside.

6. Ld. Counsel for the petitioner has heavily relied upon the
decision dated 25.08.2023 of the Hon’ble High Court of
Delhi in OM 360 Degrees Advertisement and
Entertainment Private Limited Vs. Delhi Metro Rail
Corporation Limited MANU/DE/5914/2023. It is
submitted that in the said decision, in similar facts and
circumstances, the Hon’ble High Court of Delhi had set
aside an award on the basis that the arbitrator appointed
unilaterally by the party was de jure ineligible to act and
lacked inherent jurisdiction. It is submitted that in OM 360
Degrees (supra), the Hon’ble High Court relied upon the
decision of the Hon’ble Supreme Court in Ellora Papers
Mills Limited Vs. State of Madhya Pradesh
MANU/SC/8/2022 and it was held that Section 12 of the
A&C Act as amended by the 2015 Amendment Act would
be applicable to arbitral proceedings initiated prior to
coming into force of the 2015 Amendment Act as well.

7. Ld. Counsel for the petitioner has also relied upon the
decision of the Hon’ble High Court of Delhi in Vineet
Dujodwala Vs. Phoneix ARC Pvt. Ltd 2024 SCC OnLine
Del 5940 and has submitted that even in this case, it was
held that even in cases of arbitral proceedings commenced
ARBTN No.7418/2017 Pankaj Vs. Delhi Metro Rail Corporation Ltd. Page 5 of 23
 prior to the commencement of the 2015 Amendment Act,
the unilateral appointment of arbitrator would vitiate the
award.

8. Ld. counsel for the petitioner has further submitted that, in

any case, a reading of the arbitral clause between the
parties in the present case would show that the parties had
agreed that the arbitration proceedings would be governed
by the A&C Act as amended from time to time and that as
such, the parties had agreed that all future amendments
made to the A&C Act would apply to the arbitration
proceedings between the parties. It is submitted that even
as such, since the parties had themselves agreed that the
amendments to the A&C Act would apply to the
arbitration proceedings, then the amendments made by the
2015 Amendment Act were applicable in the present case
including the Section 12(5) and Schedule VII which were
inserted to the A&C Act.

9. Ld. Counsel for the petitioner further submits that the

award in the present case was also a case of contravention
of the fundamental policy of the Indian law as well as in
conflict with the most basic notions of morality and justice
in as much as there was a violation of the principles of
natural justice. It is submitted that the principles of natural
justice dictated that a party ought not to be a judge in its
own case. It is submitted that in the present case, the
arbitrator was a serving employee of the respondent
corporation and was unilaterally appointed by the
respondent, and as such, there was violation of this basic
ARBTN No.7418/2017 Pankaj Vs. Delhi Metro Rail Corporation Ltd. Page 6 of 23
 principle of natural justice, and even as such, the award
was in conflict with the public policy of India u/s. 34(2)(b)
(ii) of the A&C Act.

10. On this basis, it is submitted that the arbitral award is

unsustainable and is liable to be set aside.

11. On the other hand, Ld. Counsel for the respondent has
submitted that Section 12(5) and Schedule VII of the A&C
Act which were introduced vide the 2015 Amendment Act
with effect from 23.10.2015 would not apply to the present
case, since the arbitration proceedings in the present case
had already commenced and were pending when the 2015
Amendment Act came into effect on 23.10.2015.

12. Ld. Counsel for the respondent has heavily relied upon the
decision of the Hon’ble High Court of Calcutta in West
Bengal Housing Board Vs. Abhishek Construction 2023
SCC Online Cal 827. It is submitted that in this decision,
the Hon’ble High Court of Calcutta has directly dealt with
the issue as to whether the provisions of the 2015
Amendment Act in relation to unilateral appointment of
arbitrator would apply to arbitral proceedings initiated
before 23.10.2015 and has, after referring exhaustively to
the law, held that the 2015 Amendment Act would not
apply to arbitral proceedings which had commenced prior
to the coming into force of the 2015 Amendment Act, and
that the objection of unilateral appointment of the
arbitrator could not be raised in such cases. It is further
submitted that the Hon’ble High Court of Calcutta has in

ARBTN No.7418/2017 Pankaj Vs. Delhi Metro Rail Corporation Ltd. Page 7 of 23
 West Bengal Housing Board (supra) also noticed the
decision of the Hon’ble Supreme Court in Ellora Paper
Mills (supra) and has distinguished the said decision on
the basis that in the facts of that case, the arbitral
proceedings had not “technically commenced” prior to the
date when the 2015 Amendment Act came into effect.

13. Ld. Counsel for the respondent has further submitted that
even Section 26 of the 2015 Amendment Act was very
clear to the effect that the 2015 Amendment Act would not
apply to arbitral proceedings which had commenced prior
to the commencement of the 2015 Amendment Act i.e. on
23.10.2015, unless the parties otherwise agreed.

14. Ld. counsel for the respondent has also relied upon the
decision dated 06.01.2017 of the Hon’ble High Court of
Delhi in FAO (OS) No.221/2016 titled as Ardee
Infrastructure Private Limited Vs. Anuradha Bhatia, and
has submitted that even in the said decision, it was
categorically held, taking note of Section 26 of the 2015
Amendment Act, that the 2015 Amendment Act did not
apply to arbitration proceedings which had already
commenced prior to the commencement of the 2015
Amendment Act unless the parties agreed otherwise.

15. Ld. Counsel for the respondent has also relied upon the
decision of the Hon’ble Supreme Court in BCCI Vs. Kochi
Cricket Private Limited. It is submitted that in this case,
the controversy involved was the question of construction
of Section 26 of the 2015 Amendment Act. It is submitted

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 that in this decision, the Hon’ble Supreme Court has
categorically held that the provisions of the 2015
Amendment Act would not apply to arbitral proceedings
commenced prior to the commencement of the 2015
Amendment Act.

16. Ld. counsel for the respondent has also referred to the
judgment dated 10.11.2021 of the Hon’ble Supreme Court
in Civil Appeal No.6112/2021 entitled as Ratnam Sudesh
Iyer Vs. Jackie Kakubhai Shroff and has submitted that
even in this decision, the Hon’ble Supreme Court has held
that the 2015 Amendment Act would apply only to arbitral
proceedings commenced on or after the commencement of
the 2015 Amendment Act and not to arbitral proceedings
commenced prior thereto unless the parties otherwise
agreed.

17. Ld. counsel for the respondent has submitted that as such,
the clear position was that the objection of unilateral
appointment of the arbitrator u/s. 12(5) of the A&C Act as
amended by the 2015 Amendment Act could not be raised
in respect of arbitration proceedings which had
commenced prior to the 2015 Amendment Act coming into
effect.

18. Ld. counsel for the respondent has further submitted that in
the present case, the parties had also not agreed for
application of the 2015 Amendment Act. It is submitted
that as per the arbitration agreement between the parties,
the arbitration proceedings were agreed to be governed by

ARBTN No.7418/2017 Pankaj Vs. Delhi Metro Rail Corporation Ltd. Page 9 of 23
 the A&C Act as amended from time to time up to the date
of the notice invoking the arbitration clause. It is submitted
that once there was a notice invoking arbitration, the
arbitration proceedings stood commenced in terms of
Section 21 of the A&C Act and any amendments made to
the A&C Act subsequent to the commencement of the
arbitral proceedings would not apply to the arbitral
proceedings in the present case. It is submitted that in the
present case, the petitioner had invoked the arbitration on
03.06.2014 and it is only those amendments to the A&C
Act which were made on or before 03.06.2014 which
could apply and that no amendments made subsequent to
03.06.2014, including the 2015 Amendment Act, would
apply to the present case.

19. On this basis, it is submitted that the petition deserves to

be dismissed.

20. I have considered the submissions of the ld. counsels for

the parties and I have perused the record.

21. Various important amendments came to be made in the

A&C Act by virtue of the 2015 Amendment Act. There is
no dispute that the 2015 Amendment Act was with effect
from 23.10.2015. By way of the 2015 Amendment Act,
Section 12(5) was inserted in the A&C Act, and which
provides as follows:

“(5) Notwithstanding any prior agreement to the

contrary, any person whose relationship, with the

ARBTN No.7418/2017 Pankaj Vs. Delhi Metro Rail Corporation Ltd. Page 10 of 23
 parties or counsel or the subject-matter of the
dispute, falls under any of the categories specified in
the Seventh Schedule shall be ineligible to be
appointed as an arbitrator:

Provided that parties may, subsequent to disputes

having arisen between them, waive the applicability
of this sub-section by an express agreement in
writing.”

22. Along with insertion of Section 12(5) to the A&C Act,

simultaneously Schedule VII was also inserted to the A&C
Act which specifies the categories of relationships between
the arbitrator and a party which would render the arbitrator
as ineligible to be appointed as arbitrator.

23. There is no dispute that in case Section 12(5) read with

Schedule VII of the A&C Act is to apply in the present
case, then the arbitral award would certainly be
unsustainable given the nature of relationship between the
arbitrator and the respondent. However, the dispute is
whether Section 12(5) read with Schedule VII would apply
to the present case.

24. Section 26 of the 2015 Amendment Act holds the key to

this controversy. Section 26 provides as under:

“26. Nothing contained in this Act shall apply to the

arbitral proceedings commenced, in accordance with
the provisions of Section 21 of the principal Act,

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 before the commencement of this Act unless the
parties otherwise agree but this Act shall apply in
relation to arbitral proceedings commenced on or
after the date of commencement of this Act.”

(Emphasis supplied by me)

25. A perusal of Section 26 of the 2015 Amendment Act

clearly shows that even in cases of arbitration proceedings
commenced prior to the commencement of 2015
Amendment Act, the 2015 Amendment Act would apply in
case the parties agreed to the same.

26. Now, coming to the arbitration agreement between the

parties in the present case, which is contained in Clause 45
of the Terms and Conditions. This clause is extracted
hereunder:

“45. Conciliation and Arbitration

In the event of any dispute, difference of opinion or

dispute or claim arising out of/or relating to this
agreement or breach, termination or the invalidity
thereof, shall firstly be attempted to be settled by
conciliation. All disputes relating to this agreement
or on any issue whether arising during the progress
of the services or after the completion or
abandonment thereof or any matter directly or
indirectly connected with this service agreement
shall in the first place be referred to a sole
conciliator appointed/nominated by GM/Civil on
receipt of such requests from either parities.
The conciliator shall make the settlement
agreement after the parties reach agreement and
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 shall given an authenticated copy thereof to each of
the parties.
The settlement agreement shall be final and binding
on the parties.
The settlement agreement shall have the same
status and effect of an arbitration award.
The views expressed or the suggestions made or the
admissions made by either party in the course of
conciliation proceedings shall not be introduced as
evidence in any arbitration proceedings.
Any dispute that cannot be settled through
conciliation procedure shall be referred to
arbitration in accordance with the procedure given
in Para given below.
The parties agree to comply with the awards
resulting from arbitration and waive their rights to
any form of appeal insofar as such waiver can
validly be made.
Arbitration Procedure
If the efforts to resolve all or any of the disputes
through conciliation fail, then such disputes shall be
referred within 30 days to a sole arbitrator who
would be nominated by DMRC Ltd. The venue of
such arbitration shall be at Delhi/New Delhi. The
award of the sole arbitrator shall be binding on all
parties. The cost of Arbitration shall be bome by
respective parties. There will be no objection if
conciliator/or sole arbitrator nominated/appointed is
an employee of DMRC.
Rules governing Arbitration Proceedings
The Arbitration Proceedings shall be governed by
Indian Arbitration and Conciliation Act 1996 as

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 amended from time to time including provisions in
force at the time the reference is made."”

(Emphasis supplied by me)

27. The matter now revolves around the construction of the

aforesaid arbitration agreement between the parties.

28. As per the contention of the petitioner, by way of this

arbitration clause, the parties had agreed that the
arbitration proceedings would be governed by the
provisions of the A&C Act as amended from time to time
till the passing of the award which would also include the
2015 Amendment Act.

29. On the other hand, it is the case of the respondent that it is

only the provisions of the A&C Act as amended up to the
date of the notice invoking arbitration i.e. 03.06.2014
which would apply and any amendments made to the A&C
Act subsequent thereto would not apply.

30. It would hence be relevant to carefully consider the

wordings and language used in the arbitration clause. The
arbitration clause provides that the “arbitration
proceedings” shall be governed by the “Indian Arbitration
and Conciliation Act, 1996” “as amended from time to
time” “including” “provisions in force at the time the
reference is made”. Clearly, the parties had agreed that the
amendments made “from time to time” to the A&C Act
would apply. The words “as amended from time to time”
are of wide import and would mean both past as well as

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 future amendments. The amendments to the A&C in the
context of the present arbitration agreement could be
divided into 3 classes. The first class of amendments
would be the amendments made between the date of
commencement of the A&C Act till the date of the
execution of the arbitration agreement. The second class of
amendments would be the amendments made between the
date of execution of the arbitration agreement and the date
of notice invoking arbitration i.e. the date of reference.
The third class of amendments would be the amendments
made between the date of notice invoking arbitration i.e.
date of reference and the date of conclusion of the arbitral
proceedings i.e. passing of the arbitral award. Hence, there
are three periods over which the amendments to the A&C
Act would have been made and which would have been in
the contemplation of the parties at the time of executing
the arbitration agreement. Importantly, the parties have
agreed that the arbitration proceedings would be governed
by the A&C Act “as amended from time to time”
“including” the provisions in force at the time when
reference is made. The use of the word “including” is most
crucial. The use of the word “including” clearly shows
that the parties had agreed that all amendments to the A&C
Act till the time of passing of the award would govern the
arbitration proceedings, and this would also “include” the
provisions in force at the time of the reference of the
dispute to arbitration. The inclusive clause to include the
provisions in force at the time of reference of the dispute
to arbitration would not restrict the wide words “as

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 amended from time to time” which would also encompass
the amendments made post reference of the dispute to
arbitration. In case the parties had agreed otherwise that it
is only the amendments made up to the date of reference to
arbitration which would apply as contended on behalf of
the respondent, then the parties would not have used the
words “as amended from time to time” “including”
“provisions in force at the time the reference is made” but
would have provided that the arbitration proceedings
would be governed by the A&C Act as amended from time
to time “up to” or “until” the date when reference was
made. The use of the word “including” instead of the
words “up to” or “until” clearly shows that the application
of amendments made to the A&C Act during the period
from the commencement of the arbitration proceedings till
passing of the award was not excluded. In my view, this
would be the most reasonable construction of the
arbitration agreement between the parties.

31. Hence, the parties had clearly agreed that the arbitration
proceedings would be governed by the A&C Act and that
all future amendments to the A&C Act would apply.
Hence, clearly, the 2015 Amendment Act would apply in
the present case by virtue of the agreement of the parties.
As already mentioned, Section 26 of the 2015 Amendment
Act clearly provides that the parties could agree for
application of the 2015 Amendment Act even to
proceedings commenced prior to the commencement of
the 2015 Amendment Act. Hence, I have no manner of

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 doubt that Section 12(5) read with Schedule VII of the
A&C Act as introduced by the 2015 Amendment Act
would apply to the present case.

32. Hence, the arbitrator in the present case was clearly

ineligible to act as arbitrator and the award is
unsustainable and is liable to be set aside.

33. Now, even assuming that the parties had only agreed that
amendments to the A&C Act only up to the date of notice
of invocation were to apply as contended by the
respondent, even in such case, in light of the clear decision
of the Hon’ble High Court of Delhi in OM 360 Degrees
(supra) the petitioner would succeed. Incidentally, the
respondent herein was also the respondent in the said case.
In OM 360 Degrees (supra), the Hon’ble High Court of
Delhi had occasion to deal with a similar situation in
which the arbitration proceedings had commenced prior to
the commencement of the 2015 Amendment Act and the
controversy was in respect of an award passed by an
arbitrator who was unilaterally appointed by the
respondent and who was a serving employee of the
respondent. In these circumstances, the Hon’ble High
Court held as follows:

“6. Contractor has raised a preliminary submission

that the arbitral proceedings were vitiated inasmuch
as the Arbitrator on the date of his appointment was
a serving employee of the Respondent. The
impugned Award is also assailed on other grounds.

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 7. Respondent, on the other hand, though does not
dispute the aforenoted statement, submits that since
the arbitral proceedings were initiated prior to the
2015 Amendment to A&C Act coming into force,
thus it was the unamended Act which shall govern
the procedure of the arbitral proceedings. While
defending the nomination of the AT, it was submitted
that merely because the Arbitrator happens to be an
employee of the Respondent, that by itself would not
render the appointment invalid and unenforceable.

8. Indisputably, the AT was unilaterally nominated

by the Director of the Respondent in terms of Clause
29.1 of the License Agreement.

9. The issue raised here is no longer res integra.

Independence and impartiality of the arbitrator are
the hallmarks of any arbitration proceedings. Rule
against bias is one of the fundamental principles of
natural justice which apply to all judicial and quasi-
judicial proceedings. The Supreme Court in Ellora
Paper Mills Limited v. State of Madhya Pradesh,
reported as (2022) 3 SCC 1, while emphasizing on
the "neutrality of arbitrator", noted that Sub-section
(5) of Section 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. It
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 further held that Section 12(5) of the A&C Act, as
amended by the 2015 Amendment Act, would be
equally applicable to arbitral proceedings initiated
prior to the coming into force of Amendment Act,
2015 as well.

10. There is no express waiver in writing by the

Contractor waiving its right to the applicability of
Sub-section (5) of Section 12. The present case
relates to de jure ineligibility of the sole arbitrator.
Indisputably, the learned Sole Arbitrator, while
entering reference and delivering the Award, was a
serving employee of the Respondent. The Supreme
Court in Perkins Eastman Architects DPC v. HSCC
(India) Ltd. reported as (2020) 20 SCC 760, held as
under :-

“21. But, in our view that has to be the logical

deduction from TRF Ltd. Para 50 of the
decision shows that this Court was concerned
with the issue, "whether the Managing
Director, after becoming ineligible by
operation of law, is he still eligible to
nominate an arbitrator". The ineligibility
referred to therein, was as a result of operation
of law, in that a person having an interest in
the dispute or in the outcome or decision
thereof, must not only be ineligible to act as
an arbitrator but must also not be eligible to
appoint anyone else as an arbitrator and that
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 such person cannot and should not have any
role in charting out any course to the dispute
resolution by having the power to appoint an
arbitrator. The next sentences in the
paragraph, further show that cases where both
the parties could nominate respective
arbitrators of their choice were found to be
completely a different situation. The reason is
clear that whatever advantage a party may
derive by nominating an arbitrator of its
choice would get counter-balanced by equal
power with the other party. But, in a case
where only one party has a right to appoint a
sole arbitrator, its choice will always have an
element of exclusivity in determining or
charting the course for dispute resolution.
Naturally, the person who has an interest in
the outcome or decision of the dispute must
not have the power to appoint a sole arbitrator.
That has to be taken as the essence of the
amendments brought in by the Arbitration and
Conciliation (Amendment) Act, 2015 (3 of
2016) and recognised by the decision of this
Court in TRF Ltd."

11. Recently, Supreme Court while dealing with a

similar issue in Glock Asia-Pacific Ltd. vs. Union of
India (UOI) reported as 2023 SCC OnLine SC 664
held as under:

ARBTN No.7418/2017 Pankaj Vs. Delhi Metro Rail Corporation Ltd. Page 20 of 23
 “21. In contrast, the arbitration clause in the
present case enables a serving employee of the
Union of India, a party to the contract, to
nominate a serving employee of the Union of
India as the Sole Arbitrator. Such an
authorisation is clearly distinct from the
arbitration Clause in Voestalpine Schienen
GmbH (supra) and Central Organisation of
Railway Electrifications (supra), and is in
conflict with Section 12(5) of the Act. It was
informed at the bar that the correctness of
judgement of Central Organisation of Railway
Electrifications has been challenged and
referred to a larger bench in Union of India v.
M/s. Tantia Constructions Ltd as well as JWS
Steel Ltd. v. Southwestern Railways. As we
have noticed that the decision in Central
Organisation of Railway Electrifications
(supra) is not applicable in the present case, its
reference to the larger Bench will have no
bearing on the outcome of the present case."

12. Even, if the Contractor had participated in the

arbitral proceedings and raised no objection to the
appointment of the learned Sole Arbitrator, the same
would neither amount to waiver of its right
under Section 12(5) of the A&C Act nor make the
Award valid. (Ref: Govind Singh v. Satya Group
Pvt. Ltd. and Anr. reported as 2023 SCC OnLine Del
37)
ARBTN No.7418/2017 Pankaj Vs. Delhi Metro Rail Corporation Ltd. Page 21 of 23
 13. The law on the issue having been well settled,
this Court has no hesitation to hold that the learned
Arbitrator was de jure ineligible to act and lacked
inherent jurisdiction to render the Award. The
ineligibility goes to the root of his jurisdiction. The
Award as such is held to be a nullity and is
accordingly, set aside.

14. Since the preliminary issue has been decided in

the affirmative, the other issues need not be delved
into.

15. The petition is disposed of in above terms.”

(Emphasis supplied by me)

34. A perusal of the above extract clearly shows that the

Hon’ble High Court of Delhi has in OM 360 Degrees
(supra) specifically noted the decision of the Hon’ble
Supreme Court in Ellora Paper Mills Limited (supra) and
has interpreted the said decision to observe that the said
decision holds that Section 12 of the A&C Act, as
amended by the 2015 Amendment Act, would be equally
applicable to arbitral proceedings initiated prior to the
coming into force of the 2015 Amendment Act. This Court
is bound by this interpretation. Although the Hon’ble High
Court of Calcutta has taken a different view in the decision
in West Bengal Housing Board (supra), with utmost
respect, this Court being bound by the decision of the
Hon’ble High Court of Delhi in OM 360 Degrees (supra),
the decision of Hon’ble High Court of Calcutta in West

ARBTN No.7418/2017 Pankaj Vs. Delhi Metro Rail Corporation Ltd. Page 22 of 23
 Bengal Housing Board (supra) which is relied upon by the
respondent would be of no assistance to the respondent.
Hence, the petitioner is bound to succeed in the petition.

35. Accordingly, the petition under section 34 of the A&C Act

is allowed and the impugned award dated 21.07.2017 is set
aside.

36. Parties to bear own costs.

37. File be consigned to record room after due compliances.

Digitally
signed by
Satyabrata
Satyabrata Panda
Panda Date:
2024.10.24
[Link]
+0530

(SATYABRATA PANDA)
District Judge-04
Judge Code- DL01057
PHC/New Delhi/23.10.2024

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