Section 12(5) of The Arbitration Act II

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, 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.

In BCCI, (2018) 6 SCC 287 this Court held that the provisions of Amendment Act, 2015 cannot have retrospective operation in the Arbitral Proceedings already commenced unless the parties otherwise agree. In the present case, there is nothing to suggest that the parties have agreed that the provisions of The New Act shall apply in relation to the Arbitral Proceedings.”

Hon’ble Justice R. Banumathi, Rajasthan Small Industries Corporation Limited v.  M/s Ganesh Contrainers Movers Syndicate, [Civil Appeal No. 1039 of 2019].