Post-2015 Challenge Does Not Apply Amended Arbitrator Eligibility Rules To Earlier Arbitration: Delhi High Court

The Delhi High Court has recently ruled that merely filing a challenge to an arbitral award after the 2015 amendments to the arbitration law does not, by itself, make the amended rules on arbitrator eligibility applicable to an arbitration that commenced earlier.

Justice Jasmeet Singh observed that where arbitration proceedings had commenced before October 23, 2015, the validity of the arbitrator's appointment must be examined under the law applicable to those proceedings.

The subsequent amendments cannot be applied retrospectively merely because the award was delivered or challenged after they came into force.

The court was dealing with a batch of nineteen petitions, including matters involving Hanson Agro Limited and GAIL (India) Limited. Although the disputes arose from different factual circumstances, they raised common questions about the validity of arbitral tribunals, particularly where one contracting party had unilaterally appointed the arbitrator.

The petitions were placed in different categories based on when the arbitration commenced, when the award was made and when proceedings challenging the award were initiated in relation to the 2015 amendment.

At the heart of the dispute was whether provisions introduced by the 2015 amendment, which specify circumstances in which a person is legally ineligible to act as an arbitrator, could apply to an arbitration that had already commenced before October 23, 2015. The petitioners argued that the amended provisions should nevertheless apply where proceedings challenging the award were initiated after that date.

They also contended that the unilateral appointment of a sole arbitrator was inconsistent with the principle of equal treatment of parties. According to them, this could provide a ground to challenge the resulting award.

The respondents argued that the legality of the appointment had to be examined under the law prevailing when the arbitration commenced and the arbitrator was appointed. A subsequent amendment, they maintained, could not retrospectively alter the law governing the constitution of an arbitral tribunal.

The court held that the law applicable to the constitution of the arbitral tribunal could not be retrospectively changed merely because proceedings challenging the award were initiated after the amendment came into force. In other words, a later challenge could not, by itself, subject an earlier arbitration to the amended eligibility provisions.

The court ruled,

“Accordingly, the mere fact that the Arbitral Award was rendered after 23.10.2015, or that the petition under Section 34 was instituted thereafter, cannot by itself attract Section 12(5) or the Seventh Schedule to an arbitration which had already commenced before that date. To hold otherwise would amount to giving retrospective operation to a substantive amendment through the medium of a subsequent court proceeding, contrary to the express scheme of Section 26.”

The court noted that the law before the 2015 amendment already recognised principles of independence and impartiality. But the existence of those principles did not mean that the specific statutory disqualifications introduced by the amendment existed under the earlier legal framework.

Before the amendment, questions about an arbitrator's independence or impartiality were examined under the legal framework then in force. The 2015 amendment introduced specific statutory disqualifications in certain circumstances. The court held that this was a substantive change in the law and not merely a clarification of the earlier position.

The court also considered the Supreme Court's decision in Bhadra International. It held that the ruling could not be read as retrospectively making every arbitrator appointed before October 23, 2015, ineligible merely because the appointment might fall within a disqualification subsequently introduced by the amendment. The validity of such an appointment had to be assessed under the law applicable when it was made.

At the same time, the court ruled that an objection relating to unilateral appointment or an arbitrator's legal ineligibility could be raised in proceedings seeking to set aside an arbitral award.

The matters have been listed before the roster bench for further proceedings on September 14, 2026

Appearances for respondent (GAIL (India) Limited): Senior Advocate Vivek Kohli with Advocates Anish Chawla and Suhasini Singh.