Employee Named Arbitrator Pre-2015 Ineligible If Arbitration Had Not Yet Commenced: Tripura High Court

On 10 August, the Tripura High Court held that an employee or officer named as an arbitrator in an agreement executed before 23 October 2015 becomes ineligible to act as arbitrator if arbitration had not commenced before the 2015 amendment to the Arbitration and Conciliation Act, 1996.

Chief Justice M.S. Ramachandra Rao allowed Kashinath Bhattacharjee's arbitration petition in a dispute under a Bharat Sanchar Nigam Limited (BSNL) tender agreement and rejected BSNL's attempt to appoint its General Manager as the sole arbitrator, instead appointing retired Tripura Judicial Service officer Swapan Bhattacharjee as arbitrator. The Bench observed:

“A plain reading of this provision of law indicates that even in respect of an agreement entered into before 23.10.2015 (which provided that an employee or officer or one of the parties will be the Arbitrator), if no arbitrator had been appointed prior to 23.10.2015 in relation to a dispute between the parties to the arbitration agreement, then notwithstanding such prior agreement to the contrary, such officer or employee or one of the parties (who would fall under the categories specified in the Seventh Schedule), would be ineligible to be appointed as an Arbitrator after 23.10.2015.”

The dispute arose from an agreement connected with a bid document dated 26 October 2012, which contained an arbitration clause under Clauses 17.1 to 17.3.9. Kashinath Bhattacharjee filed a money suit before the Civil Judge, Senior Division, West Tripura, Agartala. BSNL relied on the arbitration clause and contended that the civil suit was not maintainable.

On 12 December 2025, the Civil Court accepted BSNL's objection, rejected the plaint and referred the parties to arbitration under Section 8(1) of the Arbitration and Conciliation Act, 1996, which requires a judicial authority to refer parties to arbitration where a valid arbitration agreement covers the dispute. Following the order, Bhattacharjee issued a notice to BSNL on 22 December 2025 seeking appointment of an independent and impartial arbitrator.

He contended that although the 2012 contract contemplated arbitration by BSNL's General Manager, the amendments that came into force on 23 October 2015 had rendered the General Manager and other BSNL officers ineligible to act as arbitrators under Section 12(5) of the Act, which disqualifies persons falling within the categories specified in the Seventh Schedule. BSNL nevertheless informed him that the General Manager, Tripura Business Area, would act as the sole arbitrator.

Bhattacharjee objected to the appointment on 19 January 2026, but BSNL rejected his objection on 2 February 2026, stating that he had already agreed to the appointment mechanism under the contract. He then approached the High Court under Section 11(6) of the Act seeking appointment of an arbitrator. He relied on Section 12(5) and contended that BSNL's General Manager was statutorily ineligible to act as arbitrator.

BSNL argued that its General Manager remained eligible because the agreement was executed on 26 October 2012, before Section 12(5), as introduced by the 2015 amendment, came into force on 23 October 2015. It further contended that the amended provision could not operate retrospectively.

Rejecting BSNL's contention, the Court held that Section 12(5) applies notwithstanding any prior agreement to the contrary where the arbitration had not commenced before 23 October 2015 and the named arbitrator falls within the disqualifying categories under the Seventh Schedule. It further noted that the disqualification under Section 12(5) can be waived only through an express agreement in writing made after the dispute has arisen. It found that no such waiver existed in the present case.

The Bench also distinguished the Supreme Court's decision in Union of India v. Parmar Construction Company. It observed that arbitration in that case had commenced before 23 October 2015 because the request for arbitration had already been sent and received, but concluded that “such is not the case in the instant case.”

Accordingly, the High Court allowed the petition and appointed Swapan Bhattacharjee, a retired Grade-I officer of the Tripura Judicial Service, as arbitrator, subject to his consent and statutory declaration.

Appearances for petitioner (Kashinath Bhattacharjee): Senior Advocate Somik Deb and Advocate Haradhan Sarkar.

Appearances for respondent (BSNL): Advocates Ratan Datta, Debalina Debroy, Samadrita Debnath.