The main legal point established is that the Office Memorandum did not mandate reconstitution of arbitral tribunals for arbitrations initiated prior to the Amendment Act, and that no judicial authority could intervene in arbitral proceedings except as provided under the Arbitration and Conciliation Act.

VIBHU BAKHRU, J.

1. The petitioner has filed the present petition under Article 226 of the Constitution of India, inter alia, praying that directions be issued to respondent to implement the Office Memorandum dated 05.09.2016 issued by NITI Aayog (hereafter ‘the OM’) for ensuring that the arbitration between the parties is conducted in terms of the provisions of the Arbitration and Conciliation Act, 1996 (hereafter ‘the A&C Act’), as amended by the Arbitration and Conciliation (Amendment) Act, 2015 (hereafter ‘the Amendment Act’).

2. There are certain disputes between the parties and the petitioner had invoked the arbitration clause seeking reference of the disputes to arbitration. Since, the same was prior to the enactment of the Amendment Act, the process of constituting the Arbitral Tribunal had commenced in terms of the arbitration clause and according to the provisions of the A&C Act as existing prior to the amendments introduced by the Amendment Act. The petitioner now claims that the Arbitral Tribunal is required to be re-constituted in accordance with the Amendment Act as according to the petitioner, the same is required in terms of the OM. The respondent (hereafter ‘RVNL’) disputes the same.

3. In view of the above, the principal controversy to be addressed is whether the OM mandates reconstitution of the arbitral tribunals in respect of arbitrations that had commenced prior to the Amendment Act coming into force.

Factual Background

4. The petitioner is a joint-venture of three companies and was formed for execution of the work of construction of “3rd line between Goelkera-Posotia-Mahoharpur on Chakradharpur Division of South Eastern Railway in the State of Jharkhand” (hereafter ‘the works’). Notice Inviting Tender (NIT) for the works was issued on 21.03.2011. The petitioner’s bid for the works was accepted and a Letter of Acceptance (LoA) was issued by RVNL on 12.09.2011. Thereafter, on 02.11.2011, the parties entered into a formal contract for execution of the works.

5. The petitioner alleges that RVNL failed to fulfill its primary obligations in terms of the contract. The petitioner also disputes the reduction of variation rates as communicated by RVNL. In view of the aforesaid disputes, the petitioner invoked the dispute resolution clause by a letter dated 23.03.2015 and invited the concerned authority for a decision in respect of the disputes. The concerned authority (a Committee constituted by RVNL) rejected the claims raised by the petitioner. This led the petitioner to invoke the arbitration clause by a letter dated 14.09.2015.

6. RVNL responded to the aforesaid notice by a letter dated 28.09.2015, whereby it communicated a panel of five proposed arbitrators and called upon the petitioner to choose one person from the aforesaid panel. By a letter dated 27.10.2015, the petitioner nominated Sh Arun Kumar–one of the five persons named in the letter dated 28.09.2015–as an arbitrator.

7. By a letter dated 25.01.2016, RVNL nominated its arbitrator. In the meanwhile, the petitioner issued two letters dated 13.01.2016 and 25.01.2016 calling upon RVNL to reconsider the procedure for constitution of the Arbitral Tribunal. The petitioner claims that the same is contrary to the provisions of Section 12(5) of the A&C Act as introduced by the Amendment Act. It is relevant to note that the petitioner also stated in its letter dated 13.01.2016 that the same be treated as a notice under Section 11(5) of the A&C Act.

8. Thereafter, on 06.02.2016, the Arbitral Tribunal was constituted with the appointment of the Presiding Arbitrator.

9. On 27.04.2016, the petitioner filed its Statement of Claims as well as an application under Section 12 of the A&C Act challenging the constitution of the Arbitral Tribunal.

10. On 05.09.2016, NITI Aayog issued the OM. Thereafter, by a letter dated 08.11.2016, the Railway Board, Ministry of Railways (Railway Board) communicated its approval for implementing the OM by the Indian Railways.

11. In view