The appointment of an arbitrator must comply with Section 12(5) of the Arbitration & Conciliation Act, ensuring independence and impartiality, regardless of when the arbitration proceedings were initiated.

JUDGMENT

Anup Jairam Bhambhani J. By way of the present petition under section 14 of the Arbitration & Conciliation Act 1996 (`A&C Act', for short), the petitioner seeks termination of the mandate of the learned Sole Arbitrator appointed by the respondent vide communication dated 14.05.2020 in relation to disputes that are stated to have arisen with the respondent from Letter of Award dated 17.12.2010, which related to the setting-up of a township for the respondent's Super Thermal Power Project at Barh, Bihar; the issuance of the letter of award having culminated in the parties signing a Contract Agreement dated 01.02.2011 (`contract'). For completeness, it is necessary to mention that prior to appointing the arbitrator whose termination has been sought by way of the present petition, the respondent had also appointed an arbitrator earlier, who had terminated the proceedings for the reasons as detailed below.

2. Notice on the termination petition was issued on 23.10.2020; whereupon the respondent filed a reply dated 11.12.2020; which was followed by the petitioner's rejoinder dated 26.03.2021.

3. In support of the plea for termination, Mr. Amit Pawan, learned counsel for the petitioner submits as follows:

3.1. That the petitioner first invoked arbitration vide notice dated 27.01.2014; whereupon the respondent appointed the Joint General Manager, NTPC Ltd. Barh as the sole arbitrator (`1st Arbitrator'). However, the 1st Arbitrator terminated the proceedings under section 25(a) of the A&C Act on 22.06.2016 for want of the petitioner filing a statement of claim before him. Thereafter, on 11.02.2020, the petitioner filed an application for recall of order dated 22.06.2016; whereupon the Chairman & Managing Director (`CMD'), NTPC appointed Mr. Asit Kumar Mukherjee as the arbitrator (`2nd Arbitrator') to decide the recall application;

3.2. On 16.09.2020 the petitioner wrote a letter to the respondent's CMD objecting to the appointment of the 2nd Arbitrator, since the said person was the Regional Executive Director of the respondent, apart from being the Project Head of the project in relation to which disputes had arisen. The petitioner's contention was that the disclosures made by the 2nd Arbitrator so appointed under section 12 of the A&C Act, showed that his appointment was not in conformity with the extant position of law post the coming into force of the Arbitration & Conciliation (Amendment) Act, 2015 (Act No. 3 of 2016) (`Amendment Act-2015'); and hence the petitioner sought appointment of another arbitrator;

3.3. It is stated on behalf of the petitioner however, that the respondent forwarded the petitioner's objection to the 2nd Arbitrator himself; who, on 21.09.2020, held that the Amendment Act-2015 would not apply to the proceedings, which had been invoked prior to the coming into force of the amendment; and that therefore, it was within his remit to deal with the disputes. Thereafter, on 05.10.2020, the petitioner requested the 2nd Arbitrator to keep the arbitral proceedings pending, since the petitioner was initiating legal proceedings, which request was denied by the 2nd Arbitrator on the same day;

3.4. On 15.10.2020 the petitioner filed the present petition, seeking termination of the 2nd Arbitrator's mandate; but soon thereafter, on 21.10.2020, during the pendency of the termination petition, the 2nd Arbitrator passed an order rejecting the petitioner's application for recall of order dated 22.06.2016;

3.5. It is the petitioner's contention that after the first round of arbitral proceedings was terminated by the 1st Arbitrator, on the ground that the petitioner had failed to file its statement of claim, when the CMD, NTPC proceeded to appoint the 2nd Arbitrator, section 12(5) had already been inserted in the A&C Act, which amendment was therefore already in force; and since the person appointed was admittedly the Regional Executive Director of the respondent and the Project Head of the project in relation to