Sanjay Kishan Kaul, J.

An important question of law arises for consideration as to whether an ex-employee of any party seeking resolution of disputes by arbitration is disqualified from acting as an arbitrator in view of the amendments to the provisions of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as "the said Act"), by Act No.3 of 2016.

2.1. The petitioner, a company incorporated and registered under the Companies Act, 1956, was awarded with a contract by the Bharat Heavy Electricals Limited/first respondent for the work of fabrication and erection of structural steel in power house, mill bunker bay, auxiliary buildings and pipe rack, etc. for 1 unit of 2 x 600 MVVTPP at North Chennai (for TNEB), Athippattu, Chennai, Tamil Nadu, under the Letter of Intent dated 29.6.2009 culminating in the Contract Agreement dated 23.9.2009. The work was for a value of Rs.30,27,45,245/- and was to be completed in 25 months from the date of commencement of the work.

2.2. It is the case of the petitioner that they carried out the work diligently, but the work was extended by an additional 34 months for reasons not attributable to the petitioner and consequently, extensions of time had been granted by the first respondent.

2.3. The petitioner raised the final bill on 30.6.2014, which is stated to have been certified by the first respondent, but not released for payment. The first respondent also continued to hold the bank guarantee issued by the petitioner. In the course of exchange of letters and discussion inter se parties, the first respondent raised issues about alleged discrepancies noticed in the final bill. No settlement was, however, arrived at.

2.4. Finally, on 19.5.2016, the petitioner called upon the first respondent to resolve the disputes in terms of the dispute redressal mechanism contained in the agreement and called upon the first respondent to appoint an arbitrator in terms thereof. Thereafter also some further meetings for settlement took place, but to no avail.

2.5. The dispute redressal mechanism is contained in Clause 44.0 of the General Conditions of Contract, which form a part and parcel of the contract agreement. In terms of the arbitration clause, the arbitrator has to be appointed by the General Manager of the first respondent with the stipulation that there would be no objection to such appointment on the grounds that the Arbitrator is a government servant; or employee of the first respondent; or that he has dealt with the matter the contract relates in the course of his duties, etc.

2.6. The amendment to the said Act came into force from 23.10.2015. The request for arbitration was made by the petitioner on 19.5.2016 and, thus, it is undisputed that the amended provisions would govern the arbitration inter se the parties. This is in the context of the first respondent vide its letter dated 24.6.2016 appointing Sri B.P. Bheemanna, an ex-employee of the first respondent, as an arbitrator.

2.7. The petitioner has, thus, filed the present petition under Section 11(6) of the said Act seeking appointment of an arbitrator by this Court on the ground that Sri B.P. Bheemanna was ineligible to be appointed as an arbitrator, being an ex-employee.

2.8. Since the appointment was alleged to be not in accordance with the provisions of the said Act, it has been pleaded that the first respondent has forfeited the right to appoint the arbitrator and that is why the jurisdiction of this Court was being invoked.

3. On issuance of notice in the petition, interim orders were granted staying the proceedings before the second respondent/arbitrator.

4. The first respondent has contested the petition disputing that the second respondent was disqualified from acting as an arbitrator in view of being an ex-employee under the amended provisions.

5. The controversy is in a narrow compass and in order to appreciate the same, it is apposite to reproduce Section 12 of the said Act as under:

"Section 12. Grounds for challenge.-

(1) W