The judgment establishes the eligibility of retired railway employees as arbitrators under the Arbitration and Conciliation Act, 1996, Section 12(5) and Schedule 7.

JUDGMENT :

1. Heard Shri. M.B. Yadav holding brief of Shri.Ram Awtar, learned counsel for the applicant and Shri.Vivek Kumar Rai for the respondents.Perused the record.

Pleadings are complete.

2. Shri. M.B. Yadav, learned counsel for the applicant submits that the respondents have appointed the panel of arbitrators who are the retired employees of Railways, therefore, they are not eligible to act as arbitrators under Section 12 (5) read with Schedule 7 of the Arbitration and Conciliation Act, 1996 and, therefore, this Court may appoint independent arbitrator.

3. Opposing the submissions, Shri. Vivek Kumar Rai appearing for the respondents has relied upon a recent judgment of Hon'ble Supreme Court in Central Organisation for Railway Electrification Vs.ECI-SPIC-SMO-MCML (JV) A Joint Venture Company, 2019 SCC Online SC 1635, wherein the said issue has been decided in favour of the Railways holding that "Merely because the panel of the arbitrators are the retired employees who have worked in the Railways, it does not make them ineligible to act as the arbitrators."

4. In Central Organisation for Railway Electrification (supra) Supreme Court dealt with the contentions in paragraphs 23,24,25,26 and 27 " In Re: Retired Railway Officers are not eligible to be appointed as arbitrators under Section 12 (5) read with Schedule VII of the Act and were statutorily made ineligible to be appointed as an arbitrator" which are reproduced below:

"23.Vide letter dated 27.07.2018, the respondent made a request for appointment of arbitrator/constitution of Arbitral Tribunal. In response to the same, the appellant sent a letter dated 24.09.2018 nominating the names of four serving railway officers and the respondent was asked to select any two names from the list of four railway officers and communicate to the appellant. It is seen from the record that the respondent vide their letter dated 26.09.2018 expressed their disagreement in waiving off the applicability of Section 12 (5) of the Amendment Act, 2015. Referring to its own earlier letter dated 24.09.2018 and letter of the respondent dated 26.09.2018, the appellant had sent a communication dated 25.10.2018 nominating the panel of four retired railway officers to act as arbitrators and requesting the respondent to select any two names from the list in terms of Clause 64 (3) (b) of GCC and communicate to the appellant within thirty days from the date of the letter for formation of Arbitration Tribunal. According to the appellant, the respondent failed to select any of the nominee from the panel within the stipulated time of thirty days. The respondent neither responded to the appellant's letter dated 25.10.2018 not suggested the names of two arbitrators from the panel sent by the appellant. Instead the respondent approached the High Court under Section 11 (6) of the Act for appointment of an independent sole arbitrator by filing a petition on 17.12.2018.

24. The contention of the learned counsel for the respondent is that the panel of arbitrators proposed by the appellant vide letter dated 25.10.2018 comprising of retired employees of the appellant are not eligible to be appointed as arbitrators under Section 12 (5) read with Schedule VII of the Act. Further contention of the learned counsel for the respondent is that the panel of arbitrators drawn by the appellant consist of those persons who were railway employees or Ex-railway employees and therefore, they are statutorily made ineligible to be appointed as arbitrators.

25. Contending that the appointment of retired employees as arbitrators cannot be assailed merely because an arbitrator is a retired employee of one of the parties, learned ASG has placed reliance upon Voestalpine Schienen Gmbh V. Delhi Metro Rail Corporation Limited (2017) 4 SCC 665. After referring to various judgments and also the scope of amended provision of Section 12 of the Amendment Act, 2015 and the entries in the Seventh Schedule, the Supreme Court observed that merely because