Short title, extent and commencement

Related judgements & precedents

These are some judgments that construed this section, and hold precedence value. They hold authority on how to read, interpret and use this section.

1. Glock Asia-pacific Limited vs Union of India

   Supreme Court of India 19 May 2023 Binding (Supreme Court) Reportable

   Court's Decision & Legal Precedent

   A serving government employee cannot be appointed as sole arbitrator in a contract where the government is a party, even if the contract contains a pre-dispute arbitration clause authorizing such appointment, because Section 12(5) of the Arbitration and Conciliation Act, 1996, read with Paragraph 1 of the Seventh Schedule, prohibits appointment of persons who are employees of a party to the dispute, and this prohibition applies 'notwithstanding any prior agreement to the contrary.' The statutory requirement of arbitrator independence and impartiality is mandatory and cannot be waived by prior contractual agreement, particularly when the State is the party appointing the arbitrator, as the duty to appoint an impartial and independent adjudicator is even more onerous in such circumstances.

   On this section: Specifies that arbitrator cannot be 'employee, consultant, advisor or have any other past or present business relationship with a party'; applied to find government employee ineligible

   Read the full order on eCourts India

2. North Western Railway General Manager vs Anil Trading Company Proprietor Shri Dinesh Kumar Khinchi S/o Shri Chandra Ram

   Supreme Court of India 29 Mar 2019 Binding (SC) - Supreme Court Three Judges principles on Division Bench matters Reportable

   Court's Decision & Legal Precedent

   Where arbitration request predates Amendment Act 2015 (23-10-2015), proceedings are governed by pre-amended Arbitration and Conciliation Act 1996. In such cases: (1) Execution of 'no claim' or 'no dues' certificates does not automatically bar arbitration if executed under economic duress or coercion; (2) Chief Justice/designate must first ensure agreed arbitration appointment procedure is exhausted before invoking Section 11(6); (3) Deviation from agreed procedure is permissible only when independence/impartiality of agreed arbitrator is in justified doubt or agreed Tribunal has failed to function; (4) Small/petty contractors required to execute no claim certificates as condition precedent to release of admitted payments constitute cases of presumed coercion absent clear evidence of voluntary accord and satisfaction; (5) Arbitral disputes subsist despite no claim certificates when circumstances indicate economic duress, and such disputes are arbitrable notwithstanding purported full and final discharge.

   On this section: Amendment Act 2015 deemed to have come into force on 23rd October 2015 even though gazetted on 1st January 2016

   Read the full order on eCourts India

3. Union of India Thr. Chief Engineer (construction) 1 vs B. M. Construction Company Thr. Proprietor Bal Kishan Sharma

   Supreme Court of India 29 Mar 2019 Binding (SC) - High Precedential Value Reportable

   Court's Decision & Legal Precedent

   The core ratio of the judgment comprises three holdings: (1) Amendment Act 2015 does not apply to arbitration proceedings where dispute request was received before October 23, 2015; pre-amended Arbitration and Conciliation Act 1996 alone applies per Section 21 read with Section 26. Therefore High Court cannot invoke Section 12(5) for such cases. (2) Execution of 'no claim certificate' by contractor does not bar arbitration when prima facie evidence suggests financial coercion by employer who conditions payment on certificate execution. Such certificates are not genuine accord and satisfaction but forced settlement under economic duress, following the National Insurance vs. Boghara Polyfab framework, particularly illustration 52(iii). (3) High Court under Section 11(6) must first ensure contractually agreed appointment procedure is exhausted before appointing independent arbitrator. Contractual appointment procedure takes precedence; High Court is last resort. Deviation is permissible only when appointed arbitrator's independence is in doubt or when appointed tribunal has failed to function. Mere preference for independent arbitrator does not justify skipping agreed procedure.

   On this section: Amendment Act deemed to have come into force on October 23, 2015, though gazetted on January 1, 2016.

   Read the full order on eCourts India

The holding above is the ratio decidendi as extracted from the judgment by eCourts India, reproduced unaltered — it is a rendering of the court's reasoning, not a substitute for its words. Read the order itself before relying on it.