AIR 2019 SC 2434 ::2019 (4) ADR 531 ::AIROnline 2019 SC 219 ::AIR 2019 SC (Civil) 1944 ::(2019) 4 All WC 3549 ::(2019) 2 CurCC 257 ::(2019) 5 Mad LJ 212

Supreme Court Of India

(From : Delhi)

Hon'ble Judge(s): R. F. Nariman, Vineet Saran , JJ

Arbitration and Conciliation Act (26 of 1996) , S.14, S.15, S.5, S.12(5)— (Inserted by Amendment Act (3 of 2016)) - Appointment of Arbitrator - Chairman and Managing Director of corporation being ineligible to act as arbitrator cannot appoint another arbitrator - Appointment made by him is void ab initio -Appointment set aside. It is clear that the Managing Director of the appellant corporation could not have acted as an arbitrator himself, being rendered ineligible to act as arbitrator under Item 5 of the Seventh Schedule. Whether such ineligible person could himself appoint another arbitrator was only made clear by Supreme Court's judgment in TRF Ltd. AIR 2017 SC 3889 on 03.07.2017, Supreme Court holding that an appointment made by an ineligible person is itself void ab initio. Thus, it was only on 03.07.2017, that it became clear beyond doubt that the appointment of another arbitrator be void ab initio. Since such appointment goes to 'eligibility',i.e., to the root of the matter, it is obvious that appointment of another arbitrator would be void. Disputes arose only after the introduction of Section 12(5) into the statute book, and another arbitrator was appointed long after 23.10.2015. The judgment in (AIR 2017 SC 3889) nowhere states that it will apply only prospectively, i.e., the appointments that have been made of persons be valid if made before the ....