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14. We have no hesitation in rejecting the submission of the learned ASG that the contracts entered into by the Union of India in the name of the President of India are immune from provisions that protect against conflict of interest of a party to a contract, under Section 12(5) of the Act. Re: Conflict of the Arbitration Clause with Section 12(5) read with paragraph 1 of the Seventh Schedule of the Act.

15. The tender notice dated 02.02.2011 was issued by the Government of India, Ministry of Home Affairs for the purchase of Glock pistols. Applicant’s bid was accepted on 31.03.2011 as per the Terms and Conditions contained in the Tender No. D/21013/30/3218/2.11.2011/PW-3. The said Terms and Conditions specifically provided for Arbitration as per Clause 28 Mulamchand v. State of Madhya Pradesh (1968) 3 SCR 214; Also see, DD Basu, Constitution of India (Vol 3), 13601-13619.

Re: Reliance on the decision in Central Organisation of Railway Electrifications

20. We will now deal with the last limb of the learned ASG’s submissions, which relates to the precedent of Central Organisation of Railway Electrifications (supra). In this case, Clause 64(3)(b) provided for the constitution of an Arbitral Tribunal consisting of three members. The appointment procedure contemplated was such that the General Manager of the Appellant was required to nominate the panel of four retired railway officers, out of which the respondent-Contractor had to select two names. The General Manager was required to appoint at least one out of the selected officers as the contractor’s nominee arbitrator(s), and unilaterally appoint the remaining arbitrators as well as the presiding officer to the tribunal. The decision of Perkins (supra) was not applicable therein as the contract contemplated a three-member arbitral tribunal, while Perkins (supra) applies to cases of unilateral appointment of Sole Arbitrators. Further, the Court noted that, “absolutely, there is no bar under Section 12(5) of the Arbitration and Conciliation (Amendment) Act, 2015 for appointment of a retired employee to act as an arbitrator”13. The Court in Central Organisation of Railway Electrifications (supra) also relied on the principle elucidated in the case of Voestalpine Schienen GmbH v. DMRC,14 wherein DMRC nominated a five- member panel comprising names of employees of Railways, Central Public Works Department or public sector undertakings and the Court upheld the nomination inter alia noting that empaneling of such retired persons was intended to utilise their technical expertise. 15 In Central Organisation of Railway Electrifications (supra) this Court relied on the aforementioned judgment to state that:

22. For the reasons stated above, the present application under Section 11(6) of the Arbitration and Conciliation Act, 1996 is allowed. We hereby appoint Ms. Justice Indu Malhotra, a former judge of this Court as the Sole Arbitrator to adjudicate upon the disputes arising under and in connection Ibid.

with the Conditions of Tender entered into between the parties, subject to the mandatory disclosures under the amended Section 12 of the Arbitration and Conciliation Act, 1996.