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"39] According to learned Advocate for the applicant, in view of
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21 April 2025 coara 8-23.odt amendment of 2015 in Section 12(5) of the Arbitration and Conciliation Act Col. Vivekanand Choudhary (Retired) being Managing director of the applicant company was ineligible to act as an Arbitrator.
40] Sub-section 5 and Section 12 was inserted by Arbitration and Conciliation (Amendment) Act 2015 with effect from 23/10/2015 which reads as under:
"12(5) --- Notwithstanding any prior agreement to the contrary, any person whose relationship, with the parties or counsel or the subject-matter of the dispute, falls under any of the categories specified in the Seventh Schedule shall be ineligible to be appointed as an arbitrator.

48] In view of above discussion, in my view, in the light of provisions of Section 12(5) of Arbitration and Conciliation Act Col. Vivekanand Choudhary (Retd.) being Managing Director of the applicant company was ineligible to act as an Arbitrator. .....

51] In view of aforesaid discussion, I hold that Col. Vivekanand Choudhary (Retd.) was ineligible to act as an Arbitrator by virtue of provisions of Section 12(5), 14 and 15 of the Arbitration and Conciliation Act. It can be termed as illegality in the Arbitral Proceedings by virtue of the provisions of Section 34(2A) of Arbitration and Conciliation Act. The Award is required to be set aside. In view of peculiar facts of the case, it would be just and proper to direct both the parties to bear their costs." Submissions on behalf of the Appellant:-

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21 April 2025 coara 8-23.odt was raised to the appointment of arbitrator, after full participation in the arbitration which was held to be foul of section 12(4) of the Act. It is in such context, the Supreme Court made the following observations:-

"38. The provisions of The Arbitration and Conciliation Act, 1996, including section 12(5) read with the proviso are not fact- neutral. The statutory leeway given to parties is for a purpose; which is to facilitate the speed and ease of the arbitration procedure. The Act aims to aid parties who are ready to flow with the momentum built into the statute and not parties who change their positions consequent to adverse orders in the arbitration. Section 12(5) is certainly not context-indifferent where a party's continuous, repeated and unequivocal acceptance of the arbitrator's appointment and subsequent participation in the arbitration is wiped out simply on an application being filed for termination of the arbitrator's mandate.