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Delhi Metro Rail Corporation Ltd. vs. Sh. Pankaj (Since Deceased) Thr LRs

First Appeal from Order (Commercial) · 2026:DHC:8467-DBDecided 30 Sept 2026New Delhi Bench
FAO (COMM) 23/2025CNR: DLHC011020552024
Justice Anil Kshetarpal · Justice Bharat Parashar

Background

DMRC had appointed one of its own senior employees as sole arbitrator in a parking-site licensing dispute in March 2015, as its contract expressly permitted. Several months later, in October 2015, the law changed to bar an employee of a party from acting as arbitrator. After the award was passed (rejecting the licensee's claims), a lower court set the award aside on the ground that the arbitrator had become ineligible once the new law came into force.

Decision Breakdown

The High Court held that the 2015 statutory change barring employee-arbitrators does not apply retrospectively to arbitrations that had already begun and arbitrators already appointed before the amendment took effect, unless the parties had clearly agreed otherwise. Examining the contract's language (which referred to the arbitration law "as amended from time to time" but also to "provisions in force at the time the reference is made"), the Court found no clear agreement to subject this already-running arbitration to the later amendment. It restored the arbitral award, holding the arbitrator's 2015 appointment was valid when made.

Lesson Learnt

A change in arbitration law generally does not retrospectively undo an arbitrator's appointment that was valid under the law in force at the time it was actually made; the applicable law is normally fixed as of when the arbitration proceedings and appointment occurred.

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