HARISH TANDON,J. - (1.)The nature of the order impugned in the instant appeal, initially, didnot appear to have raised a piquant situation but took a drift when both the parties addressed us on intricately complex questions lending support from the plethora of the judgment rendered by the Supreme Court. To elaborate the exparte ad interim order of injunction and its continuance till the disposal of the temporary injunction application is challenged in the instant appeal where the Civil Court in a suit seeking declaration that the nominated Arbitrator is ineligible under Section 12(5) of the Arbitratioin and Conciliation Act, 1996 is restricted from continuing with the arbitration proceedings by way of anti Arbitration injunction.
(2.)At the first glance the nature of the injunction creates an impression upon us that the said act providing a special fora chosen by the parties to adjudicate and determine the disputes flowing from, arising out of and touching the interpretation of the various terms of the contract should not ordinarily be determined by the Civil Court. However, the parties addressed before us that once the mandate of the Arbitrator or in other words the competence of the Arbitrator is challenged on the ground of ineligibility enshrined under Section 12 (5) of the Act, the Arbitrator is denuded of its power to proceed further and the proper remedy is by way of a civil suit and not to approach the Arbitrator to rule its own jurisdiction under Section 16 of the Act.
(3.)The point appears a deep scrutiny upon assimilation and harmonious construction of the various provisions introduced to the said Act subsequently by way of an amendment in the legislation for the simple reason that whether it strikes at the root of the jurisdiction of the Arbitrator to proceed with the arbitral proceedings. There was no difficulty in upholding the jurisdiction of the Civil Court in 1940 Act where the civil suit could be entertained subject to the exercise of its jurisdiction under Section 21 thereof but such curtailment can be envisioned after its repeal and replaced by a 1996 Act; More particularly, with introduction of Section 5 thereof which takes away the jurisdiction of the Civil court in its ordinary sense of jurisdiction subject to the definition clause defining the court under Section 2(e) of the said Act. Section 5 of the 1996 Act contains a non-obstante clause and a complete embargo is created upon a judicial authority for its intervention except so provided in the first part. The 1996 Act contains an exhaustive provisions both substantive and procedural including the procedure for challenging the mandate of an Arbitrator, termination of such mandate and the competence of the Arbitral Tribunal to rule its own jurisdiction under Section 16 thereof. However, by an amendment having brought in 2015, Section 12 of the said Act underwent on a sea change and in order to ascertain the true intent and purport thereof both the unamended as well as the amended section 12 of the said Act are quoted as under :- (unamended)
" 12. Grounds for challenge.-

(1) When a person is approached in connection with his possible appointment as an arbitrator, he shall disclose in writing any circumstances likely to give rise to justifiable doubts as to his independence or impartiality.

(2) An arbitrator, from the time of his appointment and throughout the arbitral proceedings, shall, without delay, disclose to the parties in writing any circumstances referred to in Sub-section (1) unless they have already been informed of them by him.

(3) An arbitrator may be challenged only if-

(a) Circumstances exist that give rise to justifiable doubts as to his independence or impartiality, or

(b) He does not possess the qualifications agreed to by the parties.

(4) A party may challenge an arbitrator appointed by him, or in whose appointment he has participated, only for reasons of which he becomes aware after the appointment has been made. (Amended)

12. Grounds for challenge.-

(1) When a person is approached in connection with his possible appointment as an arbitrator, he shall disclose in writing any circumstances,--

(a) such as the existence either direct or indirect, of any past or present relationship with or interest in any of the parties or in relation to the subject-matter in dispute, which is likely to give rise to justifiable doubts as to his independence or impartiality; and

(b) which are likely to affect his ability to devote sufficient time to the arbitration and in particular his ability to complete the entire arbitration within a period of twelve months.

Explanation 1.- The grounds stated in the Fifth Schedule shall guide in determining whether circumstances exist which give rise to justifiable doubts as to the independence or impartiality of an arbitrator.

Explanation 2- The disclosure shall be made by such person in the form specified in the Sixth Schedule.

(2) An arbitrator, from the time of his appointment and throughout the arbitral proceedings, shall, without delay, disclose to the parties in writing any circumstances referred to in Sub-section (1) unless they have already been informed of them by him.

(3) An arbitrator may be challenged only if-

(a) circumstances exist that give rise to justifiable doubts as to his independence or impartiality, or

(b) he does not possess the qualifications agreed to by the parties.

(4) A party may challenge an arbitrator appointed by him, or in whose appointment he has participated, only for reasons of which he becomes aware after the appointment has been made.

(5) Nothwithstanding 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:

Provided that parties may, subsequent to disputes having arisen between them, waive the applicability of this Sub-section by an express agreement in writing."