Delhi High Court Issues Notice On Plea Challenging Appointment Of Ex-Railway Officials As Arbitrators In Railway Dispute

The Delhi High Court bench comprising Justice Amit Bansal has issued notice in a petition filed under Section 14 of the Arbitration and Conciliation Act, 1996 (“Arbitration Act”), seeking termination of the mandate of the Standing Arbitral Tribunal (“SAT”) constituted by the Union of India, West Central Railway (“Respondent”) in view of the ruling of the Supreme Court in Central Organisation for Railway Electrification v. ECI SPIC SMO MCML (JV). Background Facts The matter arose out of an EPC contract with the West Central Railway (Respondent) for the construction of a viaduct on the Rewa–Sidhi new BG rail line. Soon after the commencement of work, dispute arose and the Petitioner issued a Notice of Dispute concerning the second set of claims under the contract, invoking the dispute resolution mechanism provided under Article 24 of the EPC agreement. Pursuant to this, the respondent curated a panel containing a list of 14 retired Railway Officers for the appointment of arbitrators for SAT. The petitioner nominated its arbitrator from this panel on 07.11.2024. Upon their appointment, the arbitrators filed declarations under Section 12(1) of the Act. Each acknowledged prior service with the Railways, but simultaneously denied any present or past relationship with the parties. The petitioner contended that such disclosures were contradictory and insufficient. The petitioner invoked Section 14 of the Arbitration Act, seeking termination of the mandate of the SAT, which was composed entirely of retired railway officers on the grounds that the SAT was ineligible under Section 12(5) read with the Seventh Schedule. The petitioner relied on the recent Constitution Bench ruling of the Supreme Court in Central Organisation for Railway Electrification v. ECI SPIC SMO MCML (JV), which held that Railways cannot constitute arbitral tribunals exclusively from its own retired officials, as such appointments compromise the independence and neutrality of the arbitral process. The petitioner sought substitution of the SAT with a sole arbitrator to adjudicate the second set of claims and all future disputes under the EPC contract. Order of the High Court The Court issued notice in the petition. The Court directed the SAT to defer hearings in the second set of claims to a date beyond the next listing before the High Court. The matter has been posted for further hearing on October 6, 2025. Case Title: M/s Royal Infraconstru Limited v. Union of India, West Central Railway Case No.: O.M.P. (T) (COMM.) 80/2025 Counsel for the Petitioner: Mr. Abhinay Sharma and Ms. Parul Khurana, Advocates. Date of Order: August 18, 2025 Click Here To Read/Download Order

Delhi High Court Issues Notice On Plea Challenging Appointment Of Ex-Railway Officials As Arbitrators In Railway Dispute

Tazeen Ahmed

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