The 2015 amendment transformed Indian law on arbitrator independence — but arbitrations commenced before it remain governed by the gentler, unamended regime. In Union of India v. M/s Shiv Naresh Sports Pvt. Ltd. (O.M.P. (COMM) 20/2015, reserved on 21 August and pronounced on 12 October 2026), Justice Om Prakash Shukla of the Delhi High Court dismissed the Union's challenge to a 2015 award in a Commonwealth Games 2010 athletics-track contract, rejecting the argument that the sole arbitrator's earlier membership of a tender-stage rate committee — disclosed only in 2014 — vitiated the award.
A Games-era dispute, decided a generation later
The underlying contract belongs to the frantic build-up to the 2010 Commonwealth Games: CPWD\'s composite tender for IAAF-approved synthetic athletic tracks at five venues, with the respondent contractor executing the Jawaharlal Nehru Stadium work under an agreement of October 2009. After a High-Level Committee reviewing Games expenditure found the rates inflated, the final bill was settled as a "Zero Bill" with Rs. 3.20 crore withheld. The contractor took its claims to a sole arbitrator, who allowed several of them in July 2015 — and the Union\'s Section 34 petition then waited over a decade in the Delhi High Court\'s commercial list before being decided this week.
The disclosure question under the old law
Before the 2015 amendment, Section 12 required an arbitrator to disclose circumstances likely to give rise to justifiable doubts about independence or impartiality, and permitted challenge on that ground — but contained none of the present Schedules that make specified relationships disqualifying per se. The Court\'s analysis proceeded in three steps.
Waiver and conduct
The Union\'s partial compliance with the award — payment of interest and compliance with another direction — was argued by the contractor as acceptance. The Court rejected waiver on those facts, but decided the petition against the Union on the merits of each ground instead. The sequence is a useful reminder that paying under an award while challenging it does not necessarily waive the challenge, though parties should record reservations when making such payments.
Claim-by-claim: why the merits grounds failed
| Claim | Union\'s objection | Court\'s answer |
|---|---|---|
| Rs. 2.35 crore deducted for FOP consultant visits | Deduction justified by negotiation letter | The letter did not require seven separate visits; deduction without prior notice unjustified |
| Reduced rates for excess quantities | Rates properly reduced | No notice under Clause 12.3 — the contractual precondition — was given |
| Discus cage deduction | Work deficient | No contractual basis for the deduction |
| Delay damages | Beyond the reference | The Union itself relied on the contractor\'s undertaking, bringing the issue within the reference |
The transitional lesson
A surprising number of pre-2015 arbitrations are still working their way through Section 34 and Section 37 dockets. For those matters, counsel must resist arguing the modern Schedules by reflex: eligibility and disclosure are tested under the unamended Section 12, where the question is always whether justifiable doubts actually arise on the facts, and where a party\'s own prior knowledge can be fatal to the challenge. Conversely, for arbitrations commenced after 23 October 2015, the same facts might produce a different result — which is precisely why identifying the applicable regime is the first step in any bias-based challenge.
The petition was dismissed and the award of 9 July 2015 upheld; pending applications were disposed of. The decision turns on the unamended Act and the specific tender-stage character of the arbitrator\'s earlier role.
Frequently Asked Questions
What was the bias objection?
The sole arbitrator had been a member of the committee that examined the contractor's quoted rates at the tender stage of the CPWD works for the 2010 Commonwealth Games, and disclosed this only in June 2014, during the arbitration. The Union argued this created justifiable doubts about his independence and impartiality under Section 12(3) of the 1996 Act as it stood before the 2015 amendment.
Why did the objection fail?
The Court held the committee role was confined to the tender stage and had no connection with the later contract or the disputes referred; the Union, as the employer that constituted the committee, likely knew of the association, engaging Section 12(4)'s bar on belated challenges; and the omission to disclose is not by itself an independent ground to set aside an award — the test remains whether justifiable doubts in fact arise.
Would the result be different under the amended Act?
Possibly. Arbitrations commencing after 23 October 2015 are governed by the Fifth and Seventh Schedules: a person whose prior involvement touches the dispute may be ineligible outright, and disclosure obligations under the amended Section 12(1) are mandatory and detailed. The judgment turns expressly on the unamended regime applicable to this pre-2015 arbitration.
What happened to the money claims?
The challenges to individual claims failed as merits re-argument: the deduction of Rs. 2.35 crore for consultant visits had no contractual basis in the negotiation letter; rate reductions for excess quantities required a notice under Clause 12.3 that was never given; the discus-cage deduction lacked contractual foundation; and the delay-damages finding did not travel beyond the reference. The award of 9 July 2015 was upheld in full.