Executing Courts Cannot Refuse to Enforce Pre-2015 Arbitral Awards by Applying Section 12(5) Retrospectively: Punjab & Haryana High Court

Case Name: Punjab State Civil Supplies Corporation Ltd. v. M/s Ganesh Rice Mills and Another and connected matters

Date of Judgment: 29 May 2026

Citation: CR-5847-2025 and connected cases

Bench: Justice Jasgurpreet Singh Puri

Held: The Punjab & Haryana High Court held that arbitral awards arising from proceedings commenced prior to the 2015 amendments to the Arbitration and Conciliation Act, 1996 cannot be declared unenforceable merely because the arbitrator would be rendered ineligible under Section 12(5) of the amended Act. The Court ruled that Section 12(5) operates prospectively and cannot be retrospectively invoked at the execution stage to invalidate awards passed in arbitrations governed by the unamended legal regime. An executing court cannot refuse enforcement of such awards by re-examining the validity of the arbitral tribunal on the basis of later statutory amendments.

Summary: A batch of seven revision petitions came before the High Court after various executing courts in Punjab and Haryana dismissed execution petitions filed by government procurement agencies and warehousing corporations seeking enforcement of arbitral awards obtained against rice millers and other parties. The executing courts held that the awards were unenforceable because the sole arbitrators who had rendered them were allegedly hit by Section 12(5) of the Arbitration and Conciliation Act, 1996, introduced through the 2015 amendments.

The awards in question arose out of disputes concerning paddy procurement, milling agreements and related commercial transactions. In most cases, the arbitrations had commenced long before the 2015 Amendment Act came into force. The awards were subsequently challenged under Section 34 of the Arbitration Act, but the objections were dismissed. When decree-holders sought execution, the executing courts refused enforcement on the ground that the arbitrators lacked eligibility under the amended Section 12(5).

The principal question before the High Court was whether an arbitral award arising from proceedings initiated before the 2015 Amendment Act could be rendered unenforceable at the execution stage by applying the statutory disqualification introduced through Section 12(5) read with the Seventh Schedule.

The petitioners argued that the executing courts had fundamentally erred by applying the amended law retrospectively. They contended that the arbitration agreements, appointment procedures and arbitral proceedings were all governed by the unamended Arbitration Act, under which departmental or unilateral appointments were legally permissible. Reliance was placed upon several Supreme Court decisions recognizing the prospective nature of the 2015 amendments.

The respondents, on the other hand, argued that neutrality and independence of arbitrators constitute foundational requirements of arbitration law. According to them, once Section 12(5) declared certain categories of arbitrators ineligible, any award rendered by such arbitrators became unenforceable regardless of when the arbitration commenced. They relied upon judgments including Ellora Paper Mills Ltd. v. State of Madhya Pradesh to contend that tribunals lacking neutrality lose their mandate by operation of law.

After examining the legislative framework, the Court undertook a detailed analysis of Section 12 before and after the 2015 amendments. It observed that prior to 23 October 2015, the law merely required disclosure of circumstances creating doubts regarding impartiality. The 2015 Amendment Act fundamentally altered the position by introducing a statutory ineligibility regime through Section 12(5) and the Seventh Schedule.

The Court emphasized that Section 26 of the 2015 Amendment Act and the Supreme Court’s decisions in BCCI v. Kochi Cricket Pvt. Ltd., Hindustan Construction Company Ltd. v. Union of India, Union of India v. Parmar Construction Co., and S.P. Singla Constructions Pvt. Ltd. v. State of Himachal Pradesh consistently establish that the 2015 amendments are prospective in nature. Arbitral proceedings commenced before 23 October 2015 continue to be governed by the unamended law unless the parties expressly agree otherwise.

Significantly, the Court held that the stage at which the challenge is raised is crucial. While certain procedural amendments may apply to post-2015 court proceedings, substantive provisions creating disqualifications and affecting the very validity of arbitral appointments cannot retrospectively invalidate proceedings that had already commenced under the previous regime.

The Court also observed that an executing court ordinarily cannot go behind an award. Once the award has survived challenge under Section 34 and attained finality, the executing court’s role is limited to enforcement. Allowing executing courts to reopen questions regarding the eligibility of arbitrators by retrospectively applying later amendments would undermine certainty and finality in arbitral adjudication.

Rejecting reliance on Ellora Paper Mills, the Court distinguished that decision on facts, noting that it involved arbitral proceedings that were still alive and where the issue concerned continuation of a tribunal after the amended regime had become operative. It did not support invalidation of concluded pre-amendment arbitrations at the execution stage.

The Court further noted with concern that several executing courts across Punjab and Haryana had been dismissing execution petitions through brief orders by mechanically invoking Section 12(5), resulting in denial of enforcement of awards that had already attained finality. The judgment was therefore intended to settle the legal position on the issue.

Decision: The Punjab & Haryana High Court allowed all seven revision petitions, set aside the impugned orders passed by the executing courts, and held that arbitral awards arising from proceedings commenced before the 2015 Amendment Act remain enforceable notwithstanding the subsequent introduction of Section 12(5). The matters were remanded to the respective executing courts for fresh consideration and execution of the awards in accordance with law.