The Bombay High Court ruled that Section 12(5) of the Arbitration and Conciliation Act, 1996 — inserted by the 2015 Amendment — operates prospectively and cannot be used to void pre-2015 arbitral awards during execution proceedings. A party attempted to invoke the Supreme Court's Bhadra International ruling to challenge an unchallenged award on grounds of unilateral arbitrator appointment. The court rejected this, holding that awards passed before the amendment cannot be collaterally attacked at the execution stage using post-amendment ineligibility norms.

Section 12(5) of the Arbitration and Conciliation Act, 1996 was introduced by the Arbitration and Conciliation (Amendment) Act, 2015, effective 23 October 2015. It declares certain categories of persons — those with a relationship to a party or the dispute that raises justifiable doubts about independence — ineligible to be appointed as arbitrators. Crucially, this provision strikes at unilateral arbitrator appointments where one party alone (often through a contract clause) could name the arbitrator from its own panel.

The Bombay High Court's ruling addresses a critical procedural tactic: using the 2015 amendment retrospectively to resist execution of an award that was never challenged under Section 34 (setting aside). The court applied the principle that statutes altering procedural or substantive rights apply prospectively unless the legislature expressly provides otherwise. The 2015 Amendment itself contains a saving clause protecting arbitrations commenced before its commencement.

The Bhadra International distinction matters here: that Supreme Court ruling addressed the validity of unilateral appointments going forward, not as a retroactive tool to defeat finality of pre-2015 awards. Allowing execution challenges on this ground would undermine the principle of finality of arbitral awards — a cornerstone of the Arbitration Act — and permit parties to bypass the limitation period under Section 34.

For CLAT PG aspirants, the exam-relevant principles are: (1) prospective operation of amendatory statutes, (2) Section 12(5)'s scope and the Fifth and Seventh Schedules of the Act, and (3) the distinction between challenging an award under Section 34 versus resisting execution.