The Delhi High Court in the judgment delivered on May 30, 2019, in the case ‘Tigmanshu Dhulia Films Pvt. Ltd. v. Rajya Sabha Television’, applied the principle of ‘severability’ in relation to arbitration agreement and held that if a part of the arbitration agreement was invalid, then the same can be severed and the valid parts can be given effect to. This was in conformity with, according to the Court, the fundamental intent of the parties, i.e., to refer the disputes to arbitration.
The High Court referred to the judgment of the Supreme Court in TRF Limited also and held that in view of the amendment of the Arbitration and Conciliation Act, 1996 as amended in 2015, no employee current or former of any party to the arbitration agreement can be appointed as the arbitrator or as member of the arbitral tribunal. However, right of the appointing authority under the arbitration agreement to appoint the arbitrator was upheld.