Back
IN THE HIGH COURT OF KARNATAKA
B.M.Shyam Prasad, J.
Caterpillar Financial Services India Pvt. Ltd - Appellant
Versus
Swapnil Traders - Respondent
Civil Misc. Petition No. 492 of 2022
Decided On : 16-11-2022
Arbitration - Loan Agreement - Appointment of Sole Arbitrator
Fact of the Case:
The petitioner extended financial assistance to the respondents under a Loan and Security Agreement. The respondents defaulted in paying the loan, leading to the petitioner seeking appointment of a Sole Arbitrator for resolution of the disputes in accordance with the Arbitration and Conciliation Act, 1996 and the Arbitration and Conciliation Centre Rules, 2012.
Finding of the Court:
The court found that the respondents had defaulted in paying the loan and that the necessary conditions for the exercise of jurisdiction under Sec. 11(5) of the Arbitration and Conciliation Act, 1996 were satisfied. As requested by the petitioner, a retired District Judge was appointed as the Sole Arbitrator.
Issues: Default in loan payment, appointment of Sole Arbitrator
Ratio Decidendi: The court's decision was influenced by the default in loan payment by the respondents and the satisfaction of the necessary conditions for the exercise of jurisdiction under Sec. 11(5) of the Arbitration and Conciliation Act, 1996.
Final Decision: The petition was allowed, and a retired District Judge was appointed as the Sole Arbitrator to resolve the dispute between the petitioner and the respondents.
JUDGMENT
1. The petitioner, who has extended certain financial assistance to the respondents under the Loan and Security Agreement executed in the month of June 2020, has sought for appointment of a Sole Arbitrator and for conduct of the proceedings at the Arbitration and Conciliation Centre (Domestic and International), Bengaluru. The loan agreement contemplates resolution of the disputes between the parties in accordance with the Arbitration and Conciliation Act, 1996 and the Arbitration and Conciliation Centre Rules, 2012. The learned counsel for the petitioner submits that the respondents have defaulted in paying the loan and as such, notice for commencement of arbitral proceedings is issued on 15/1/2022. The records also indicate that the respondents, though served with the notice of the present petition, have chosen to remain absent. The necessary conditions for exercise of jurisdiction under Sec. 11(5) of the Arbitration and Conciliation Act, 1996 are satisfied. As requested by the learned counsel for the petitioner, a retired District Judge must be appointed as the Sole Arbitrator. Hence, the following:
ORDER [a] The petition is allowed. [b] Shri M. K. Sripathi, a retired District Judge, Address: No.417/1, (Upstairs), 12th 'A' Main, Sector A III Phase, Yelahanka Newtown, Bengaluru - 560 064, is appointed as the Sole Arbitrator to enter reference of the dispute between the petitioner and the respondents and conduct the proceeding at the Arbitration and Conciliation Centre (Domestic and International), Bengaluru according to the Rules governing the Arbitration and Conciliation Centre (Domestic and International), Bengaluru.
[c] The Registry is directed to communicate this order [by E-mail] to the Arbitration and Conciliation Centre (Domestic and International), Bengaluru and also to Shri M. K. Sripathi, a retired District Judge, as required under the Appointment of Arbitrators by the Chief Justice of Karnataka High Court Scheme, 1996.
The court's decision was based on the default in loan payment and the satisfaction of the necessary conditions for the exercise of jurisdiction under Sec. 11(5) of the Arbitration and Conciliation Ac....
Appointment of Sole Arbitrator and Compliance with Arbitration and Conciliation Act, 1996
The court appointed a sole arbitrator for resolving disputes under a loan agreement after respondents failed to adhere to repayment terms and contested the agreement's existence.
The court grants an application for the appointment of a sole arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996, when a valid arbitration agreement exists and the respondent r....
Compliance with arbitration agreement is essential before approaching the court for appointing an arbitrator.
The court exercises its jurisdiction under Section 11(6) of the Arbitration and Conciliation Act, 1996, to appoint a sole arbitrator when a valid arbitration agreement exists and a party has defaulte....
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
