Unilateral appointment of a sole arbitrator violates equal treatment principles and renders the award void ab initio under the Arbitration and Conciliation Act, 1996.

JUDGMENT :

RAJESH S. PATIL, J.

1. The dispute between the parties is arising out of Loan Agreements. The Respondent no. 1 is Borrower who had approached and applied for mortgaged loan facilities from the Applicant-claimant. The Respondent no. 2 is the Co–Borrower for the loan advanced to the Respondent no. 1. Since the dispute arose between the parties under the said agreement, the claimant invoked Arbitration Clause, hence the lender – L & T Finance, appointment Sole Arbitrator, and the matter was referred to Arbitration.

2. Before the Sole Arbitrator, the Judgment Debtor initially raised the issue of unilateral appointment of Sole Arbitrator, by filing an Application under Sections 12 , 16 r/w. ground no. 22 of the Fifth Schedule of the Arbitration and Conciliation Act, 1996 (for short “Act, 1996”). The said Application filed by the Judgment Debtor was rejected by the Sole Arbitrator by its Order dated 23 July, 2019.

3. Similarly, before the Sole Arbitrator, the Judgment Debtor had filed an Application u/s 13(2) of the Act, 1996, for termination of the mandate of the Sole Arbitrator. The said Application filed by the Judgment Debtor was also rejected by an Order dated 30 July, 2019.

4. The Sole Arbitrator proceeded further with the arbitration hearing and by his Order dated 7 August, 2019 passed an Award directing the Judgment Debtor to pay to the Claimant a sum of Rs.1,01,12,482/- and a sum of Rs.1,57,559/- in respect of two loan accounts and further to pay interest on the said principal amount along with costs and fees of the Arbitrator.

5. Admittedly, the Judgment Debtor did not challenge the Award by filing an Application under Section 34 of the Act, 1996.

6. Since the decreetal amount was not paid, the Claimant, filed this Commercial Execution Application before this Court, in which an Interim Application for disclosure of assets along with other reliefs was sought. In reply to the said Interim Application, the Judgment Debtor has once again raised an issue about Unilateral appointment of the Sole Arbitrator is void ab-initio.

7. Learned Single Judge of this Court (Coram : Abhay Ahuja, J.) by order dated 14 October, 2025 appointed Counsel Mr. Rubin Vakil as an Amicus Curiae in the present proceeding.

8. I have heard learned Counsel for the Decree Holder, Judgment Debtor and learned Amicus Curiae. I have also gone through the documents on record and judgments cited by the counsel.

9. Supreme Court in its recent judgment, decided on 5 January, 2026, in the matter of Bhadra International (India) Pvt. Ltd. and others vs. Airport Authority of India, Civil Appeal No. 37-38 of 2026, was dealing with the facts where the sole arbitrator passed an Award whereby claims and counter claims of the respective parties were rejected. Aggrieved by the dismissal of its claim, the appellant challenged the award u/s 34 before the Single Judge of Delhi High Court. While the said application u/s 34 was pending, the appellant sought to amend its application and to contend that since the arbitrator was appointed ‘unilaterally’, the award was liable to be set aside. The said amendment application of the appellant was rejected by the Single Judge. Being aggrieved by the said rejection, the appellant preferred an appeal u/s 37, before the Division Bench, which was also dismissed, pursuant to which the appellant preferred an