The validity and binding nature of loan documents, including guarantee agreements and resolutions, are upheld by the court, and findings of fact recorded by an Arbitrator are not subject to challenge.

JAYANT NATH, J.

1. This petition is filed under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the Act) seeking to impugn the Award dated 22.06.2016 passed by the learned Sole Arbitrator.

2. It may be noted that there are two petitions filed challenging the same Award dated 22.06.2016. The claimant/respondent No.1 had initiated the arbitration proceedings against seven parties/respondents. The Award has been passed by the learned Arbitrator against petitioner No.1 the Corporate Guarantor and respondents No.2 to 4. Respondent No.2 was the Principal Borrower, Respondents No.3 and 4 Guarantors were at the relevant time Directors of petitioner No.1 and respondent No.2. Respondents No.2 to 4 have filed a separate petition under Section 34 of the Act being OMP (COMM.) 450/2016 challenging the Award. This petition has been dismissed by this court on 20.09.2017. This petition was also listed on 20.9.2017 and could not be heard on the said date as the learned counsel for the petitioner had sought an adjournment. This matter was heard on 22.9.2017 when I heard learned counsel for the petitioner Shri Sandeep Sharma and learned counsel for respondent No.1 Mr. P.Nagesh. However, in the course of finalising the judgment it was felt necessary to seek some clarifications. Matter was listed in court today for directions. I again heard Mr. P.Nagesh, learned counsel for respondent No.1 who appeared.

3. The factual controversy has already been noted by this court in its judgment dated 20.09.2017 passed in OMP (COMM) 450/2016.

4. The respondent No.1 (S.E Investments Ltd.) is a company incorporated under the Companies Act, 1956 and registered to carry on the business of non-banking financial institution. The case of respondent No.1 as comes out from the pleadings, namely, the statement of claim/replication filed before the learned Arbitrator is that in 2008, DD Global Capital Ltd. (respondent No.2) approached respondent No.1 for availing a loan facility of Rs.4 crores. Loan amount of Rs.3.20 crores was sanctioned and disbursed to respondent No.2 on July, 2008. Respondent No.2 executed various documents including hypothecation agreement, guarantee agreement all dated 08.07.2008. Respondent No.2 is said to have failed to pay the loan amount of Rs.3.20 crores together with interest. Based on discussions later on, respondent No.1 agreed to restructure the loan which had gone into default. Consequently on 31.07.2010, the entire loan amount plus outstanding interest was quantified at Rs. 6.37 crores. This was re-financed by respondent No.1 in the form of five new loans for a period of one year by charging and loading upfront interest @ 30% per annum totalling Rs.9.10 crores which was payable by respondent No.2 to respondent No.1 on 31.07.2011 in the form of one bullet payment. On 31.07.2010, five different loan agreements were entered into i.e. four agreements for Rs.2 crores each and one for Rs.1.10 crores. A loan agreement dated 31.07.2010 was executed by Respondent No.2 as the principal borrower and respondent Nos.3 and 4 and petitioner No. 1 as guarantors. In addition, petitioner No. 1 and respondent Nos.3 and 4 executed guarantee agreement dated 31.07.2010 whereby petitioner No.1 became the corporate guarantors and respondent Nos. 2 and 3 became the personal guarantors. The petitioner No.1 also executed undertakings/ declaration dated 31.07.2010, five debit vouchers of the same date aggregating to Rs.9.10 crores. In addition, a resolution of the Board of Directors dated 30.07.2010 of petitioner No.1 was also placed on record.

5. Based on the above, in the claim petition filed by Respondent No.1, the learned Arbitrator framed 11 issues as follows:-

i. Whether the loan agreements and other loan documents relied on by the claimant in connection with the said loan agreements in question, are illegal, bad in law and void-ab-initio on any of the grounds pleaded by the Respondents ? If so, whether this arbitral tri