Institutional arbitration, where a neutral body nominates the arbitrator as per the contract, does not constitute a unilateral appointment. Executing courts lack jurisdiction to challenge arbitral awards based on arbitrator eligibility; such objections must be raised through defined statutory procedures within the prescribed limitation period.

JUDGMENT :

BIPIN GUPTA, J.

1. In the present appeal, the notices were issued to the respondents however, when service was not effected through ordinary mode, substituted mode of service was adopted. Vide order dated 09.10.2025, the application for substituted service was allowed and the petitioner was directed to effect service by way of publication in the daily newspaper. However, despite service through paper publication also when none appeared to oppose the present writ petition, this court heard the matter in ex-parte and the order was reserved.

2. The present writ petition has been filed assailing the orders dated 09.05.2024 and 06.07.2024, passed by learned Commercial Court, Ajmer, in Execution Application No. 59/2024 and Civil Misc. Case No. 01/2024 (CIS No. 06/2024), whereby the execution application filed under Section 36 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the ‘Act of 1996’) was dismissed and even the review petition preferred by the petitioner was dismissed.

3. The facts in a nutshell are that in the year 2019, the respondents have approached the petitioner to avail a financial/loan transaction in the nature of a loan facility against the purchase of a vehicle to the tune of Rs.6,80,000/- vide loan agreement No. P010700530 dated 06.11.2019. The borrowers i.e. respondent No.1 and 2 in the capacity of borrower and co- borrower executed the loan agreement and agreed to adhere to the repayment schedule as envisaged.

3.1 Accordingly, the appellant in order to secure the repayment of the loan had hypothecated the vehicle i.e. Hyundai i20, 2020 Model bearing registration No. RJ 37 CB 1276, as secured asset, in favour of the petitioner.

3.2 The respondents-borrowers as per the terms of the loan agreement were jointly and severally liable to repay the loan amount. Further, the repayment of the aforesaid loan facility had to be made in equal monthly installments and the secured asset were to remain hypothecated in favour of the petitioner till the satisfaction of the loan agreement.

3.3 Due to the onset of the COVID-19, certain guidelines were issued by the Reserve Bank of India and in view of the same, the petitioner granted benefits of the moratorium to the respondents. Pursuant to the availing of the aforesaid loan facility and the benefits of the moratorium granted, the respondents failed to adhere to the repayment schedule and started committing default in repayment. The petitioner made several requests to the respondents, however they failed to repay the dues and even the handing over of the possession of the hypothecated asset.

3.4 As the respondents have defaulted in their repayment obligation, the petitioner in accordance with the arbitration clause under the loan agreement, issued a notice dated 22.04.2022, whereby the respondents were called upon to repay the outstanding amount of Rs.5,77,223.03/-. Despite the demand notice, the respondents failed to repay the outstanding dues. Thus, in furtherance of the arbitration clause in the loan agreement, the petitioner was compelled to initiate arbitration proceedings and as per Article 22 of the loan agreement, the parties had envisaged the reference for adjudication of the dispute through the ‘Madras Chamber of Commerce and Industry’ (hereinafter referred to as the ‘MCCI’).

3.5 Since the respondents have failed to repay the outstanding dues, the petitioner invoked the