The main legal point established in the judgment is that the appointment of the sole arbitrator unilaterally by one of the parties was improper and impermissible, violating the provisions of Section 12(5) of the Arbitration and Conciliation Act, 1996, and the principles of natural justice.

JUDGMENT

(Prayer: Arbitration Original Petition filed under Section 34(2)(a)(iii), 32(2)(b)(i) & (ii) read with Section 18 of the Arbitration and Conciliation Act, 1996, to set aside the award dated 30.08.2022 passed by the Arbitrator in claim petition G.R.No.275 of 2022.)

1. This Arbitration Original Petition has been filed by the petitioners seeking toset aside the award dated 30.08.2022 passed by the Arbitrator in claim petition G.R.No.275 of 2022.

2. The case of the petitioners is that the respondent advanced a sum of Rs.9,77,000/- under the loan agreement dated 28.08.2018 to the 1st petitioner in respect of the vehicle model LPS 4018 TC 4X2 BS2. The 2nd petitioner stood as guarantor for the above loan agreement. As per the terms of the loan agreement, the 1st petitioner has to repay the said loan amount along with interest in 35 monthly installments. Since the 1st petitioner defaulted the said loan amount, the respondent had repossessed the aforesaid vehicle and sold the same for a sum of Rs.1,15,000/-. For the remaining sum of Rs.6,21,088/-, the respondent filed a claim before the Arbitrator and obtained the award dated 30.08.2022 and the same was received by the petitioners on 12.09.2022. Hence, challenging the said award, this present original petition has been filed by the petitioners.

3. The main grounds of challenge made by the petitioners are that the respondent appointed the learned Arbitrator unilaterally and the award also came to be passed on 30.08.2022 without giving sufficient opportunity to the petitioners. Therefore, the said award is in conflict with the most basic notion of morality or justice. In spite of non-appearance of his counsel, the learned Arbitrator passed an award without giving sufficient opportunity to contest the matter. Therefore, according to the petitioners, the award dated 30.08.2022 passed by the learned Arbitrator cannot be sustained and the same is liable to be set aside.

4. The learned counsel for the petitioners would submit that as per the law laid down by the Hon''ble Apex Court in the case of “Perkins Eastman Architects DPC Vs. HSCC (India) Ltd.” reported in 2019 SCC OnLine SC 1517, in the event of any unilateral appointment of Arbitrator without the consent of the other party, the same would be non-est in law. Therefore, he contended that the appointment of Arbitrator in the present case is non-est in law. In terms of the proviso of Section 12(5) of the Arbitration and Conciliation Act (hereinafter referred as ''the Act''), in the event of unilateral appointment, the appointed Arbitrator can proceed with, when the other party waives the applicability of this Section by way of an express agreement in writing. In the present case, no such express agreement has been made between the parties. Therefore, he would contend that in the absence of any such express agreement, the unilateral appointment of the Arbitrator is null and void and consequently any award passed by the said Arbitrator, is liable to be set aside.

5. The learned counsel for the petitioners would also contend that since the unilateral appointment is contrary to proviso to sub-section (5) of Section 12 of the Act, the same would fall under Explanation (2) of Section 34(2)(b) of the Act, and it is in contravention with the fundamental policy of Indian law as held by the Hon''ble Apex Court. Further, he would contend that the award is also liable to be set aside, since the learned Arbitrator has not given any opportunity to the petitioners to file a counter and contest the matter. Hence, he prayed to set aside the award.

6. On the other hand, the learned counsel for the respondent strongly refuted the contentions of the petitioners, stating that if there is any unilateral appointment, the remedy available to the petitioners is to immediately challenge the same under Section 13 of the Act before the same Arbitral Tribunal. However, in the present case, the petitioners had not resorted to this remedy. Hence, the petitioners are