IN THE HIGH COURT AT CALCUTTA

ORDINARY ORIGINAL CIVIL JURISDICTION

ORIGINAL SIDE

PRESENT : THE HON'BLE JUSTICE SHAMPA SARKAR

A.P. No. 430 of 2019

Y D TRANSPORT COMPANY AND ANOTHER … PETITIONERS

VS.

SREI EQUIPMENT FINANCE LIMITED … RESPONDENT

For the Petitioners : Mr. Jishnu Chowdhury, Sr. Adv

Mr. Ritoban Sarkar, Adv.

Mr. Soham Sur, Adv.

Mr. Syamantak Banerjee, Adv.

For the Respondents : Mr. Swatarup Banerjee, Adv.

Mr. Sariful Haque, Adv.

Ms. Archana Chowdhury, Adv.

Ms. Priyanka Ghosh, Adv.

Hearing reserved on : 27.11.2025 Judgment delivered on : 02.12.2025

SHAMPA SARKAR, J.

1. This is an application under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as the said Act), challenging an award dated December 28, 2017 passed by the learned

Arbitrator.

2. The dispute emanated from a loan agreement executed between the parties. The loan was obtained for purchase of heavy vehicles for mining related works and excavation. The petitioners contended to have

made certain payments from time to time between2012-2014. According to the petitioners, an amount of Rs. 7.27 crores remained due and payable. Disputes arose over non-payments, inflated calculations and alleged breach of the loan agreement.

3. The respondent invoked the arbitration clause contained in the loan agreement and initiated a proceeding, by unilaterally appointing an Arbitrator.

4. The petitioners alleged that the copy of the loan agreement was not served upon them. The notice invoking arbitration was also not served upon them. It was further alleged that the proceedings continued ex parte and ultimately culminated in the passing of the award by the learned Arbitrator who was appointed at the behest of the respondent. The specific contentions of the petitioners were that, they came to know about the passing of the award when they received a copy of the execution petition filed by the respondent in the court of the District Additional Sessions Judge 1 and Special Judge at Jamshedpur being Execution Case No. 5 of 2022. From the execution petition, the petitioners came to know that the ex parte award was passed. The execution application was filed on February 05, 2019 and the matter appeared before the learned Judge of the executing court on March 06, 2019. The respondent was directed to serve a copy of the execution petition upon the petitioners. The petitioners obtained a copy of the execution petition on April 09, 2019 and filed the instant application on July 05, 2019.

5. The impugned award has been challenged on the following grounds;

(a) Unilateral appointment of the Arbitrator, in violation of the provisions of Section 12(5) of the Arbitration and Conciliation Act, 1996 and contrary to the statutory mandate of equal treatment of the parties under Section 18 of the said Act.

(b) Legal embargo in the appointment of the Arbitrator by a party which had a substantial finance interest in the outcome of the arbitral proceeding and in the claim made before the learned Arbitrator. Violation of Article 14 of the Constitution of India.

Improper constitution of the arbitral tribunal.

(c) Violation of the principle of equal treatment of the parties in an arbitral proceeding which was applicable from the very initial stage of appointment of an Arbitrator.

(d) Absence of an express agreement in writing by the petitioners, thereby waving the applicability of the provisions of the Section 12(5) of the said Act.

(e) Mere participation in the arbitral proceeding would not amount to waiver of the applicability of the provisions of Section 12(5) of the said Act.

(f) The petitioners did not participate in the proceeding, but appeared before the learned Arbitrator and expressed inability to contest the proceeding, in view of the breach of the legal provisions.

(g) The award was silent on the issue as to whether the notice invoking arbitration had ever been served. Service of notice could was not proved by the respondent.

6. Reliance has been placed on the following decisions with regard to