* IN THE HIGH COURT OF DELHI AT NEW DELHI Date of decision: 10.02.2026 + ARB.P. 947/2024 & I.A. 8984/2025 (Dir.)

M/S SANDHU MOTOR FINANCE PVT LTD .....Petitioner Through: Ms. Sonali Arora, Advocate.

versus RAHUL KASHYAP .....Respondent Through: None.

CORAM:

HON'BLE MR. JUSTICE HARISH VAIDYANATHAN SHANKAR % JUDGEMENT (ORAL)

HARISH VAIDYANATHAN SHANKAR, J.

1. The present Petition, under Section 11(5) of the Arbitration and Conciliation Act, 1996, $~5, has been filed seeking the appointment of Sole Arbitrator for the purpose of adjudication of disputes inter se the parties arising out of the Loan Agreement being SMF/2018/41 dated 21.12.2018, 2Agreement executed between the parties.

2. Clause 17 of the Agreement, which is stated to be the arbitration clause, reads as follows:

“17. Arbitration and Dispute Settlement a) All disputes, differences and/or claims, arising out of this Agreement, whether during its subsistence or thereafter, shall be settled by arbitration in accordance with the provisions ofthe Arbitration and Conciliation Act, 1996 or any otherstatutory modification or re- enactment for the time being inforce and shall be

1The Act

conducted by a sole arbitrator to be appointed by the Lender. The applicable law shall be Indian laws. In the event of incapacity or resignation or death of the sole arbitrator so appointed, the Lender shall be entitled to appoint another arbitrator in place of the eartier arbitrator, and the proceedings shall continue from the stage at which the predecessor had left b) The award given by the arbitrator shall be final and binding on the parties to this Agreement. The cost of the Arbitration shall be borne with by the Party/ies, in accordance with the Award passed by the Arbitrator.

c) The venue of Arbitration shall be as specified in Schedule 1 hereto and the proceedings shall be conducted in English language.”

3. Learned counsel appearing on behalf of the Petitioner draws the attention of this Court to Schedule 1 of the Agreement, wherein it is specified that the place of the Arbitration as well as the jurisdiction of the Court would be Delhi.

4. The material on record indicates that, pursuant to the disputes that arose between the parties, a Notice under Section 21 of the Act dated 17.07.2021, invoking Arbitration in terms of Clause 17 read with Schedule 1 of the Agreement, was issued by the Petitioner.

However, no reply was filed by the Respondent qua the said notice.

5. Consequently, the Petitioner nominated Ms. Priyanka Agarwal, Advocate, as Sole Arbitrator, to adjudicate upon the claims of the Petitioner.

6. A request letter dated 19.07.2021 was also sent to Ms. Priyanka Agarwal, Advocate, in this regard. Accordingly, the Learned Sole Arbitrator had entered upon the reference.

7. Consequently, an Arbitral Award dated 31.08.2022 was passed by the Learned Sole Arbitrator, in favour of the Petitioner and against the Respondent, awarding a sum of Rs. 3,00,000/-, and the Respondent was also directed to pay Rs. 2,68,500/- towards interest @

36% for the period w.e.f. 22.12.2018 to 15.06.2021, with further

interest @ 36% p.a. till the date of realization and cost of Rs. 7,000/-.

8. The Respondent failed to pay the said outstanding amount and also failed to pay the awarded amount, therefore, the Petitioner filed an execution petition before the Learned District Judge (Commercial Court-01), Central District, Tis Hazari Court, Delhi, which was registered as Ex. Comm. No. 202/2023, titled as “M/S Sandhu Motor Finance Pvt Ltd V. Rahul Kashyap”.

9. However, in view of the law laid down by a Divison Bench of this Court in Kotak Mahindra Bank Ltd. Vs Narendra Kumar Prajapat³, the above said execution petition was dismissed by the learned Commercial Court on the ground that the award passed by the Arbitrator appointed by the Decree Holder unilaterally, was in violation of Section 12(5) of the Act, and therefore, was rendered a nullity and non-executable.

10. Hence, the Petitioner has approached this Court by way of the prese