The court exercises its jurisdiction under Section 11(6) of the Arbitration and Conciliation Act, 1996, to appoint a sole arbitrator when a valid arbitration agreement exists and a party has defaulted on contractual repayment obligations, provided the respondent has been duly served with notice.

O R D E R

I.A. 25470/2025

1. The present application has been filed under Section 5 of the Limitation Act, 1963, seeking condonation of delay of 139 days in filing the present petition.

2. In view of the averments made in the application, the same is allowed and accordingly, disposed of.

ARB.P. 1673/2025

3. The present petition has been filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 (“Arbitration Act”), seeking appointment of a sole Arbitrator for adjudication of disputes arising out of the Loan Agreement dated 02nd September, 2021, entered into between the petitioner and the respondent.

4. None appears for the respondent, despite service.

5. In this regard, learned counsel for the petitioner has drawn the attention of this Court to the affidavit of service, as per which, the respondent stands served.

6. Accordingly, this Court proceeds to decide the present matter.

7. It is the case of the petitioner that by way of the said Loan Agreement, the respondent had been extended a loan of Rs. 10,06,150/- (Rupees Ten Lacs Six Thousand One Hundred and Fifty). In terms thereof, the respondent was under the obligation to repay the loan in equated monthly installments. However, the respondent failed to adhere to the terms and conditions by defaulting in his repayment obligations under the Loan Agreement.

8. Owing to such default, the petitioner, vide an Intimation Notice dated 07th June, 2023, classified respondent’s account as a Non-Performing Asset (“NPA”) and directed the respondent to clear the outstanding dues of Rs. 9,31,428/- (Rupees Nine Lacs Thirty One Thousand Four Hundred and Twenty Eight). Despite receipt of said Intimation Notice, the respondent did not make the required payments.

9. Thereafter, the petitioner invoked the arbitration clause between the parties, i.e., Clause 14 of the Loan Agreement, by issuing a notice dated 21st June, 2024 under Section 21 of the Arbitration Act. The said notice stands duly served upon the respondent.

10. This Court notes the Clause 14 of Loan Agreement dated 02nd September, 2021 between the parties, which contains the arbitration clause and reads as follows:

“14. All disputes, differences and/or claim or questions arising out of these presents or in any way touching or concerning the same or as to constructions, meaning or effect thereof or as to the right, obligations and liabilities of the parties hereunder shall be referred to and settled by arbitration, to be held in accordance with the provisions of the Arbitration and Conciliation Act, 1996 or any statutory amendments thereof, of a sole arbitrator to be nominated by the Lender, and in the event of death, unwillingness, refusal, neglect, inability or incapability of a person so appointed to act as an arbitrator, the Lender may appoint a new arbitrator to be a sole arbitrator. The arbitrator shall not be required to give any reasons for the award and the award of the arbitrator shall be final and binding on all parties concerned. The arbitration proceedings shall be held Mumbai/Delhi.”

11. Further, this Court also takes note of the relevant portion of the Annexure attached to the Loan Agreement, which is reproduced as under:

12. Perusal of the aforenoted arbitration clause, as well as the Annexure, shows that the arbitration proceedings are to be held either in Mumbai or in Delhi, and further, that the place of execution of the Loan Agreement is Delhi. Thus, the present petition has been filed by the petitioner before this Court, by choosing Delhi as the venue for holding the arbitral proceedings between the parties.

13. Th