1. Challenge to Section 34 order dismissing petition against award passed ex-parte on ground of limitation. (Para 2 , 3 , 4 , 5 , 6 , 7 , 8 )
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2026 Supreme(Online)(Del) 22050
IN THE HIGH COURT OF DELHI AT NEW DELHI
Prathiba M. Singh, Dinesh Bhatt, JJ
Shikha Ghosh – Appellant
Versus
Axis Bank Ltd. – Respondent
FAO (COMM) 91/2025 | CM APPL. 20542/2025
Advocates:
For the Appellants/Petitioners: Vishal Gupta, Ratneswar Das, Barnali Deka Das, Swati Singh
For the Respondents: Dayan Krishnan, Sanjay Kumar, Ramesh Babu, Manisha Singh
For the Appellants/Petitioners: Vishal Gupta, Ratneswar Das, Barnali Deka Das, Swati Singh
For the Respondents: Dayan Krishnan, Sanjay Kumar, Ramesh Babu, Manisha Singh
Unilateral appointment of arbitrators by a party, especially when the same arbitrator handles thousands of cases for that party, violates the principle of neutrality and independence, rendering such awards void ab initio and unenforceable.
Headnote:(A) Arbitration - Independence and Impartiality - Unilateral appointment of a sole arbitrator by one party, particularly when the same arbitrator handles thousands of cases for that party, violates the core principle of neutrality and creates justifiable doubts regarding impartiality. (Para 22)
(B) Arbitration and Conciliation Act, 1996 - Section 12 and Fifth Schedule - Appointment of an arbitrator who has been appointed on numerous occasions by the same party within a short period falls under the grounds of justifiable doubt as to independence, rendering such appointments and subsequent awards void ab initio. (Para 14, 15, 17)
(C) Enforcement of Awards - Awards passed by unilaterally appointed arbitrators in violation of statutory neutrality requirements are unenforceable. (Para 31)
Issues: Whether an arbitral award passed by a sole arbitrator unilaterally appointed by a bank, who had adjudicated thousands of similar cases for the same bank, is valid and enforceable.
Legal Category Hierarchy
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arbitration
- arbitrator appointment
- arbitral award
- challenge to award
- practice and procedure
- banking and finance
Table of Contents
2. Appellant disputed service and knowledge of proceedings; Bank conceded awards by unilaterally appointed arbitrators are void. (Para 4 , 5 , 6 , 17 )
3. Unilateral appointment of same arbitrator in thousands of cases violates neutrality and provisions of Arbitration Act. (Para 14 , 15 , 16 , 22 )
4. Repeated unilateral appointment of an arbitrator by one party creates justifiable doubts as to independence and impartiality. (Para 14 , 15 , 16 , 22 )
5. Appeal allowed; award declared unenforceable; Bank to file affidavit on remedial measures and RBI to issue guidance. (Para 31 , 32 , 33 , 34 )
6. What constitutes a violation of arbitrator independence under the Arbitration and Conciliation Act?
Handling thousands of arbitrations for the same appointing party over a few years raises justifiable doubts as to independence and impartiality. (Para 14 , 15 , 16 , 22 )
7. Are arbitral awards passed by unilaterally appointed arbitrators enforceable?
Such awards are void ab initio and unenforceable, following the principle of neutrality established in Perkins Eastman and Railway Electrification cases. (Para 17 , 18 , 31 )
Prathiba M. Singh, J. (Oral)
1. This hearing has been done through hybrid mode.
2. The issue that has arisen in this case is with respect to enforcement of Awards wherein the Respondent has not been properly served as also unilateral appointment of the same arbitrators made by Banks in thousands of disputes.
3. The present appeal has been filed challenging the impugned order dated 30th January, 2025 passed by the ld. District Judge (Commercial Court)-05, Tis Hazari, Delhi. Vide the impugned order the petition under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter “the ACA, 1996”) has been dismissed on the ground of limitation.
4. The brief facts of the case are that sometime in January, 2019 the Respondent Bank had disbursed a loan for a sum of Rs. 16,66,795/- to the Petitioner. The said loan was allegedly not repaid by the Appellant and accordingly the Respondent Bank initiated arbitration proceedings after communicating the same to the Appellant on 18th January, 2023. However, receipt of this communication is disputed by the Appellant.
5. On 6th February, 2023, the ld. Sole Arbitrator is stated to have accepted the reference of dispute to arbitration and allegedly issued notice to the Appellant. The receipt of this notice is, again, disputed by the Appellant. Accordingly, the matter proceeded ex-parte as against the Appellant in terms of order dated 16th May, 2023 passed by the ld. Sole Arbitrator.
6. Thus, the case of the Appellant is that the Award dated 26th May, 2023 was passed without the knowledge of the Appellant as to the existence of the said arbitral proceedings.
7. A copy of the said Award was received by the Appellant on 2nd June, 2023 and upon the award coming to the knowledge of the Appellant, a petition under Section 34 of the ACA, 1996 was filed before the Commercial Court.
8. This petition was dismissed vide the impugned order as being time barred.
9. The present appeal was considered on 7th April, 2025, on which date notice was issued and the TCR was called for. Thereafter, on 5th August, 2025, upon joint submission of the parties the matter was referred to the Delhi High Court Mediation and Conciliation Centre for amicable resolution through mediation, but the same did not fructify.
10. On 3rd September, 2026, after hearing some arguments in this matter, the Court had put the following queries to the Respondent Bank:
“2. The Court has considered the matter and heard the ld. Counsels for the parties. Before proceeding further. Respondent Bank is directed to file an affidavit giving the following information:
i) Whether there is any proof of service of the Appellant in the arbitral proceedings?
ii) Whether Shri. Vikrant Bhardwaj, who was the Sole Arbitrator, is connected to the Respondent Bank in any manner?
iii) Number of arbitrations handled by Shri. Vikrant Bhardwaj, the Sole Arbitrator on behalf of the Respondent Bank.
iv) Whether any declaration in terms of Schedule VI and VII of the Arbitration and Conciliation Act, 1996 was given by the said Arbitrator.”
11. Thus, an affidavit was directed to be filed by the Respondent Bank in respect of the above queries. The said affidavit has been filed by the Respondent Bank answering the queries raised by the Court as under:
“3. In compliance with the above directions, the Respondent No.1, respectfully submits its answers to each of the queries as under:
a. Query (i) Proof of Service:
It is respectfully submitted that there exists clear and sufficient proof of service of the Appellant in the arbitral proceedings. The Ld. Sole Arbitrator, in the Award dated 26.05.2023, specifically recorded that notices of the arbitral hearings were issued to the Appellant at her last known address, service was held sufficient, and despite such service the Appellant failed to appear, resulting in her being proceeded against ex-parte. Significantly, the address reflected in the arbitral proceedings is the very same address repeatedly disclosed and admitted b
