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2023 Supreme(Online)(KER) 4962
HIGH COURT OF KERALA
C.S. DIAS, J
SHAMEER T.A. – Appellant
Versus
M/S SHRIRAM TRANSPORT FINANCE COMPANY LTD – Respondent
OP(C) 90/2023
HAARIS MOOSA, C.S.AJITH PRAKASH
The court reaffirmed that disputes regarding arbitral awards should be raised in the executing court, aligning with established legal precedents.
Headnote:
Arbitration - Execution of Award - Arbitration and Conciliation Act - Sections 5
Fact of the Case:
The petitioner sought to set aside an execution petition based on an ex-parte arbitration award received from a unilaterally appointed sole Arbitrator after defaulting on a loan repayment.
Finding of the Court:
The court found that the petitioner did not demonstrate a valid ground to set aside the execution petition, emphasizing that the award's enforceability should have been argued in the lower court rather than rushing to a higher court.
Issues: Is the execution petition liable to be set aside due to being based on an ex-parte award from a unilaterally appointed Arbitrator?
Ratio Decidendi: The court ruled that the validity of the award should have been contested at the lower court level, following the principles outlined in the Supreme Court's precedent regarding arbitral proceedings.
Final Decision: The original petition is dismissed.
JUDGMENT
The original petition is filed to set aside EP No.208/2022 on the files of the Commercial Court, Ernakulam.
2. The petitioner's case is that, he had entered into a hypothecation agreement with the respondent. He had committed default in repaying the loan amount. The petitioner was shocked to understand that a sole Arbitrator has passed an award on 12.01.2019. The award has been put to execution. Ext.P1 award is an ex-parte award. As the award is passed by a unilaterally appointed Arbitrator, the execution petition itself is not maintainable in view of the law laid down by the Honourable Supreme Court inTRF Ltd. vs. Energo Engg. Projects Ltd. /b>. [ (2017) 8 SCC 377 ] andPerkins Eastman Architects DPC vs. HSCC (India) Ltd., [ (2020) 20 SCC 760 ].
Hence, the original petition.
3. Heard; Sri.Harris Moosa, the learned counsel appearing for the petitioner on admission.
4. The question is, is EP No.208/2022 liable to be set aside.
5. The petitioner's case is that Ext.P1 award has been passed by an unilaterally appointed sole Arbitrator, against the law laid down by the Honourable Supreme Court in TRF Ltd. vs. Energo Engg. Projects Ltd. and Perkins Eastman Architectss DPC vs. HSCC (India)
(supra). Hence the award is unexecutable.
6. The Honourable Supreme Court inBhaven Construction v. Sardar Sarovar Narmada Nigam Ltd. [ 2022 (1) SCC 75 ] andDeep Industries vs. Oil and Natural Gases Corporation Limited and another [ 2020 (15) SCC 706 ] has categorically held that the High Courts shall only in the case of exceptional rarity interfere with the arbitral proceedings under the Arbitration and Conciliation Act (in short, “Act”) by invoking its powers of superintendence under Article 226/227 of the Constitution of India.
7. If the petitioner has a case that Ext.P1 award is unenforceable and not executable in view of the law laid down by the Honourable Supreme Court, it is upto the petitioner to raise the said objection before the court below and leave it to the court below to decide the objection, rather than rushing to this Court, particularly in the light of the mandate under Section 5 of the Act and the law laid down by the Supreme Court. Therefore, I am not inclined to entertain this original petition in view of the alternative remedy available to the petitioner.
Resultantly, without prejudice to the right of the petitioner to work out his remedies in accordance with law, the original petition is dismissed.
