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2025 Supreme(Online)(Ker) 47160
IN THE HIGH COURT OF KERALA AT ERNAKULAM
M.A. ABDUL HAKHIM, J
M/S. SHRIRAM FINANCE LIMITED (FORMERLY KNOWN AS M/S. SHRIRAM TRANSPORT FINANCE COMPANY LIMITED) – Appellant
Versus
DEEPUMON MATHEW – Respondent
ARBITRATION REQUEST NO. 128 OF 2025
For the Appellants/Petitioners: SRI.C.HARIKUMAR, SMT.SANDRA SUNNY, SHRI.ARUN KUMAR M.A, SMT.FARAH JYOTHI PRADEEP
Unilateral appointment of an Arbitrator is invalid when challenged; a fresh appointment is required under Section 11 of the Arbitration and Conciliation Act, 1996.
Headnote:Statute Analysis: This application is filed under Section 11 of the Arbitration and Conciliation Act, 1996. Facts of the Case: The first respondent, as borrower, along with the guarantors, incurred financial assistance from the petitioner through Annexure A1 Agreement, which includes an arbitration clause.
Findings of Court:
The prior Arbitrator's award was set aside owing to the unilateral appointment being legally flawed.
Issues: The court needed to address the appointment of a new Arbitrator post the setting aside of the award.
Ratio Decidendi: The court determined that the arbitration clause necessitates a new appointment due to the previous award's invalidation.
Result: The request for arbitration is granted, with directives for appointing a new Arbitrator and managing the arbitration process accordingly.
| Table of Content |
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| 1. application for arbitrator appointment under section 11. (Para 1 , 2 , 3) |
| 2. court grants request for a new arbitrator appointment. (Para 4) |
ORDER
1.
This is an application filed under Section 11 of the Arbitration and Conciliation Act, 1996 , for the appointment of an Arbitrator.
2.
The first respondent, as the borrower, and respondents 2 & 3, as the guarantors, availed financial assistance from the petitioner by executing the Annexure A1 Agreement, which provides for unilateral appointment of an Arbitrator by the petitioner. Invoking the said clause, the petitioner appointed an Arbitrator and the Arbitrator passed an Award dated 08.06.2020 in Arbitration Case No.88/2018. The first respondent challenged the said Award before the District Court and the District Court set aside the Award as per Annexure A3 Order, finding that the unilateral appointment of an Arbitrator by the petitioner is bad in law in view of the decisions rendered by the Hon’ble Supreme Court. Now the petitioner is seeking the appointment of a fresh Arbitrator in view of the fact that the Award passed by the Arbitrator is set aside.
3.
Even though notice was served on the respondents, the respondents have not chosen to appear and contest the matter.
4.
In view of the arbitration clause contained in Annexure A1 Agreement and in view of the fact that the Arbitration Award rendered by the Arbitrator who was unilaterally appointed by the petitioner is set aside by Annexure A3 Order, I allow this Arbitration Request, and it is ordered as follows:
i) The Kerala High Court Arbitration Centre is directed to nominate a District Judge (Retired) from Panel No.III as the sole Arbitrator to resolve the disputes that have arisen between the petitioner and the respondents under Annexure A1.
ii) The learned Arbitrator may entertain all issues between the parties in connection with the said Deed, jurisdiction and limitation, if any, raised by the parties. All contentions of the parties are left open, and they are at liberty to raise their claims and counterclaims, if any, before the learned Arbitrator, in accordance with law.
iii) The Registry shall communicate the substance of this order to the Kerala High Court Arbitration Centre within ten days and the Centre shall inform the learned Arbitrator within a further period of one week and shall obtain duly signed Form 3 as required under Rule 20(4) of the Kerala High Court (Arbitration Centre)
Rules, 2025 and forward the same to this Court.
iv) Upon receipt of the Form 3, the Registry shall issue a certified copy of this order with a copy of the Form 3 appended to the Kerala High Court Arbitration Centre. The Original of the Disclosure Statement shall be retained by the Kerala High Court Arbitration Centre.
v) The fees of the learned Arbitrator of the Kerala High Court Arbitration Centre shall be governed by Rule 28 of the Kerala High Court (Arbitration Centre) Rules, 2025. The manner in which the fees and costs payable by the parties shall be governed by Rule 27 of the Kerala High Court (Arbitration Centre) Rules, 2025.
vi) If the learned Arbitrator needs the assistance of an expert, then he is at liberty to seek such assistance in the course of the arbitration proceedings.
