The court upheld the validity of an arbitration agreement for resolving loan-related disputes, permitting an arbitrator's appointment in the absence of respondent participation.

JUDGMENT

Petitioner is a licensed money lender. 1^st respondent obtained a loan of Rs.70,000/- (Rupees Seventy Thousand only) from the petitioner for purchasing a Royal Enfield motor cycle. The amount was agreed to be re-paid with interest in 18 equal monthly installments. The 2^nd respondent was the guarantor. On 18.01.2022, a vehicle loan agreement was executed. A copy of the same has been produced as Annexure A2. Clause 16 of Annexure A2 provides that any disputes of differences or claims arising out of the loan agreement shall be settled by arbitration.

2. The respondents defaulted re-payment.

Therefore, invoking the arbitration clause Annexure A3 notice dated 14.08.2024 was issued. The same was received by the respondents. However, there was no response from their side.

3. Though a lawyer was named as the Arbitrator in the arbitration clause in Annexure A2, unilateral appointment is not permissible. Hence this arbitration request has been filed.

4. Notice was issued and it was duly served on the respondents. However they have not chosen to appear before this Court. No objection has been therefore raised against allowing this arbitration request.

5. I am satisfied that disputes have arisen between the parties and there is a valid arbitration clause in Annexure A2.

Hence I am of the view that this arbitration request can be allowed. The following directions are therefore issued:-

1. The Kerala High Court Arbitration Centre is directed to nominate an Arbitrator from Panel-V, preferably from Thrissur, as the sole Arbitrator to resolve the disputes that have arisen between the petitioner and the respondents under Annexure A2 Agreement.

2. The learned Arbitrator may entertain all issues between the parties in connection with the said Agreements, including questions of 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.

3. 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.

4. 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.

5. 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.

6. 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.

Sd/-