Final Order 6

Order Details: COPY OF ORDER
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12 EX 534/23
KOTAK MAHINRA BANK LTD Vs. RAJIV KUMAR
20.09.2024
Present: None for the DH.
Present court has raised a query regarding maintainability of
the present execution petition in terms of order of “ Kotak Mahindra
Bank Ltd vs Narendra Kumar Prajapat EFA (COMM) No. 3/2023”,
decided on 17.05.2023 passed by Hon’ble High Court of Delhi. The
Division Bench of Hon’ble High Court of Delhi has held that an arbitral
award passed by an arbitrator unilaterally appointed by a party is a nullity
and thus, cannot be enforced.
In the present case, the arbitral award reflects that the
Claimant/DH has appointed the sole arbitrator. Subsequently, upon ex-
parte arbitral award, the DH has filed present execution petition as the
arbitral award is deemed to be a decree/order of the Court. Thus, the said
act of the DH reflects that the authority was with the DH to appoint the
Sole Arbitrator. On the face of it, the appointment of Arbitrator without
the consent of JD was unilateral and Award passed by such Arbitrator is
not enforceable.
Contd……….
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Furthermore, if a single party to the agreement is allowed to
unilaterally appoint the Arbitrator, then it would defeat the purpose of the
impartial arbitration adjudication of the disputes between the parties.
As per the provisions of the Arbitration and Conciliation Act,
1996, the Arbitrator either has to be appointed with consensus of the
parties or by the court. Cases wherein the clause of contract between the
parties give right of appointment of Arbitrator to one party only, the said
clause clothes one of the parties to the contract with the exclusive right to
appoint the arbitrator. Such a clause is not enforceable in law and is also
violative of section 12(5) of the Arbitration and Conciliation Act, 1996.
Thus, it is established that the appointment of Arbitrator by
DH is unilateral and the same is contrary to the provisions of the
Arbitration and Conciliation Act.
Hence, in view of above discussion, present execution petition
stands dismissed as the arbitral award is not enforceable.
File be consigned to Record Room after due compliance.
(Sukhman Sandhu)
CJ-01/JMFC/ND/20.09.2024
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