The Delhi High Court in the case Babu Lal and Anr. v. Cholamandalam Investment and Finance Company Ltd. and Anr, observed and has reiterated that a party interested in the dispute cannot unilaterally appoint an Arbitrator, and if any Award is being passed as a result of such unilateral appointment, the same would be a nullity.
The Division bench comprising of Justice Sanjeev Sachdeva and Justice Manoj Jain in the case observed and has noted that the respondents’ nomination of the Arbitrator was without reference to the court in terms of Section 11 of Arbitration and Conciliation Act.
The court in the case observed that the respondents had merely initiated the appellants about appointment of the Arbitrator, without concurring from them.
The Supreme Court also referred the decision in the case Perkins Eastman Architects DPC and Anr. v. HSCC (India) Ltd., thus, it has also been opined by the bench that reference of an arbitral dispute must be to an independent person.
The court in the case observed that an award rendered by an ineligible Arbitrator would be a nullity as has been held by a Coordinate Bench of this Court in the case Kotak Mahindra Bank Ltd. vs. Narendra Kumar Prajapat.
The court while considering the facts and circumstances of the case that the issue had arisen pursuant to the appellants taking a loan from the respondents for purchasing a car. While following the Covid-19 pandemic, they were irregular in certain payments and requested the respondents to defer the payment of EMIs in terms of an RBI circular. Thus, but the respondent did not accede to the request. The counsel, Advocate Ms. Neha Rai appeared for the appellants.
The counsel, Advocate Mr. Puneet Raj represented the responden