Case Law Details
Hedge Finance Private Limited Vs Bijish Joseph (Kerala High Court)
Held that law mandates neutrality for both arbitrator and arbitrator selection process. Interim award passed by the arbitration who was appointed in contravention of provisions is unenforceable.
Facts-
The petitioner is a public limited company registered with the Reserve Bank of India as a non-banking finance company engaged in providing loans on a hypothecation and guarantee basis. The respondent and his guarantor had entered into Ext.P1 hypothecation agreement with the petitioner to purchase a motor car on hypothecation. It was agreed by the parties that in the case of any dispute between them, the same would be settled in arbitration at Ernakulam. The respondent committed a breach of the agreement. The petitioner invoked Clause 20 of Ext.P1 agreement and issued a notice u/s. 21 of the Arbitration and Conciliation Act, 1996 by suggesting the name of an Arbitrator. Even though the respondent received the notice, he did not send any reply. Inferring that the respondent had accepted the name of the arbitrator suggested by the petitioner, the petitioner appointed a sole Arbitrator. The petitioner filed its claim petition before the nominated Arbitrator along with an application filed u/s. 17 (1) of the Act for interim relief. The Arbitrator passed Ext.P2 ad-interim award permitting the petitioner to repossess the vehicle. The petitioner then filed CMA (Arb)No.530/2022 (Ext.P3), u/s. 17(2), to enforce the Ext.P2 interim award. Along with Ext.P3, the petitioner filed Ext.P4 application to appoint an Advocate Commissioner to repossess the vehicle. Nevertheless, the court below, on a finding that the respondent is residing in Kottayam, by the impugned Ext.P5 order, held it has no jurisdiction and ordered the return of the original petition for representation to the proper Court. Ext.P5 order is irregular and unsustainable in law. Hence, the original petition.
Conclusion-
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