Delhi High Court
M/S Balaji Enterprises And Ors vs M/S Sundaram Finance Ltd on 24 July, 2025
Author: Navin Chawla
Bench: Navin Chawla
$~53 & 54
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of decision: 24.07.2025
+ EFA(COMM) 8/2025 & CM APPL. 40684/2025
+ EFA(COMM) 9/2025 & CM APPL. 40686/2025
M/S BALAJI ENTERPRISES AND ORS.
.....Appellants
Through: Mr.Sahil Mongia, Ms.Sanjana
Samor & Mr.Yash Yadav, Advs
versus
M/S SUNDARAM FINANCE LTD
.....Respondent
Through: Mr.Nikhil Swami, Adv
CORAM:
HON'BLE MR. JUSTICE NAVIN CHAWLA
HON'BLE MS. JUSTICE MADHU JAIN
NAVIN CHAWLA, J. (ORAL)
1. These appeals have been filed by the appellants, challenging the
Orders dated 03.06.2025 passed by the learned District Judge
(Commercial Court)-04, South West District, Dwarka Courts, Delhi
(hereinafter referred to as the, 'District Judge') in Execution (Comm.)
No. 3/2025 and Execution (Comm.) No. 4/2025, both titled Sundaram
Finance Ltd. v. Balaji Enterprises, whereby the objections filed by
the appellants against the execution of the Arbitral Award dated
16.08.2024 were dismissed.
2. The short question that arises for consideration in these appeals
is whether the learned Arbitrator had been unilaterally appointed by
the respondent, thereby rendering the Award a nullity in terms of the
Judgment of the Supreme Court on this issue.
3. Before we proceed to consider the submissions of the parties on
this issue, we would first reproduce the arbitration clause between the
parties, as under:-
"22. (a) All disputes, di8erences and/or claim,
arising of this agreement, whether during its
subsistence or thereafter shall be settled by
arbitration in accordance with the provisions
of Arbitration & Conciliation Act, 1996 or any
statutory amendments thereof and shall be
referred to the sole Arbitration of an
nominated by the The Madras Chamber of
Commerce & Industry (MCCI), presently
having its office "Karumuttu Centre", 1 Floor,
634, Anna Salai, Chennai or nominated by the
Managing Director of the lender. The
proceedings shall be governed by the rules
and regulations of the MCCI governing
Arbitration Proceedings. If the sole Arbitrator
is not nominated by the Managing Director of
the lander such as Arbitrator may follow
his/her own rules and procedure. The award
given by the sole Arbitrator shall be final and
binding on the parties to this agreement.
It is a term of this agreement that in the event
of such an Arbitrator to whom the matter has
been originally referred, dying or being
unable to act for any reason, MCCI or
Managing Director of the lander, as the case
may be, shall nominate another person to act
as Arbitrator. Such a person shall be entitled
to proceed with the reference from the stage at
which it was left by his/her predecessor.
(b) The venue of Arbitration proceedings shall
be Chennai.
(c) The Arbitrator so appointed herein above
shall also be entitled to pass on award on the
hypothecated assets and also on any other
securities furnished by or on behalf of any
parties to Arbitration."
(Emphasis supplied)
4. From the above clause, it is apparent that where any dispute
arises between the parties in relation to the Agreement, the same was
to be referred to a Sole Arbitrator to be nominated either by the
Madras Chamber of Commerce & Industry (in short 'MCCI') or by
the Managing Director of the lender. In the present case, the
respondent admittedly did not choose the second option; instead, by
notice dated 21.08.2023, they invoked the Arbitration Agreement and
requested the MCCI to appoint an Arbitrator.
5. Though the learned Counsel for the appellants submits that this
notice was not received by the appellants, the respondent has placed
on record the Acknowledgment Due (AD) cards to show that the
notice was, in fact, received by the appellants.
6. Upon receiving the said notice, the MCCI, by its notice dated
27.09.2023, appointed a Sole Arbitrator to adjudicate the disputes
between the parties. This notice was also duly sent to the appellants
herein. Therefore, it cannot be said that the appointment of the learned
Arbitrator was unilaterally made by the respondent. On the contrary,
the appointment was made by the Institution which, as per the
agreement, had been earmarked by the mutual consent of the parties,
as the appointing authority. Such an appointment, in terms of Section
11 of the Arbitration and Conciliation Act, 1996, would be a valid
appointment and would not fall foul of Section 12(5) of the said Act.
7. We, therefore, find that the objections raised by the appellants
were rightly rejected by the learned District Judge.
8. We do not find any merit in the present appeals. The same,
along with the pending applications, are accordingly dismissed.
NAVIN CHAWLA, J
MADHU JAIN, J
JULY 24, 2025/rv
