Mr Dilraj Singh Bhinder, Mr Rishabh Singhle, Ms. Kavya Agrawal, Mr Sujoy Chatterjee, Mr v. CITIFINANCIAL CONSUMER FINANCE INDIA LTD & ANR

12. The petitioners challenged the impugned Award dated 30.11.2012 under section 34 of the 1996 Act before the Hon‟ble Madras High Court, in O.P. No. 207/2013. The Hon‟ble Madras High Court impleaded respondent No. 2 on the express submission of respondent No. 2 that that all outstanding amounts with respect to the subject loan, together with security, stand assigned from respondent No. 1 to respondent No. 2. Subsequently, the Hon‟ble Madras High Court dismissed the petition for lack of jurisdiction and granted liberty to the petitioners to present the petition under section 34 of the 1996 Act before the jurisdictional Supervisory Court at New Delhi.

13. Consequently, the petitioners filed the present petition before this Court. Digitally Signed By:MAYANK Signing Date:01.09.2025 10:55:29 O.M.P. (COMM) 108/2022

14. Learned counsel for the respondent No. 1 states that the subject loan facility has been assigned to respondent No. 2 in the year 2013 and hence, respondent No. 1 has no role in the present petition.

15. Mr. Nag, learned counsel for respondent No. 2 states that the loan account in question has been further assigned to respondent No. 3 and respondent No. 3 is entitled to collect all the outstanding dues. 16. As the respondent No. 2 has assigned the assets in question to the respondent No. 3, this Court vide order dated 10.03.2022, impleaded respondent No. 3 in the present petition. Nobody appeared on behalf of respondent No. 3 nor any reply has been filed on behalf of respondent No. 3. The impugned Arbitral Award is of the year 2012. Hence, I am proceeding to hear the present petition ex-parte.

17. Mr. Singh, learned counsel for the petitioners‟ states that the impugned Award is liable to be set aside as no notice under section 21 of the 1996 Act was served upon the petitioners by the respondent No. 1 referring any alleged dispute to arbitration. Further, even notice under section 11 of the 1996 Act for appointment of an Arbitrator was also not served upon the petitioners by the respondent No. 1. He contends that the absence of any notice invoking arbitration under section 21 of the 1996 Act or any notice under section 11 of the 1996 Act for appointment of an Arbitrator is borne out from the arbitral records.

18. Mr. Singh, learned counsel further submits that the arbitration clause being Clause No. 10.7(h) of the Agreement empowers the „Company‟ i.e., respondent No.1 to unilaterally appoint an Arbitrator. He states that respondent No.1, without consulting or petitioners‟ consent Digitally Signed By:MAYANK Signing Date:01.09.2025 10:55:29 O.M.P. (COMM) 108/2022 appointed the Sole Arbitrator and the petitioners only became aware of the Sole Arbitrator‟s appointment vide the Sole Arbitrator‟s notice dated 10.02.2012. He states that it can hardly be disputed that respondent No.1 has an interest in the outcome of the dispute and such unilateral appointment by an interested party is impermissible in law. 19. He further submits that section 12(1) of the 1996 Act makes it mandatory for the person who has been approached to be an Arbitrator to make disclosure of all circumstances that may give rise to justifiable doubts as to his independence and impartiality. He states that in the present case, the petitioners were not served with any disclosure by the Sole Arbitrator under section 12 of the 1996 Act. He further states that despite this, the petitioners submitted application/ objections under sections 12 and 13 of the 1996 Act. However, the petitioners‟ application/ objections were dismissed without providing any disclosures to the petitioners or without intimating any reasons for disposal thereof.

20. Mr. Singh, learned counsel further submits that the petitioners‟ application/ objections under sections 12 and 13 of the 1996 Act was dismissed without any reply being served on the petitioners. It is stated that on various dates of proceedings the petitioners did not receive prior notice/ intimation of the proceedings. It is submitted that the absence of service of copies of proceedings/orders on the petitioners is borne out from the arbitral records. Thus, this establishes that the petitioners were not given a full and fair opportunity/ hearing in the proceedings, and the proceedings were in violation of principles of natural justice. Digitally Signed By:MAYANK Signing Date:01.09.2025 10:55:29 O.M.P. (COMM) 108/2022

21. Hence, the learned counsel for the petitioners submits that these grave irregularities and illegalities throughout the arbitral proceedings culminated into the impugned ex parte Arbitral Award. Hence, the impugned Award is liable to be set aside under, inter alia, sections 34(2)(a)(iii) and (v), sections 34(2)(b)(i) and (ii) and section 34(2A) of the 1996 Act.

22. I have heard learned counsel for the petitioners and also perused the materials available on record.

23. The principles with regard to the limited scope of interference by a Court under section 34 of the 1996 Act against the Arbitral Award have been reiterated time and again by the Hon‟ble Supreme Court this Court, reliance has been placed on Consolidated Construction Consortium Limited v. Software Technology Parks of India, 2025 INSC 574 (paragraph No. 23). The Court in absence of any ground under section 34 of the 1996 Act, it is not to re-examine the facts to find out whether a different decision can be arrived at1. 24. The law on issue of unilateral appointment of an Arbitrator by a party is no longer res integra. It is well settled that neutrality and independence of an Arbitral Tribunal go to the root of the matter and the principle of equal treatment of parties applies at every stage of arbitration proceedings, including the stage of appointment of the Arbitrator(s).2

25. Learned counsel for the petitioners has assailed the impugned Award on the ground that the respondent No. 1, the initial lender, did not