Shriram City Union Finance Ltd. vs Shahbaz Abdul Wahab Khan and Another — Bombay HC (2026) — LawSathi Research

Shriram City Union Finance Ltd. vs Shahbaz Abdul Wahab Khan and Another — Bombay HC (2026) — LawSathi Research

What the court decided

AI extract

Outcome

Leave and liberty granted to withdraw the execution application and to initiate fresh arbitration proceedings; the Arbitral Award declared non-est in law, non-executable and void-ab-initio; the period from invocation of the arbitration till the decision date excluded for limitation purposes in the fresh arbitration proceedings; Notice and Interim Applications disposed of.

Issue for consideration

Whether leave may be granted to the applicant to withdraw the execution application, with liberty to initiate fresh arbitration proceedings, given that the underlying Arbitral Award arose from a unilateral appointment of the arbitrator. +2 more

Court's answer

Leave and liberty as prayed for — withdrawal of the execution application with liberty to initiate fresh arbitration proceedings — is granted.

Ratio / Principle

The Arbitral Award which is the subject matter of the present proceedings is declared to be non-est in law, non-executable and void-ab-initio.

Key takeaways

It shall be open for the parties to initiate fresh arbitration proceedings in accordance with law.ratio¶19
For limitation purposes, the period from the invocation of the arbitration till today shall stand excluded for initiating fresh arbitration proceedings.ratio¶20
In sequel to the withdrawal of the execution application, the Notice and the Interim Applications, if any, also stand disposed of.ratio

Detailed headnote1 paragraphs

Bombay High Court, OOCJ (Rajesh S. Patil, J.), 24 February 2026 — In execution application 7 N/527/2025 arising in EXA/512/2018 (Shriram City Union Finance Ltd. v. Shahbaz Abdul Wahab Khan and another), the applicant sought leave to withdraw because the underlying Arbitral Award rested on a unilaterally appointed arbitrator. Relying on the Court's earlier view in L & T Finance Ltd. v. Sangeeta Bhansali (Commercial Execution Application (L) No. 5277 of 2022) and the Supreme Court's judgment of 5 January 2026 in Bhadra International (India) Pvt. Ltd. v. Airport Authority of India (Civil Appeal Nos. 37-38 of 2026) — holding that even at the stage of execution an award can be set aside as void-ab-initio where the arbitrator's appointment was unilateral — the Court granted leave to withdraw, declared the Arbitral Award non-est in law, non-executable and void-ab-initio, permitted the parties to initiate fresh arbitration, and excluded the period from invocation of arbitration until that date for limitation purposes. The execution application, its Notice and any Interim Applications stand disposed of.

2026:BHC-OS:5128

Diksha Rane 7 N 527 2025.doc

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION

7 N/527/2025 In EXA/512/2018

SHRIRAM CITY UNION FINANCE LTD. VS SHAHBAZ ABDUL WAHAB KHAN AND ANOTHER

Mr. Vishal Narkar for the applicant.

CORAM : RAJESH S. PATIL, J. DATE : 24 FEBRUARY 2026.

P.C. :

Learned counsel appearing for the claimant submits that the execution proceedings arise out of an Arbitral Award, where the Arbitrator’s appointment was unilateral. Hence, he on instructions of his client seeks leave to withdraw the present execution application, with liberty to initiate fresh arbitration proceedings.

I have taken a view in the judgment of L & T Finance Ltd. vs. Sangeeta Bhansali & Anr. in Commercial Execution Application (L) No. 5277 of 2022, considering the latest judgment of the Supreme Court decided on 5 January, 2026, in the matter of Bhadra International (India) Pvt. Ltd. and others vs. Airport Authority

1

Diksha Rane 7 N 527 2025.doc

of India, Civil Appeal No. 37-38 of 2026, wherein it has been held that even at the stage of execution, an arbitral award can be set aside being void-ab-initio on the grounds that the appointment of the arbitrator was unilateral.

1. Leave and liberty as prayed for, is granted.

3.1) The Arbitral Award which is subject matter of the present

proceedings is hereby declared to be non-est in law, non-executable and void-ab-initio.

1. Execution Application stands disposed of as withdrawn.

1. In sequel, the Notice and the Interim Applications, if any, also stand disposed of.

It shall be open for the parties to initiate fresh arbitration proceedings in accordance with law.

As far as limitation is concerned, the period from the invocation of the arbitration till today shall stand excluded for the purpose of initiating fresh arbitration proceedings.

(Rajesh S. Patil, J.)

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Signed by: Diksha Rane Designation: PS To Honourable Judge Date: 25/02/2026 12:35:03