Hdb Financial Services Limited vs Inayat Abdullah Shaikh — Bombay HC (2026) — LawSathi Research

Hdb Financial Services Limited vs Inayat Abdullah Shaikh — Bombay HC (2026) — LawSathi Research

What the court decided

AI extract

Outcome

Arbitral award declared non-est in law, non-executable and void-ab-initio; Execution Application dismissed; Notice and Interim Applications, if any, disposed of; parties permitted to initiate fresh arbitration proceedings with the period from invocation of arbitration till the date of the order excluded for limitation.

Issue for consideration

Whether an arbitral award passed by an arbitrator appointed unilaterally by the claimants can be set aside as void-ab-initio and non-executable even at the stage of execution. +1 more

Court's answer

In view of the judgment in L & T Finance Ltd. v. Sangeeta Bhansali & Anr. read with the Supreme Court's decision in Bhadra International (India) Pvt. Ltd. v. Airport Authority of India, the award in the present proceedings, passed by an arbitrator appointed unilaterally by the claimants, is declared non-est in law, non-executable and void-ab-initio.

Ratio / Principle

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

Key takeaways

The period from the invocation of the arbitration till the date of this order shall stand excluded for the purpose of initiating fresh arbitration proceedings.ratio¶31

Detailed headnote1 paragraphs

Bombay High Court, OOCJ (Rajesh S. Patil, J.) — Execution of arbitral award — Unilateral appointment of arbitrator — Award declared non-est, non-executable and void-ab-initio at the execution stage. Relying on its earlier view in L & T Finance Ltd. v. Sangeeta Bhansali & Anr. (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, the Court held that an arbitral award can be set aside even at the stage of execution as void-ab-initio where the arbitrator's appointment was unilateral. The award passed by the unilaterally appointed arbitrator was declared non-est in law, non-executable and void-ab-initio; the Execution Application was dismissed and the Notice and Interim Applications stood disposed of. The parties were left free to initiate fresh arbitration in accordance with law, with the period from invocation of arbitration till the date of the order excluded for limitation.

Vivekanand

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80-N-767-2025.doc

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

ORDINARY ORIGINAL CIVIL JURISDICTION

NOTICE NO. 767 OF 2025 IN

EXECUTION APPLICATION NO. 1426/2022

HDB FINANCIAL SERVICES LIMITED

….. APPLICANT

VERSUS

INAYAT ABDULLAH SHAIKH ….. RESPONDENT

Mr. Shariq Shaikh i/by M/s. S. G. Legal and Associates, Advocate for the Applicant.

CORAM : RAJESH S. PATIL, J.

DATE : 24^th FEBRUARY, 2026

P.C. :-

Learned counsel appearing for the applicant submits that,

as the ARC has taken over the loan, he does not have any instructions in the present proceedings.

From the proceedings, it can be gathered that the learned arbitrator was appointed unilaterally by the claimants.

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

Vivekanand

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80-N-767-2025.doc

International (India) Pvt. Ltd. and others vs. Airport Authority 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 ground that the appointment of the arbitrator was unilateral.

In view of the aforesaid judgment, the award in the present proceedings passed by the learned arbitrator is hereby declared to be non-est in law, non-executable and void-ab-initio.

Execution Application stands dismissed .

In sequel, Notice & 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.)