L and T Finance Limited vs Shraddha Tractors — Bombay HC (2026) — LawSathi Research

L and T Finance Limited vs Shraddha Tractors — Bombay HC (2026) — LawSathi Research

What the court decided

AI extract

Outcome

Award dated 15 September 2023 set aside; Execution Application No. 1435 of 2025 and the connected Interim Application No. 2672 of 2024 dismissed; parties permitted to initiate fresh arbitration proceedings, with the period from invocation of the arbitration till the date of the order excluded for limitation; liberty to apply reserved where an express written agreement under the proviso to Section 12(5) waives the sole arbitrator's ineligibility.

Issue for consideration

Whether the arbitration award dated 15 September 2023, sought to be executed under Execution Application No. 1435 of 2025, should be set aside on account of the unilateral appointment of the arbitrator, with the ineligibility raised at the execution stage.

Court's answer

In view of the unilateral appointment of the arbitrator and the decision in Bhadra International (India) Pvt. Ltd. and others v. Airports Authority of India, the award dated 15 September 2023 is set aside, and the Execution Application No. 1435 of 2025 as well as the connected Interim Application No. 2672 of 2024 stand dismissed.

Ratio / Principle

It is open to the parties to initiate fresh arbitration proceedings in accordance with law.

Key takeaways

As far as limitation is concerned, the period from the invocation of the arbitration till the date of this order is to be excluded in initiating fresh arbitration proceedings.ratio¶24
Liberty is reserved to apply in the event there exists an express agreement in writing in terms of the proviso to Section 12(5) of the said Act waiving the ineligibility of the sole arbitrator or the right to object under Section 12(5) of the said Act.obiter¶25

Detailed headnote1 paragraphs

High Court of Judicature at Bombay (Ordinary Original Civil Jurisdiction), Abhay Ahuja, J., 18 April 2026 — Interim Application No. 2672 of 2024 in Execution Application No. 1435 of 2025 (L and T Finance Limited v. Shraddha Tractors and others): Counsel for the Applicant reported a unilateral appointment of the arbitrator and sought orders in view of the Supreme Court's decision in Bhadra International (India) Pvt. Ltd. and others v. Airports Authority of India, 2026 SCC Online SC 7, where unilateral appointment of arbitrator was observed to be void ab initio with the ineligibility raisable at any stage, even in execution. Acting on that submission, the Court set aside the award dated 15 September 2023 and dismissed the Execution Application and the connected Interim Application. Parties were left open to initiate fresh arbitration proceedings in accordance with law, with the period from the invocation of the arbitration till the date of the order excluded for limitation. Liberty to apply was reserved in the event an express agreement in writing exists in terms of the proviso to Section 12(5) of the said Act waiving the sole arbitrator's ineligibility or the right to object under Section 12(5). Respondents were unrepresented ('None for the Respondents').

27-IA-2672-2024.doc

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

Digitally signed by KANCHAN KANCHANPRASHANTDHURI PRASHANTDHURIDate:2026.04.18 18:58:16 +0530

ORDINARY ORIGINAL CIVIL JURISDICTION

INTERIM APPLICATION NO. 2672 OF 2024

IN

EXECUTION APPLICATION NO. 1435 OF 2025

L and T Finance Limited … Applicant

Versus

Shraddha Tractors and others … Respondents

WITH

EXECUTION APPLICATION NO. 1435 OF 2025

Ms. Shrutika Mane alongwith Ms. Reet Jain instructed by S.I. Joshi & Co., Advocate for the Applicant. None for the Respondents.

………... CORAM : ABHAY AHUJA, J. DATE : 18 APRIL 2026

P.C. :

When the matter is called out, Ms. Mane, learned Counsel,

appearing for the Applicant informs that in this matter there has been a unilateral appointment of Arbitrator and this Court may pass appropriate orders in view of the decision in the case of Bhadra International (India) Pvt. Ltd. and others vs. Airports Authority of India¹ , where the Hon’ble Supreme Court has clearly observed that unilateral appointment of arbitrator is void ab initio and the ineligibility can be raised at any stage and even in execution.

1 2026 SCC Online SC 7

Kanchan Dhuri 1/2

27-IA-2672-2024.doc

The Execution Application No.1435 of 2025 is not on Board. Upon mentioning, the same is taken on Board.

In view of the aforesaid, the award dated 15^th September 2023 is set aside and the Execution Application as well as the connected Interim Application stand dismissed.

It would be open to 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 be excluded in initiating fresh arbitration proceedings.

Liberty to apply in the event there exists an express agreement in writing in terms of proviso to Section 12(5) of the said Act waiving the ineligibility of the sole arbitrator or the right to object under Section 12(5) of the said Act.

(ABHAY AHUJA, J.)

Kanchan Dhuri 2/2