Dismissed

Mercedes Benz Financial Services India Pvt. Ltd. v. M/S Khokher Enterprises

Delhi HC16 Jan 2024EFA(COMM)/5/2023

Case brief

AI extract

What is this about?

The High Court dismissed the appeal against the Commercial Court's rejection of an enforcement application. The Court upheld that an award rendered by an ineligible arbitrator under Section 12(5) A&C Act is a nullity and unenforceable, rejecting the argument that the objection lacked parties' representation.

What did the court decide?

Appeal dismissed; enforcement application under Section 36 A&C Act remains rejected.

Mercedes Benz Financial Services India Pvt. Ltd. Vs M/S Khokher… — Arbitration | Delhi HC (2024)

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$~28

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IN THE HIGH COURT OF DELHI AT NEW DELHI

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EFA(COMM) 5/2023 CM APPL. 37813/2023 MERCEDES BENZ FINANCIAL SERVICES INDIA PVT LTD ..... APPELLANT Through: Mr. Anirban Bhattacharya, Mr. Muneeb Rashid Malik, Ms. Priyanka Bhatt, Ms. Aliya Durafshan and Mr. Rajeev Chowdhary, Advs.

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versus

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M/S KHOKHER ENTERPRISES ..... RESPONDENT Through:

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CORAM: HON'BLE MR. JUSTICE VIBHU BAKHRU HON’BLE MR. JUSTICE RAVINDER DUDEJA O R D E R 16.01.2024

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The appellant has filed the present appeal impugning the order dated 06.05.2023 passed by the learned Commercial Court rejecting the appellant’s application under Section 36 of the Arbitration & Conciliation Act, 1996 (hereafter ‘the A&C Act’ ) for enforcement of an ex-parte Arbitral Award dated 10.11.2021. The learned Commercial Court had noticed that the sole arbitrator – who was a practicing advocate –was appointed unilaterally by the appellant without concurrence from the respondents. The said arbitrator had proceeded to deliver the ex-parte Arbitral Award in Chennai.

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The learned Commercial Court found that the learned sole arbitrator was ineligible to act as an arbitrator by virtue of Section 12(5) of the A&C Act. Accordingly, the Court held that the Arbitral Award dated 10.11.2021

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This is a digitally signed order.

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The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 21/05/2024 at 15:13:44

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was a nullity and could not be enforced.

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The issue involved in the present case is covered by the earlier decision delivered by this Court in Kotak Mahindra Bank Ltd v. Narendra Kumar Prajapat: EFA(COMM) 3/2023 dated 17.05.2023. This Court had held that an award rendered by a person – who is ineligible to act as an arbitrator by virtue of Section 12(5) of the A&C Act – is a nullity, and, therefore, cannot be enforced. This Court is informed that a Special Leave Petition preferred against the said decision (being SLP(Civil) No.47322/2023) was dismissed by the Hon’ble Supreme Court by an order dated 12.12.2023.

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The learned counsel appearing for the appellant submits that the respondents had not appeared before the learned Commercial Court and set up this objection. Thus, the Court could not reject the application for enforcement of the Arbitral Award on the aforesaid ground. We find no merit in this contention.

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The appeal is, accordingly, dismissed.

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VIBHU BAKHRU, J

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RAVINDER DUDEJA, J

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JANUARY 16, 2024 aks

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Click here to check corrigendum, if any

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This is a digitally signed order.

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The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 21/05/2024 at 15:13:44

Mercedes Benz Financial Services India Pvt. Ltd. v. M/S Khokher Enterprises

Case brief

What is this about?

What did the court decide?

Mercedes Benz Financial Services India Pvt. Ltd. v. M/S Khokher Enterprises

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Statutes considered

Parties & counsel

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