Allowed

M/S. Shriram Finance Limited v. Jose Mathew

Kerala HC13 Dec 2023AR/186/2023

Case brief

AI extract

What is this about?

The High Court of Kerala, in an arbitration request filed by a non-banking financial company, appointed an independent sole arbitrator. The court set aside the nominated arbitrator under Section 12(5) of the Arbitration and Conciliation Act, 1996 and directed the registry to follow prescribed disclosure procedures.

What did the court decide?

Appointment of Sri. E.K. Vasan as sole arbitrator. Registry to communicate order and obtain disclosure statement. Parties to mark appearance before arbitrator on 30.01.2024.

M/S. Shriram Finance Limited Vs Jose Mathew — Arbitration | Kerala HC (2023)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT

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THE HONOURABLE MR. JUSTICE DEVAN RAMACHANDRAN
WEDNESDAY, THE 13TH DAY OF DECEMBER 2023 / 22ND AGRAHAYANA, 1945

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AR NO. 186 OF 2023

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APPLICANT:

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M/S. SHRIRAM FINANCE LIMITED (FORMERLY KNOWN AS
SHRIRAM TRANSPORT FINANCE COMPANY LTD),
2ND FLOOR, CITY MALL, OPP. YMCA, KANNUR ROAD,
KOZHIKODE, PIN – 673 001 REPRESENTED BY ITS
POWER OF ATTORNEY HOLDER, MADHUSOODHANAN M.K.,
S/O. PADMANABHAN NAIR, AGED 53, SREEPADAM HOUSE,
THALAKKULATHUR P.O., KOZHIKODE, PIN – 673 317.

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BY ADVS.
P.B.SUBRAMANYAN
P.B.KRISHNAN
SABU GEORGE
B.ANUSREE

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RESPONDENTS:

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1 JOSE MATHEW, AGED 46 YEARS, S/O. MATHEW, ADVOCATE, NEDIYAPALAKKAL HOUSE, BEHIND PMOC, MARYKUNNU P.O., KOZHIKODE DISTRICT., PIN – 673012

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2 IBRAHIM KOYA.K., AGED 52 YEARS, S/O. MOIDEEN KOYA, SIDHRA HOUSE, KARUMAN KUZHI NILAM, VALAKETTU NILAM ROAD, P.O. WEST HILL, KOZHIKODE DISTRICT., PIN – 673005

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3 LIMA JOSE, AGED 39 YEARS, D/O. M.T.JOHN, NEDIYAPALAKKAL HOUSE, BEHIND PMOC, MARYKUNNU P.O., KOZHIKODE DISTRICT., PIN – 673012

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ADVS FOR R1 & R3:
E. G. GORDEN
S.K.KRISHNAKUMAR(K/694/1995)
V.M.MARY HARSHA(K/1372/2019)

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THIS ARBITRATION REQUEST HAVING COME UP FOR ADMISSION ON
13.12.2023, THE COURT ON THE SAME DAY PASSED THE FOLLOWING:

AR 186/23

O R D E R

The petitioner is stated to be a non-banking Company, incorporated under the Companies Act; and say that the 1 st respondent had availed of a financial facility from them, guaranteed by respondents 2 and 3. They refer to Annexure A Agreement in substantiation and say that, since the respondents have defaulted payment of the loan, they have no other option, but to invoke Section 22 of the said Agreement; and thus issued Annexure D Notice, seeking that they abide by the loan sanction terms, or agree to the appointment of a sole Arbitrator, since the said Clause renders it obligatory for the parties to resolve all disputes only through the mechanism of arbitration, under the provisions of Arbitration and Conciliation Act, 1996 (hereinafter referred to as ‘the Act’ for short) .

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2 . Sri.Sabu George – learned counsel for the petitioner , further explained that, in fact, going by the aforesaid Arbitration Clause, his client is authorised to appoint a sole Arbitrator, which they did earlier thus leading to an Award being issued; but that the same was set aside through Annexure C judgment, finding that the

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AR 186/23

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appointment of an Arbitrator by his client offends Section 12(5) of

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the ‘Act’. He says that, therefore, his client has been left without

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any other option, but to approach this Court through this Arbitration

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Request, seeking that an independent Arbitrator be appointed.

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3 . Though this matter was called more than once today, there was no appearance on behalf of R1 and R3. This Court is, therefore, forced to dispose of the matter in their absence.

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4 . I have examined Annexure A Agreement and, as rightly

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argued by the learned counsel for the petitioner, Clause 22A thereof obligates the parties to subject all their disputes, differences and claims in connection with its terms, to be adjudicated and resolved through the aegis of a sole Arbitrator. Even though the said Clause allows the petitioner to nominate the Arbitrator, it is obvious that Section 12(5) of the ‘Act’ prohibits it; and hence, this Court will be justified in disregarding the same.

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5 . That said, since the afore Clause is not contested by the respondents and there is no disputation relating to its application, I am certain that this Court is enjoined to allow this Arbitration

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Request, particularly in view of Annexure C judgment.

AR 186/23

In summation:

(a) I nominate Sri.E.K.Vasan, Puthiyedath Arcade, Balan K.

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Nair Road, Kozhikode – 673 006, as the sole Arbitrator to adjudicate and resolve the disputes and differences between the parties to this case arising from Annexure A2 Agreement.

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(b) The Registry is directed to communicate a copy of this order to the learned Arbitrator, within a period of two weeks from today and to obtain a Statement of Disclosure from him under Section 11(8) read with Section 12(1) of the ‘Act’.

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(c) Once the Disclosure Statement is obtained from the learned Arbitrator, the Registry shall release the certified copy of this order, with a copy of the said statement appended to it, retaining the original of the same on the files of this case.

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(d) The fees of the Arbitrator shall be governed by the Fourth schedule to the ‘Act’.

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(e) In order to enable the Arbitrator to commence the proceedings without delay, I direct the parties to mark appearance

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before him at 11 A.M. on 30.01.2024.

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(f) Since the respondent is remaining ex parte in this

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AR 186/23

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proceedings, the learned Arbitrator shall notify them of this date, or

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a future date, appropriately.

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This Arbitration Request is thus allowed.

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Sd/-

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RR

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 DEVAN RAMACHANDRAN

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JUDGE

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AR 186/23

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APPENDIX OF AR 186/2023

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`PETITIONER ANNEX`	`URES`
`Annexure A`	`TRUE COPY OF THE` `AGREEMENT ENTERED` `APPLICANT AND RES`	`HYPOTHECATION CUM-LOAN` `INTO BETWEEN THE` `PONDENTS DATED 31-07-2018`
`Annexure B`	`TRUE COPY OF THE` `NO.2068 OF 2019 D`	`AWARD IN ARBITRATION CASE` `ATED 14-02-2020`
`Annexure C`	`TRUE COPY OF THE` `OP.NO.84 OF 2021` `PRINCIPAL SUBORDI` `KOZHIKODE, DATED`	`ORDER IN ARBITRATION` `ON THE FILE OF THE` `NATE JUDGE'S COURT,` `11-07-2023`
`Annexure D`	`TRUE COPY OF THE` `THE APPLICANT DAT`	`LAWYER NOTICE ISSUED BY` `ED 4-8-2023`
`Annexure E`	`TRUE COPY OF THE` `RESPONDENTS DATED`	`REPLY NOTICE SENT BY THE` `19-08-2023`

M/S. Shriram Finance Limited v. Jose Mathew

Case brief

What is this about?

What did the court decide?

M/S. Shriram Finance Limited v. Jose Mathew

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

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