Allowed

M/s Karnik Chemist, Rep.by Proprietor Anup Karnik, v. Shriram Finance Limited

Madras HC11 Aug 2023Arb O.P(COM.DIV.)/281/2023

Case brief

AI extract

What is this about?

The court terminated an arbitrator's mandate appointed unilaterally by the respondent, following Supreme Court precedent. Upon consent, the court appointed a new sole arbitrator to adjudicate the loan default dispute between the parties.

What did the court decide?

The mandate of the respondent-arbitrator was terminated; Mrs. Gladys Rosette C. Daniel appointed as sole arbitrator to adjudicate the dispute arising from the loan agreement.

M/s Karnik Chemist, Rep.by Proprietor Anup Karnik, Vs Shriram… — Arbitration | Madras HC (2023)

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Arb. O.P. (Com. Div.) No.281 of 2023

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Arb. O.P. (Com. Div.) No.281 of 2023

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ABDUL QUDDHOSE, J.

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M/s. Karnik Chemist & others ... Petitioners

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This petition has been filed under Section 14 of the Arbitration

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and Conciliation Act, 1996 seeking for termination of the Mandate of the Arbitrator.

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The petitioners have availed a loan from the 1^st respondent. According to the 1^st respondent, the petitioners have committed default in the repayment of loan under the loan agreement. Based on the arbitration clause contained in the loan agreement, arbitration was initiated by appointing the 2^nd respondent as the sole Arbitrator. The arbitration is in progress. The petitioners seek for termination of the arbitration on account of the unilateral appointment of the Arbitrator by the 1^st respondent.

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It is now settled law as laid down by the Hon'ble Supreme Court in the case of Perkins Eastman Architects DPC vs. HSCC (India)

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https://www.mhc.tn.gov.in/judis

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Arb. O.P. (Com. Div.) No.281 of 2023

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Limited reported in 2020 20 SCC 760 that an unilateral appointment of

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an Arbitrator by a party to the dispute is not legally permissible.

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In view of the settled law, necessarily the Mandate of the sole

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Arbitrator viz., the 2^nd respondent has to be terminated. The learned counsel for the 1^st respondent on instructions would also submit that this petition can be allowed as prayed for and that the 1^st respondent is ready and willing for fresh arbitration through an Arbitrator appointed by this Court. Both the learned counsels have also made an endorsement in the Court bundle stating that they are agreeable for appointment of an Arbitrator by this Court to adjudicate the dispute between the parties arising out of the Loan Agreement, dated 25.01.2021.

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In terms of the endorsement made by both the counsels and in view of the consent given by them on instructions, this Court appoints Mrs.Gladys Rosette C. Daniel, Advocate as the Sole Arbitrator to adjudicate the dispute between the parties arising out of a loan agreement, dated 25.01.2021.

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(a) This Court appoints Mrs.Gladys Rosette C. Daniel,

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Advocate, who is having office at III Floor, YMCA Building,

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No.223, NSC Bose Road, Chennai - 600 001(Mobile

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https://www.mhc.tn.gov.in/judis

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Arb. O.P. (Com. Div.) No.281 of 2023

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No.9789980909) as a sole Arbitrator to adjudicate the dispute

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between the parties arising out of the loan agreement, dated 25.01.2021.

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(b) The Arbitrator shall be paid her remuneration / fees

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in accordance with the 4 th schedule of the Arbitration and Conciliation Act, 1996.

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(d) The Arbitrator shall conduct the arbitration in

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accordance with the provisions of the Arbitration and Conciliation Act, 1996 and shall complete the arbitration within the specified time as prescribed under the said Act.

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11.08.2023

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vsi2

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Arb. O.P. (Com. Div.) No.281 of 2023

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ABDUL QUDDHOSE, J.