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Five Star Business Finance Limited v. Palliwagi Prasanna

Arbitration and Conciliation Act, 1996 – S.11 – Appointment of sole Arbitrator

Madras HC13 Oct 2025Arb O.P(COM.DIV.)/441/2025

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Case brief

AI extract

What is this about?

Madras High Court (N. Anand Venkatesh J., 13-10-2025) allowed Section 11 Arbitration and Conciliation Act petition by Five Star Business Finance Limited against four respondents (Palliwagi Prasanna, Palliwagi Jagan, Palliwagi Venkatesh, V Sony) over loan agreement dated 30.06.2022; arbitration invoked by notice dated 12.02.2025 under S.21, unanswered; respondents ex parte despite service; Ms.R.Balambigai Gowri appointed sole Arbitrator; fees per MHCAC Rules 2017; no costs.

What did the court decide?

Appointment of Ms.R.Balambigai Gowri, Advocate, as sole Arbitrator to adjudicate the arbitral disputes between the parties, with sittings in Chennai and fees per the MHCAC Rules 2017; no order as to costs. ¶38

Five Star Business Finance Limited Vs Palliwagi Prasanna — Arbitration | Madras HC (2025)

What the court decided

AI extract

Outcome

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Issue for consideration

Whether an arbitrator should be appointed to decide the disputes and differences between the petitioner and the respondents arising out of the Loan Agreement dated 30.06.2022.

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Court's answer

A dispute exists between the petitioner and the respondents arising out of the loan agreement dated 30.06.2022, and the said agreement contains an arbitration clause.

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Ratio / Principle

The petitioner duly invoked arbitration in accordance with the arbitration clause by issuing notice to the respondents on 12.02.2025 in compliance with Section 21 of the Act, and no reply was received.

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Key takeaways

Since an arbitration clause exists, the petitioner has complied with Section 21, and there is no consensus between the parties on the name of the arbitrator, the Court appointed Ms.R.Balambigai Gowri, Advocate, as sole Arbitrator to adjudicate the disputes between the parties, with sittings at any venue in Chennai.ratio¶36
The fees of the sole Arbitrator shall be in accordance with the Madras High Court Arbitration Centre (MHCAC)(Administrative Cost and Arbitrator's Fees) Rules 2017.ratio¶36

Detailed headnote1 paragraphs

Arbitration and Conciliation Act, 1996 — S.11 — Appointment of sole Arbitrator — Petition by financier under loan agreement dated 30.06.2022 containing arbitration clause — Petitioner invoked arbitration by notice dated 12.02.2025 complying with S.21; no reply; no consensus on arbitrator's name — Respondents served but did not appear — Held, Ms.R.Balambigai Gowri, Advocate, appointed sole Arbitrator to adjudicate disputes, sittings at any venue in Chennai — Arbitrator's fees per Madras High Court Arbitration Centre (MHCAC)(Administrative Cost and Arbitrator's Fees) Rules 2017 — Arb. OP disposed of; no order as to costs.

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Arb O.P(COM.DIV.) No. 441 of 2025

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IN THE HIGH COURT OF JUDICATURE AT MADRAS

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DATED: 13-10-2025

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CORAM

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THE HONOURABLE MR JUSTICE N. ANAND VENKATESH Arb O.P(COM.DIV.) No. 441 of 2025

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Five Star Business Finance Limited Rep by its Legal Officer Mr.MadhuSandanSomeswaran, Registered Office at New No.27, Old No.4,Taylors Road,Kilpauk, Chennai-600010.

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Applicant(s)

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Palliwagi Prasanna No.5-11-532/A,Yellamma Gutta, Nizamabad, Andhra Pradesh-503003.

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2.Palliwagi Jagan No.5-11-532/a,yellamma Gutta, Nizamabad, Andhra Pradesh-503003.

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3.Palliwagi Venkatesh No.5-11-532/a, Yellamma Gutta, Nizamabad, Andhra Pradesh-503003.

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4.V Sony No.5-11-532/a, Yellamma Gutta, Nizamabad, Andhra Pradesh-503003.

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Respondent(s)

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

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Arb O.P(COM.DIV.) No. 441 of 2025

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PRAYER

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To appoint an Arbitrators to decide the disputes and differences between the Petitioner and Respondent in terms of Loan Agreement dated 30.06.2022 .

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For Applicant(s): Ms.Vinodhini Mathelene for Mr.P.H.Vinodh Pandian

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For Respondent(s):

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ORDER

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This petition has been filed under Section 11 of the Arbitration and Conciliation Act, 1996 [for brevity hereinafter referred to as the “Act”] for appointment of an Arbitrator.

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When the matter came up for hearing on 29.07.2025, this Court passed the following order:-

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This petition has been filed under Section 11 of the Arbitration and Conciliation Act, seeking for appointment of an arbitrator by this Court.

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2. There seems to be a dispute between the petitioner and the respondents, arising out of the loan agreement dated 30.06.2022. In the said agreement, there exists an arbitration clause, which is extracted hereunder:

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

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Arb O.P(COM.DIV.) No. 441 of 2025

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3. The petitioner has invoked arbitration in accordance with the arbitration clause by issuing notice to the respondents on 12.02.2025 to comply with the requirements of Section 21 of the Arbitration and Conciliation Act, 1996. No reply has been received for the same.

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4. Since there exists an arbitration clause in the contract,

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which is the subject matter of the dispute between the parties and since the petitioner has invoked arbitration in accordance with the arbitration clause by complying with the requirements of Section 21 of the Arbitration and Conciliation Act, 1996 and since there is no consensus between the parties with regard to the name of the arbitrator, this Court is issuing notice to the respondents, returnable by 21.08.2025. Private notice is also permitted.

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Notices were served on the respondents and the affidavit

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of service has also been filed before this Court. There is no

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

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Arb O.P(COM.DIV.) No. 441 of 2025

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appearance either in person or through counsel.

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Taking into consideration the materials placed before this

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Court and the earlier order passed by this Court on 29.07.2025, Ms.R.Balambigai Gowri, Advocate, at 148, 2^nd line beach road, Parrys, Chennai, Mobile No.9840776464 is appointed as sole Arbitrator and the Arbitrator is requested to adjudicate the arbitral dispute that were arising between the parties by holding the sittings in any venue in Chennai to the convenience of all concerned and render an award. Fees of the sole Arbitrator shall be in accordance with the Madras High Court Arbitration Centre

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(MHCAC)(Administrative Cost and Arbitrator's Fees) Rules 2017.

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