ARBITRATION – Appointment of Arbitrator – Unilateral appointment by interested party – Invalidity
Paras 30, 31, 32, 33, 43
Sole Arbitrator appointed unilaterally by Finance Company through its Legal Manager – Said authority falls within categories of Seventh Schedule – Person ineligible to act as arbitrator cannot nominate another arbitrator – Held, unilateral appointment invalid – Arbitrator lacked inherent jurisdiction – Award void and non est.
ARBITRATION – Section 12(5) r/w Seventh Schedule – Ineligibility – Scope
Paras 25, 26, 33, 40, 41
Ineligibility under Section 12(5) arises by operation of law – Covers persons having direct/indirect relationship with parties – Such ineligibility extends to power of nomination – Mandate of arbitrator automatically terminates – Held, arbitrator becomes de jure incapable of acting.
ARBITRATION – Equal treatment of parties – Article 14 – Effect on arbitration clause
Paras 21, 23, 43
Clause enabling one party to unilaterally appoint sole arbitrator gives rise to justifiable doubts as to independence and impartiality – Violates principle of equal treatment – Such clauses held violative of Article 14 – Held, arbitration clause unenforceable to that extent.
ARBITRATION – Waiver – Section 4 vs Section 12(5) – Distinction
Paras 36, 37, 41, 42
Waiver under Section 4 relates to procedural non-compliance – Ineligibility under Section 12(5) can be waived only by express agreement in writing after disputes arise – Absence of such agreement – Held, no waiver – Section 4 not applicable to cure statutory ineligibility.
ARBITRATION – Express waiver – Requirement of written agreement
Paras 25, 36, 42
Right to object to appointment of ineligible arbitrator cannot be waived by implication – Requires clear and unequivocal express agreement in writing – Held, proviso to Section 12(5) not satisfied – Appointment remains invalid.
ARBITRATION – Jurisdiction – Inherent lack – Stage of objection
Paras 27, 28, 12
Objection to inherent lack of jurisdiction can be raised at any stage – Even in collateral proceedings such as execution or revision – Arbitrator lacking jurisdiction cannot render valid award – Held, objection maintainable.
ARBITRATION – Execution proceedings – Validity of award
Paras 2, 4, 7, 43
Execution initiated based on arbitral award – Where award itself is void due to lack of jurisdiction – Execution proceedings including attachment orders unsustainable – Held, liable to be set aside.
ARBITRATION – SARFAESI and Arbitration – Concurrent remedies
Paras 6, 8
Proceedings under SARFAESI Act and arbitration can proceed simultaneously – Remedies are cumulative and not mutually exclusive – Issue not pressed in view of settled legal position.
CIVIL REVISION – Article 227 – Scope of interference
Paras 2, 13, 43
High Court in exercise of supervisory jurisdiction can interfere where subordinate court acts without jurisdiction – Revision maintainable to correct jurisdictional error – Held, interference justified.
