SHRIRAM CITY UNION FINANCE LIMITED, Vs. SIVA

JUDGEMENT

(1.) This Arbitration Original Petition has been filed under Sec. 11(5) of the Arbitration and Conciliation Act, 1996, (hereinafter called as "the Act") to appoint an Arbitrator to adjudicate the disputes between the petitioner and the respondent in terms of the Arbitration agreement dtd. 19/1/2013 and to direct the respondent to pay costs.

(2.) The learned counsel for the petitioner would submit that the petitioner had lent money by virtue of the loan agreement dtd. 19/1/2013 for a sum of Rs.15,00,000.00 with interest at the rate of 28.44% per annum to the respondent. Apart from the loan agreement, the respondent had also executed a Demand Promissory Note dtd. 19/1/2013 to the petitioner. However, the respondents had failed to return the said amount as agreed by him in terms of the loan agreement. Hence, the petitioner invoked Clause 17 of the said loan agreement and referred the dispute to the arbitration. The Clause 17 of the said loan agreement reads as follows:

(3.) After initiating the arbitration proceedings in ACP.No.101 of 2014, the award was passed by the learned Arbitrator on 29/12/2014. The same was challenged by the respondents herein in O.P.No.53 of 2022 before this Court. The said award was set aside by this Court vide order dtd. 8/9/2021 granting liberty to the petitioner to initiate a fresh arbitration proceedings. Accordingly, the petitioner had issued a notice to the respondents under Sec. 21 of the Act on 11/4/2022 appointed a sole Arbitrator and a claim statement was also filed before him on 10/5/2022. The learned Arbitrator had also issued a notice to the respondents with regard to the hearing on 13/5/2022. The first respondent filed a memo before the learned Arbitrator on 27/5/2022 stating that since the appointment of Arbitrator was made unilaterally, the said appointment is non-est in law and the same is against the law laid down by the Hon'ble Apex Court in Perkins Eastman Architects DPC Vs. HSCC (India) Ltd., reported in 2019 SCC OnLine SC 1517.