Madras High Court
Ambey Laboratories Ltd vs M/S. Kotak Mahindra Bank Limited on 9 September, 2021
Author: N. Sathish Kumar
Bench: N. Sathish Kumar
Arb O.P(COM.DIV.)No.143 of 2021
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Dated 09.09.2021
CORAM:
THE HONOURABLE MR.JUSTICE N. SATHISH KUMAR
Arb O.P(COM.DIV.)No.143 of 2021
and A.Nos.3202 and 3203 of 2021
1. Ambey Laboratories Ltd
(earlier known as Ambey Laboratories Pvt. Ltd.,)
Represented by Mr. Archit Gupta
SP 1-5, RIICO Industrial Area,
Sotanla, Behror, Alwar,
Rajasthan-301701.
2. Mr. Anil Gupta
3. Mr. Archit Gupta
4. Mr. Arpit Gupta
5. Mrs. Achla Gupta
6. Ambey Capital Pvt. Ltd., ..... Petitioners
Versus
1. M/s. Kotak Mahindra Bank Limited
rep by its Authorized Signatory
Having its Registered Office at
17BKC, C-27, G Block,
Bandra Kurla Complex,
Bandra Est Mumbai 400 051.
Also at: 402 L, Samson Towers Egmore
Chennai 600 008.
Page No:1/6
https://www.mhc.tn.gov.in/judis/
Arb O.P(COM.DIV.)No.143 of 2021
2. Ms. Deepa Vasumithran .... Respondents
PRAYER : Petition filed under Section 34(2)(a)(iii) and Section 34(2)(b)(ii)
r/w explanation (i),(ii) and (iii) and Section 34(2A) of Arbitration and
Conciliation Act, 1996, humbly praying this Hon'ble Court to Set aside the
Arbitration Award dated 17.06.2019 pertaining to Loan Agreement No.
LAP17514912 dated 01.07.2014 passed by the Learned Sole Sole Arbitrator in
respect of the claims awarded against these Petitioners.
For Petitioner : Ms. Hema Srinivasan
For Respondent : No appearance
ORDER
This original petition has been filed to set aside the Arbitration Award dated 17.06.2019 pertaining to Loan Agreement No. LAP17514912 dated 01.07.2014 passed by the Learned Sole Arbitrator in respect of the claims awarded against these Petitioners.
2. Heard the learned counsel for the petitioners and the learned counsel for the respondent.
3. The main contention of the learned counsel for the petitioners is that the notice of invocation has not been served and the learned Arbitrator has been unilaterally appointed. Further, the Arbitrator has not made any disclosure as Page No:2/6 https://www.mhc.tn.gov.in/judis/ Arb O.P(COM.DIV.)No.143 of 2021 mandated under law and proceedings of the arbitration also not been served on the petitioners. Moreover, learned Arbitrator was already in the panel of Arbitral Tribunal of the Bank and conducted many Arbitrations on behalf of the respondent Bank.
4. It is relevant to refer the judgment in the case of Kuppusamy Muniaiah and Ors. vs. Kotak Mahindra Bank Limited in the case in C.M.A.No.2770 of 2018 and C.M.P.No.21044 of 2018 and N.Puhalenthiran vs. M/s.Kotak Mahindra Bank Limited and Ors. in O.P.D.No.39573 of 2019.
5. The above judgments makes it clear that the learned Arbitrator has already conducted many Arbitrations on behalf of the respondent bank and the Judgment itself speaks about the fact that the learned Arbitrator was already nominated by the respondent/Bank in many other matters. Similarly, the letter produced by the petitioners to the learned Arbitrator is also available in the typed set which indicates the fact that the Arbitrator himself admitted that he was in the panel of Arbitrators of the Kotak Mahindra Bank. Page No:3/6 https://www.mhc.tn.gov.in/judis/ Arb O.P(COM.DIV.)No.143 of 2021
6. This Court has perused the entire materials available on record. The Memo filed by the learned Arbitrator before this Court also indicate that she was in the panel of Arbitrators of the Kotak Mahindra Bank and subsequently, withdrawn herself from the Panel on 23.02.2021. Therefore, without disclosing the mandatory disclosure as required under Section 12(5) of the Act, proceedings conducted by the Arbitrator is against the provision of very Arbitration and Conciliation Act itself.
7. Further, on perusal of the entire award, there is no records available to indicate notice has been served to the respondent as mandated under Section 24(2) of the Act. The very unilateral appointment of the Arbitrator which is against the consent of the petitioners is not a fair procedure, as per the judgment of PERKINS EASTMAN ARCHITECTS DPC & ANR Vs. HSCC (INDIA) LTD (2019 SCC ONLINE SC 1517). Hence, the entire proceeding has to be set aside.
8. In such view of the matter, the award passed by the learned Arbitrator based on the records produced by the respondent/claimant without giving an opportunity to the petitioners cannot be sustained in the eye of law. Page No:4/6 https://www.mhc.tn.gov.in/judis/ Arb O.P(COM.DIV.)No.143 of 2021 Accordingly the award passed by the learned Arbitrator is set aside. It is open to the respondent to initiate fresh Arbitration as per law.
9. In view of the above, this original petition is allowed. No costs. Consequently connected applications are closed.
09.09.2021 (2/5) msv Index:Yes/No Internet:Yes/No Speaking order:Non-speaking order Page No:5/6 https://www.mhc.tn.gov.in/judis/ Arb O.P(COM.DIV.)No.143 of 2021 N. SATHISH KUMAR, J.
msv Arb O.P(COM.DIV.) No. 143 of 2021 and A.Nos.3202 and 3203 of 2021 09.09.2021 Page No:6/6 https://www.mhc.tn.gov.in/judis/