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Institutional Arbitrator Appointment by MCCI is Independent, Not Unilateral

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Judgment dated 24.4.2026 of the High Court of Rajasthan, Bench at Jaipur, in S.B. Civil Writ Petition No.17398/2024 of M/s.  Sundaram Finance Limited   Vs.  Hanuman Prasad Bhanwarlal and another

The respondents – borrowers had taken vehicle loan from the petitioner. 

Clause 22 of the Loan Agreement provided for arbitration nominated by the Madras Chamber of Commerce and Industries, Chennai.

However, on account of default, the petitioner invoked arbitration and approached MCCI for appointment of arbitrator as per the arbitration clause in the loan agreement.

The sole Arbitrator appointed by MCCI passed the award on 13.4.2023.  However, the Executing Court dismissed the petition for execution of the award on the ground of unilateral appointment of Arbitrator.

Testing on the anvil of credibility of Madras Chambers of Commerce & Industry established in 1836, it was HELD that it is recognized not only by the International Council of Commercial Arbitrations but also by the GoI and therefore, per se it cannot be said to be as unilateral appointment of an Arbitrator.

HELD that in this case, the appointment of Arbitrator was made by the recognized independent institution MCCI and not by the petitioner.   Such an appointment cannot be said to be unilateral because one of the parties initiated the process.

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