Arbitral Award of Arbitrator unilaterally appointed is nullity even if the respondents did not appear and even if no objection is taken by the respondents

By the order dated 6.5.2023 the Commercial Court rejected the applicant’s application for enforcement of ex parte arbitral award dated 10.11.2021 of the Arbitrator appointed unilaterally without concurrence of the respondents. It was found that the sole Arbitrator was not eligible to act as Arbitrator by virtue of Section 12(5) of the Act.

The appellant challenged the said order of the Commercial Court in the High Court of Delhi. 

Following the decision dated 17.5.2023 of the Supreme Court in Kotak Mahindra Bank Ltd case, the appeal was dismissed.

HELD that there is no merit in the contention of the appellant that the respondents had not appeared before the Commercial Court and set up the objection to the arbitral award and therefore, the Commercial Court could not reject the application on the ground that the arbitral award was passed by an arbitrator unilaterally appointed by the appellant.

Judgment dated 16.1.2024 of the Division Bench  in EFA (Comm) 5/2023 of Mercedes Benz Financial Services India Pvt Ltd Vs. M/s. Kokher Enterprises