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Bombay HC – Arbitral Award by Ineligible Arbitrator Cannot Be Enforced as Legal Decree

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The respondents – borrowers had initially raised an objection to the unilateral appointment of the Sole Arbitrator by the petitioner – lender.  The Arbitrator had rejected the said application vide order dated 23.7.2019. Similarly, the Arbitrator had also rejected section 13(2) application of the borrowers vide order dated 30.7.2019.

By the Award dated 7.8.2019, the borrowers were directed to pay Rs.1,01,12482/- to the claimant lender with other reliefs.

The borrowers did not challenge the said award.

However, in execution petition, the judgment debtors raised the objection to the unilateral appointment of the sole arbitrator as void ab initio.

HELD that a challenge to an arbitrator’s ineligibility could be raised at any stage because an award passed in such circumstances is non-est.

In arbitration, the parties vest the jurisdiction in the tribunal by virtue of a valid arbitration agreement and an appointment made in accordance with the provisions of the Act, 1996.

Therefore, the validity of the award can be challenged even in the execution petition, holding that the award as void ab initio cannot be enforced as legal decree and thus, it is not executable.

Judgment dated 17.1.2026 of the High Court of Bombay in Commercial Execution Application (L) No.5277 of 2022 with Interim Application No.1950 of 2022 of L & T Finance Ltd  Vs. Sangeeta Bhansali and another

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