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Bombay High Court

AU SMALL FINANCE BANK LTD.versusPUSHPA TOURS AND TRAVELS AND ANR.

Decided
Disposal
DISPOSED OFF

Holding

An arbitral award arising from a unilateral appointment of an arbitrator is void ab initio and non-executable even at the execution stage, and the execution application may be withdrawn with liberty to initiate fresh arbitration, excluding the period from invocation of arbitration till date for limitation.

Summary

AU Small Finance Bank Ltd. filed an execution application before the Bombay High Court to execute an arbitral award against Pushpa Tours and Travels and another. The arbitral award arose from arbitration where the arbitrator's appointment was unilateral. The applicant's counsel sought leave to withdraw the execution application with liberty to initiate fresh arbitration proceedings. The Court noted its earlier view in L & T Finance Ltd. vs. Sangeeta Bhansali and the Supreme Court's recent judgment in Bhadra International (India) Pvt. Ltd. vs. Airport Authority of India, holding that even at the execution stage an arbitral award can be set aside as void ab initio if the arbitrator's appointment was unilateral. The Court granted leave and liberty, declared the arbitral award dated 28 September 2020 as non-est in law, non-executable and void ab initio, and disposed of the execution application as withdrawn. The Court also disposed of interim applications and permitted the parties to initiate fresh arbitration, excluding the period from invocation of arbitration till date for limitation purposes.

Issues considered

  • Whether an arbitral award can be declared void ab initio and non-executable at the execution stage on the ground that the arbitrator's appointment was unilateral?
  • Whether the execution application can be permitted to be withdrawn with liberty to initiate fresh arbitration proceedings?
  • Whether the period from the invocation of arbitration till the date of the order should be excluded for the purpose of initiating fresh arbitration proceedings?

Subjects

  • Arbitration
  • Execution Proceedings
  • Unilateral Appointment of Arbitrator
  • Void Ab Initio
  • Non-Executable Award
  • Limitation Exclusion
  • Fresh Arbitration
  • Bombay High Court

Judgment

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          Digitally signed
          by KANCHAN
KANCHAN VINOD
VINOD
        MAYEKAR
                                            IN THE HIGH COURT OF JUDICATURE AT BOMBAY
        Date:
MAYEKAR 2026.01.28
          12:29:16
          +0530
                                               ORDINARY ORIGINAL CIVIL JURISDICTION

                                                  EXECUTION APPLICATION NO. 1837/2022

                             AU SMALL FINANCE BANK LTD.                           ….. APPLICANT
                                       VS
                             PUSHPA TOURS AND TRAVELS AND ANR.                    ….. RESPONDENTS

                             Adv. Padmakar Garad i/b. Legal & Associates for the Applicant.

                                                                CORAM : RAJESH S. PATIL, J.

                                                                DATE    : 23 JANUARY, 2026

                             P.C. :-

                             1)               Learned counsel appearing for the claimant submits that

                             the execution proceedings arise out of an Arbitral Award, where the

                             Arbitrator’s appointment was unilateral. Hence, he on instructions of

                             his client seeks leave to withdraw the present execution application,

                             with liberty to initiate fresh arbitration proceedings.

                             2)               I have taken a view in the judgment of L & T Finance Ltd.

                             vs. Sangeeta Bhansali & Anr. in Commercial Execution Application (L)

                             No. 5277 of 2022, considering the latest judgment of the Supreme

                             Court decided on 5 January, 2026, in the matter of Bhadra

                             International (India) Pvt. Ltd. and others vs. Airport Authority of

                             India, Civil Appeal No. 37-38 of 2026, wherein it has been held that

                             even at the stage of execution, an arbitral award can be set aside
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being void-ab-initio on the grounds that the appointment of the

arbitrator was unilateral.

3)             Leave and liberty as prayed for, is granted.

3.1)           The Arbitral Award dated 28 September, 2020 which is

subject matter of the present proceedings is hereby declared to be

non-est in law, non-executable and void-ab-initio.

4)             Execution Application stands disposed of as withdrawn.

5)             In sequel, the Interim Applications, if any, also stand

disposed of.

6)             It shall be open for the parties to initiate fresh arbitration

proceedings in accordance with law.

7)             As far as limitation is concerned, the period from the

invocation of the arbitration till today shall stand excluded for the

purpose of initiating fresh arbitration proceedings.



                                                  (RAJESH S. PATIL, J.)


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