Bombay High Court
MAGMA FINCROP LTD.versusHASMUKH MURJI AND COMPANY AND 2 ORS.
- Decided
- Disposal
- DISPOSED OFF
- Bench
- RAJESH S PATIL
Holding
The arbitral award is declared non‑existent in law, non‑executable and void ab initio due to the unilateral appointment of the arbitrator.
Summary
Magma Fincrop Ltd. filed Execution Application No. 42/2020 against Hasmukh Murji & Co. to enforce an arbitral award that was rendered after a unilateral appointment of the arbitrator. The applicant’s counsel sought leave to withdraw the execution proceedings and to commence fresh arbitration. The Court, relying on its earlier decision in L&T Finance Ltd. v. Sangeeta Bhansali and the Supreme Court’s ruling in Bhadra International (India) Pvt. Ltd. v. Airport Authority of India (Civil Appeal Nos. 37‑38 of 2026), held that an award can be set aside at the execution stage if the arbitrator’s appointment was unilateral. Accordingly, the Court declared the award non‑existent in law, non‑executable and void ab initio. The execution application was disposed of as withdrawn, interim applications were also dismissed, and the parties were permitted to initiate fresh arbitration with the limitation period excluded for the time elapsed.
Issues considered
- Whether an arbitral award can be set aside as void ab initio at the execution stage on the ground of unilateral appointment of the arbitrator.
- Whether the execution application should be withdrawn and the parties allowed to commence fresh arbitration proceedings.
- Effect of the withdrawal on the limitation period for initiating new arbitration.
Subjects
- Arbitration
- Arbitral award
- Void ab initio
- Unilateral appointment
- Execution of award
- Limitation period
- Fresh arbitration
Judgment
KVM
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17 - EXA 42 OF 2020.doc
Digitally signed
by KANCHAN
KANCHAN VINOD
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
VINOD MAYEKAR
MAYEKAR Date:
2026.03.25
11:20:58 +0530
ORDINARY ORIGINAL CIVIL JURISDICTION
EXECUTION APPLICATION NO. 42/2020
MAGMA FINCROP LTD. ….. APPLICANT
VS
HASMUKH MURJI AND COMPANY & ORS. ….. RESPONDENTS
ALONGWITH
INTERIM APPLICATION NO. 1164/2022
ALONGWITH
IN
EXECUTION APPLICATION NO. 42/2020
KOTAK MAHINDRA BANK LTD. ….. APPLICANT
IN THE MATTER BETWEEN
MAGMA FINCROP LTD. ….. APPLICANT
VS
HASMUKH MURJI AND COMPANY & ORS. ….. RESPONDENTS
Adv. Nikhil Rajani i/b. M/s. V. Deshpande & Co. for the Applicant.
CORAM : RAJESH S. PATIL, J.
DATE : 24 MARCH, 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.
KVM
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17 - EXA 42 OF 2020.doc
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
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 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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