Respondent's objections on arbitration procedure rejected; Court emphasizes adherence to arbitration commitments.
In a significant judgment delivered by the Bombay High Court on April 28, 2026, Justice Sandeep V. Marne appointed a sole arbitrator to resolve disputes between Fintree Finance Private Ltd. and Embifi Global Services Private Limited. The decision came in response to a Commercial Arbitration Application filed by Fintree Finance under Section 11 of the Arbitration and Conciliation Act, 1996, seeking the appointment of an arbitrator due to disagreements arising from a Master Service Agreement between the two parties.
The applicant, represented by Advocate Mr. C.M. Jadhav, argued that despite initial attempts to resolve the matter through agreed arbitration procedures, the respondent had deliberately created hurdles in constituting the Arbitral Tribunal. The respondent, Embifi Global Services, represented by Advocate Ms. Niharika Singh, contended that the applicant had prematurely invoked arbitration without adhering to the agreed procedural steps outlined in clause 21 of their agreement, which required a dispute notice followed by a 30-day waiting period before initiating arbitration.
Justice Marne observed that the respondent had initially nominated an arbitrator and agreed to arbitration but later raised objections, which the Court found to be an attempt to obstruct the arbitration process. The judgment noted that the respondent's conduct of agreeing to arbitration and nominating an arbitrator, followed by raising procedural objections, was unacceptable. This volte-face led the Court to reject the respondent's objections, emphasizing that procedural technicalities should not impede the arbitration process when both parties had initially shown willingness to arbitrate.
The Court appointed Ms. Priyanka Kothari, an Advocate practicing at the Bombay High Court, as the sole arbitrator to adjudicate the disputes. The judgment outlined specific directives for the conduct of arbitration proceedings, including the communication of the order to the appointed arbitrator, the submission of a statutory disclosure statement by the arbitrator, and the equal sharing of the arbitrator's fees by both parties according to the Bombay High Court (Fee Payable to Arbitrators) Rules, 2018.
Justice Marne's judgment underscores the importance of adhering to arbitration commitments and discourages tactics that aim to delay or disrupt the arbitration process. The judgment reinforces the Court's role in facilitating efficient dispute resolution through arbitration, ensuring that parties honor their initial agreement to arbitrate despite procedural disagreements.
Bottom line:-
Application under Section 11 of the Arbitration and Conciliation Act, 1996 for appointment of Arbitrator - Objection by Respondent for non-following of agreed arbitral procedure - Rejected as Respondent had already nominated an Arbitrator and agreed to arbitration earlier, but later attempted to create hurdles in constitution of Arbitral Tribunal.
Statutory provision(s): Arbitration and Conciliation Act, 1996 Sections 11, 11(6), 11(8), 12(1), 21
