Delhi High Court Voids Arbitral Award, Questions Axis Bank's Use of Same Arbitrator in 4,155 Cases
A Delhi High Court Division Bench comprising Justices Pratibha M. Singh and Dinesh Bhatt declared an arbitral award unenforceable against a borrower, finding that Axis Bank's practice of unilaterally appointing the same arbitrator across multiple cases breaches the neutrality requirements of the Arbitration and Conciliation Act, 1996.
The bench observed that the repeated appointment of a single arbitrator by one party in numerous disputes strikes at the essence of impartiality mandated under the Act, rendering such awards void ab initio. During proceedings, the bank disclosed that the same arbitrator had been appointed in 4,155 cases—a revelation that influenced the Court's decision.
The dispute originated in January 2019 when Axis Bank disbursed a loan to the appellant. The bank initiated arbitration proceedings claiming default. The sole arbitrator accepted the reference in February 2023 and proceeded ex parte after the appellant contested receiving notice. An award was passed in May 2023. The appellant later challenged it, citing lack of knowledge of the proceedings. The Court directed both Axis Bank and the RBI to file fresh affidavits in response.
