Unilateral Arbitrator Appointment Can't Be Ground To Suo Motu Reject Award Execution: Madras High Court

The Madras High Court on 31 August held that an Executing Court cannot suo motu refuse to enforce an arbitral award on the ground that the arbitrator was unilaterally appointed when the award-debtors have neither challenged the award under Section 34 of the Arbitration and Conciliation Act, 1996 nor contested its execution.

Justice P.B. Balaji allowed two civil revision petitions filed by Sundaram Finance Limited against the award-debtors, set aside the orders refusing execution and directed the Executing Courts to enforce the arbitral awards “as it stands”. The Bench observed:

“Admittedly, in the present cases, the award sufferers have neither challenged the awards in a manner known to law, by filing a Section 34 application under the Arbitration and Conciliation Act, 1996, nor even come forward to contest the execution petitions as well. In the absence of any such challenge on the side of the award sufferers, the Executing Court cannot suo motu exercise a right to dismiss the execution petitions, on finding that the appointment of the Arbitrator was unilateral.”

Sundaram Finance had obtained arbitral awards against A. Arun Kumar and Ayyasamy in one proceeding, and S. Maheswari and N. Selvakumar in another. It subsequently approached the courts in Coimbatore to execute the awards.

On 30 January 2026, the II Additional Subordinate Judge, Coimbatore, suo motu dismissed one execution petition after finding that the arbitrator had been appointed unilaterally.

The Commercial Court (Senior Civil Judge Cadre), Coimbatore, similarly dismissed the other execution petition on 21 April 2026 on the ground of unilateral appointment. Sundaram Finance challenged the orders before the Madras High Court through two civil revision petitions under Section 115 of the Code of Civil Procedure, 1908.

It contended that the Executing Courts could not suo motu dismiss the execution petitions when the awards had neither been challenged under Section 34 of the Arbitration Act nor had their execution been contested by the award-debtors.

The High Court noted that it had dealt with similar circumstances in Sundaram Finance Limited v. S.M. Thangaraj on 27 January 2025. In that case, it held that an Executing Court cannot suo motu dismiss an execution petition and that an award-holder is entitled to execute the arbitral award.

It also noted that despite specific directions issued in the earlier revision petition, one of the present execution petitions had been dismissed by the same court. The earlier order had directed the Executing Court to decide the execution proceedings on merits and specifically restrained it from exercising suo motu power to dismiss them.

Justice Balaji reiterated that the award-debtors had not appeared to contest the execution proceedings. It held that in the absence of any challenge to the executability of the awards, the Executing Courts ought not to have independently raised the issue of unilateral appointment and dismissed Sundaram Finance's petitions.

Accordingly, the High Court allowed both revision petitions and set aside the orders dated 30 January and 21 April 2026. Holding that the “Executing Court is bound to execute the awards as it stands”, it directed the Registry to circulate the order to all courts handling execution of arbitral awards, so that execution petitions are not similarly dismissed suo motu on the ground of unilateral appointment of an arbitrator.

No costs were imposed.

Appearances for petitioner (Sundaram Finance Limited): Advocate M. Arunachalam.