Quick Summary: The Madras High Court canceled an arbitration decision because TATA Capital Limited picked an arbitrator by themselves, without agreement from the other party, following a previous court decision. The parties are encouraged to settle their disagreement peacefully.
On December 8, 2025, the Madras High Court, led by Judge N. Anand Venkatesh, looked into a complaint filed by Khadbhai Mohammed Faiyaz against TATA Capital Limited. The case was about an arbitration decision made on August 20, 2024, which Khadbhai Mohammed Faiyaz wanted to cancel.
The complaint was filed under Section 34 of the Arbitration and Conciliation Act, 1996. Khadbhai Mohammed Faiyaz's main argument was that TATA Capital Limited chose the arbitrator on their own. This action went against a Supreme Court decision in the case of Perkins Eastman Architects DPC vs. HSCC (India) Ltd. The court had already paused the decision temporarily on November 17, 2025.
"The one-sided choice of an Arbitrator by TATA Capital Limited goes against the decision of the highest court," stated the court.
Judge Venkatesh concluded that the decision was not valid because the process of choosing the arbitrator was not done properly. The lawyers for both sides agreed to choose a new arbitrator to solve the disagreement. As a result, the court canceled the previous decision.
The court noted that the disagreement involved an amount less than Rs. 5 lakhs. Instead of dragging out the legal process, Judge Venkatesh suggested that the parties settle the matter peacefully.
"It would be better for Khadbhai Mohammed Faiyaz and TATA Capital Limited to settle their disagreements peacefully between themselves," the judge advised.
The case is scheduled to be looked at again on December 15, 2025, under the heading “for reporting compliance,” giving Khadbhai Mohammed Faiyaz and TATA Capital Limited time to possibly reach an agreement.
This judgment shows how important it is to follow existing court decisions in arbitration cases and encourages solving disputes outside of court when possible.
