Madras HC: Deceased Father's Involvement Invalidates Part of Arbitration Decision

Summary: The Madras High Court upheld the decision made by the arbitrator against Thomas Varghese, dismissing his request to cancel it. The decision was about a vehicle loan dispute with Sundaram Finance Ltd.

Background of the Case

Thomas Varghese, from Pathanamthitta, took a vehicle loan from Sundaram Finance Ltd in Chennai on July 31, 2019. The loan amount was ₹20,15,000, to be repaid in 42 monthly installments. Unfortunately, he fell behind on payments, leading to legal action.

Arbitration Award Details

The arbitrator's decision, dated April 13, 2023, required Thomas and his father, K.G. Varghese, to pay ₹15,76,575.52 plus interest. Thomas challenged this decision for several reasons, including:

• One-sided Arbitrator Appointment: Thomas argued the arbitrator was chosen without both sides agreeing.
• Decision Involving a Deceased Person: K.G. Varghese, Thomas's father, had passed away on January 26, 2023.
• Lack of Chance to Participate: Thomas claimed he wasn't given a fair chance to argue against the arbitration.

Court's Findings

Judge N. Anand Venkatesh looked into the case and made the following conclusions:

• Arbitrator's Appointment: The arbitrator was chosen by the Madras Chamber of Commerce and Industries (MCCI), not just by Sundaram Finance. The court found this choice acceptable and not against any rules.

"The appointment of an Arbitrator by MCCI cannot be seen as one-sided."

• Decision Involving a Deceased Person: The court recognized that the decision involving K.G. Varghese was invalid because he had passed away. However, it remains valid against Thomas, the main borrower.

"The decision made on 13.04.2023 regarding the petitioner’s father is invalid."

• Chance to Participate: Notices were sent multiple times, but Thomas did not take part. Therefore, the court rejected claims of unfair treatment.

"The petitioner is responsible for not having participated in the proceedings."

Verdict Summary

The court dismissed Thomas Varghese's request, requiring him to pay ₹25,000 to Sundaram Finance. This case highlights the importance of responding to legal notices and the validity of institutional arbitration appointments.