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Tata Capital Limited vs. Baba Deep Singh Spare Center and Anr.

Arbitration Petition · 2026:DHC:7867Decided 9 Sept 2026New Delhi Bench
ARB.P. 1053/2026CNR: DLHC010281932026
Justice Om Prakash Shukla

Background

Tata Capital sought recovery of dues under an unsecured business loan agreement with a spare parts dealer, which contained a standard arbitration clause. Despite being duly served, the respondents did not appear in court to contest the petition.

Decision Breakdown

Finding a valid, prima facie arbitration agreement in the loan documents (Clause 10) and noting the respondents' continued absence, the Court appointed a sole arbitrator to resolve the dispute (claimed amount: Rs. 8,37,728.13), to be conducted under Delhi International Arbitration Centre rules, leaving all substantive defences open for the arbitrator to decide.

Lesson Learnt

If a borrower ignores loan-recovery arbitration proceedings altogether, the lender can still get an arbitrator appointed by court order based simply on a valid arbitration clause in the loan agreement: silence is not a defence.

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