Axis Bank itself conceded that awards by unilaterally appointed sole arbitrators are void. The Delhi High Court has now declared an award against a borrower unenforceable, noting that one bank-appointed arbitrator had handled 4,155 arbitrations over four to five years, and has asked the RBI to caution all banks on unilateral appointments.
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New Delhi: Declaring an arbitral award dated May 26, 2023 unenforceable against a borrower in a dispute with Axis Bank, the Delhi High Court has pointed out that a single arbitrator appointed by the bank had been assigned thousands of its recovery arbitrations, and has directed the Reserve Bank of India to caution banks against unilateral appointments of arbitrators [Shikha Ghosh v. Axis Bank Ltd. and Another].
The appeal in the commercial matter, in which the appellant had challenged the award, was heard by a Division Bench of Justice Prathiba M. Singh and Justice Dinesh Bhatt. The Court recorded that arbitrator Vikrant Bhardwaj had handled 4,155 arbitrations for the bank in four to five years.
What the bank told the Court
Senior Advocate Dayan Krishnan, appearing for Axis Bank, conceded that awards passed by unilaterally appointed sole arbitrators are void in light of the Supreme Court’s precedents. The bank also told the Court that it has discontinued unilateral appointments since 2023. These are the bank’s statements to the Court; the Court has not made any finding of wrongdoing beyond what is recorded in its order.
Thousands of appointments, one arbitrator
The Bench looked at how one arbitrator came to be appointed in such large numbers by a single party to the disputes. Appointments of this kind, made without proper declarations, raise a justifiable doubt about the independence and impartiality of the tribunal, it noted.
“Arbitrators who were appointed in thousands of matters like this without filing proper declarations cannot be said to be independent and impartial arbitrators.”
Repeated appointment of the same arbitrators in thousands of cases, the Court added, goes to the core of neutrality, a foundational requirement of arbitration.
“Repeated appointments of the same arbitrators in thousands of cases goes against the core of Neutrality.”
The directions
- The award dated May 26, 2023 is declared unenforceable against the appellant.
- Axis Bank must file a fresh affidavit by November 16, 2026 explaining how thousands of cases came to be assigned to a single arbitrator and setting out its future recovery strategy.
- The RBI, which appeared as an intervener through Senior Advocate Ramesh Babu, is to caution all banks so that remedial measures on unilateral appointments can be considered by other banks and financial institutions.
- The appellant is left free to pursue such further remedies as are available in law.
- The matter is listed on November 17, 2026.
Why the order matters
The order applies the settled principle that a party cannot unilaterally appoint the sole arbitrator in its own dispute, and shows the Court looking at the pattern of appointments, not merely a single award, to test independence and impartiality.
By asking the RBI to caution all banks and by calling on Axis Bank to explain how the situation arose, the Bench has extended the inquiry beyond the individual appellant to the wider practice of institutional recovery arbitrations. The Court’s observations are on the process of appointment, and the bank’s explanation is yet to be placed before it.
Case Title: Shikha Ghosh v. Axis Bank Ltd. and Another [FAO (COMM) 91/2025]
Bench: Justice Prathiba M. Singh and Justice Dinesh Bhatt, Delhi High Court
Date of Order: September 30, 2026
Appearances: Vishal Gupta, Ratneswar Das, Barnali Deka Das and Swati Singh (for the appellant); Senior Advocate Dayan Krishnan and Sanjay Kumar (for Axis Bank); Senior Advocate Ramesh Babu and Manisha Singh (for the RBI)