In the Shipra Mall dispute, the Delhi High Court has set aside the arbitrator’s order against Indiabulls Housing.

The Delhi High Court set aside its order quashing Indiabulls Housing Finance’s sale notices issued to enforce its security interest in Shipra Mall in Ghaziabad on Tuesday, citing an arbitrator for exceeding its remit.

“Because a secured creditor has a specific right to enforce a security interest by issuing a sale notice under Section 13 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (Sarfaesi Act), that specific right cannot be ousted ban order made by an arbitral tribunal,” said a single judge bench led by Justice Anup J Bhambhani.

In June last year, the arbitrator overturned Indiabulls’ four sale notices issued under the SARFAESI Act and Security Interest (Enforcement) Rules, 2002 after Shipra Estate, Shipra Hotels, and Shipra Leasing approached it, seeking to maintain the status quo in relation to the securities provided by them against the loan obtained from the non-banking finance company.

The High Court of Delhi has now ruled that the exercise of a protected creditor’s right to enforce a security interest under the Sarfaesi Act is not arbitrable at all, and the arbitrator has no discretion to exercise.