A non-signatory to an arbitration agreement cannot remain present in the arbitration proceedings as they are not bound by the award, ensuring compliance with the jurisdictional limits set by the Arbitration and Conciliation Act, 1996.

JUDGMENT :

ATUL S. CHANDURKAR, J.

1. Leave granted.

2. Two questions arise for consideration in these appeals namely,

(a) Whether it is permissible for a non-signatory to an agreement leading to arbitration proceedings to remain present in such arbitration proceedings?

(b) After appointment of an arbitrator under Section 11 (6) of the Arbitration and Conciliation Act, 1996, whether it is permissible for the Court in such disposed of proceedings to issue any further ancillary directions concerning the arbitration proceedings that have commenced pursuant to appointment of the arbitrator?

3. Facts relevant for considering the aforesaid questions are that on 20.06.2015, an oral family settlement was entered into between members of the Gupta family, namely Pawan Gupta and Kamal Gupta (hereinafter referred to as ‘PG’ and ‘KG’). The said oral agreement was said to be reduced in a Memorandum of Understanding /Family Settlement Deed (hereinafter referred to as ‘the MoU/FSD’) dated 09.07.2019. This MoU/FSD was not signed by Rahul Gupta, son of KG (hereinafter referred to as ‘RG’). Proceedings under Section 11 (6) of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as ‘the Act’) were filed by PG and another against KG and others seeking appointment of a sole arbitrator for adjudicating disputes between the parties under the MoU/FSD. In the proceedings filed under Section 11 (6) of the Act, an application for intervention being I.A. No.13282 of 2023 was filed by RG, a non- signatory, seeking permission to intervene in the said proceedings so as to oppose the maintainability of the same. PG and one other also filed a petition under Section 9 of the Act seeking interim measures on the basis of the MoU/FSD dated 09.07.2019. A similar application for intervention was filed by RG and one other in these proceedings being I.A. No.12227 of 2023. By the order dated 22.03.2024, Arbitration Petition No.1010 of 2022 seeking appointment of an arbitrator as well as OMP(I) (COMM) No.198 of 2023 being the petition filed under Section 9 of the Act praying for interim measures came to be decided. A sole arbitrator came to be appointed to adjudicate the disputes between the parties. The petition filed under Section 9 of the Act was directed to be treated as an application under Section 17 of the Act for being decided by the sole arbitrator. As regards the prayer for permission to intervene in the proceedings was concerned, the same was not granted by the learned Judge principally on the ground that such intervention was sought by RG, a non-signatory to the MoU/FSD. Arbitration Petition No.1010 of 2022 as well as OMP(I) (COMM) No. 198 of 2023 came to be disposed of accordingly.

4. On 05.08.2024, two non-signatory companies through RG, their authorized representative filed I.A. No. 37567 of 2024 in the disposed of Section 11 (6) proceedings making the following prayers:

“It is humbly prayed before this Hon’ble Court:

1. Allow this present application of the Intervenor to permit the intervenor in the arbitration proceedings or to be present in the Arbitration Proceedings.

2. Revive the intervention application of the Intervenor as concession given by the parties in the arbitration is being violated by themselves

3. Direct the Arbitrator to let the intervenor to have the access of all pleadings before the Ld. Arbitrator, the orders passed by the Ld. Arbitrator in the present arbitration proceedings and also of the arbitration aw