VIBHU BAKHRU, J.

1. STCI Finance Limited (hereafter ‘STCI’) has filed the present appeal under Section 37 of the Arbitration and Conciliation Act, 1996 (hereafter ‘the Act’) for setting aside the order dated 27.04.2016 (hereafter ‘the impugned order’)passed by the Sole Arbitrator, Justice R. C. Chopra (Retd.) under Section 16 of the Act. By the impugned order, the Arbitrator disposed of five applications filed by the respondents under Section 16 of the Act; he allowed the applications filed by respondent nos. 2 to 5 but rejected the one filed by respondent no.1, Sukhmani Technologies Private Limited (hereafter ‘STPL’)

2. The principal controversy involved in this petition is whether respondent nos 2 to 5 are bound by the arbitration clause in the “Facility Agreement” executed between STPL (through respondent no. 2) and STCI.

3. Before addressing the controversy, it is relevant to briefly narrate the background in which the applications filed by respondent nos. 2 to 5 under Section 16 of the Act came to be considered by the Arbitrator.

4. STCI (formerly known as Securities Trading Corporation of India Limited) is a Non-Banking Finance Company registered with the Reserve Bank of India. STPL is a private limited company, registered under the Companies Act, 1956, and engaged in trading of computers hardware and networking equipment. Respondent Nos. 2 and 3 are the Directors of STPL and respondent No. 4 is a sister concern of STPL. Respondent no. 5 is a Director of respondent no. 4. In the present appeal, no relief is being sought against respondent no. 5 and he has been arrayed only as a proforma respondent.

5. It is stated that in the month of January 2012, STPL approached STCI for granting a loan of Rs.50 crores. STCI vide Letter of Intent dated 08.02.2012 (hereafter ‘LOA’) agreed to sanction loan amount to the extent of Rs.50 crores against pledge of equity shares of Tulip Telecom Ltd (hereafter ‘Tulip’). An agreement captioned “Facility Agreement” was executed between STCI and STPL on 10.02.2012 setting out the terms for the grant of loan.

6. In order to secure the loan facility granted by STCI, STPL along with respondent nos. 2 and 4 executed a Share-Pledge Agreement dated 10.02.2012, pledging shares of Tulip held by them with STCI. In addition to the Share-Pledge Agreement, respondents also executed various other documents like irrevocable Demand Promissory Note, continuing Security Letter, Irrevocable Power of Attorney, Undertaking-cum-Indemnity, Declaration, etc. Respondent nos. 2 and 3 also executed the Deeds of Guarantee dated 10.02.2012 and 19.10.2012 guaranteeing the repayment of loan disbursed in favour of STPL.

7. Respondent Nos. 2 and 3 are the owners of Property bearing No. 5, Paschimi Marg, Vasant Vihar, New Delhi-110057 (hereafter ‘the Vasant Vihar property’). They offered the said property to STCI as collateral security and created a second mortgage on the said property, as the first charge was in favour of HDFC Ltd.

8. In view of certain defaults in the repayment of loan, STCI by a letter dated 19.05.2014 called upon STPL to clear its outstanding dues. Thereafter, on 01.08.2014, STCI declared the account of STPL as ‘Non-Performing Asset’ (NPA) and issued a legal notice dated 02.09.2014, stating that an amount of Rs.55,21,68,064/-was outstanding as on 01.09.2014. On 15.09.2014, STCI sent another legal notice invoking the guarantees. Vide the said legal notice, STCI once again called upon the respondents to clear the outstanding amount of Rs.55,21,68,064/-. It is claimed that despite the above notices, the respondents have failed to clear the outstanding dues. In view of the default in payments, STCI during the period of August 2012 to October 2012 invoked pledge of 1,01,50,000 shares, out of the 1,37,13,000 unencumbered equity shares pledged by respondent nos. 2 and 5.

9. STCI invoked the arbitration clause on 12.02.2016 and called upon the respondents to pay a sum of Rs.70,36,97,219.5/-. The Arbitrator vide or