The main legal point established in the judgment is the limitation of enforcing an arbitral award against a non-party, emphasizing the principles of consent in arbitration and the importance of transparency in third-party funding to ensure access to justice.

JUDGMENT

Vibhu Bakhru, J.

Introduction

1. The appellant, Tomorrow Sales Agency Private Limited (hereafter `TSA') has filed the present intra-court appeal under Section 37 of the Arbitration and Conciliation Act, 1996 (hereafter `the A&C Act') impugning an order dated 07.03.2023 (hereafter `the impugned order') passed by the learned Single Judge in a petition filed by respondent no.1, SBS Holdings Inc. (hereafter `SBS') under Section 9 of the A&C Act being OMP(I)(COMM) 71/2023 captioned `SBS Holding Inc. v. Anant Kumar Choudhary & Others.'

2. SBS had filed the aforesaid petition, inter alia, praying that TSA and respondent nos. 2 to 4 be directed to disclose details of their assets and bank accounts and further furnish a security for a sum of SGD 12,12,838.98 (Singapore Dollars twelve lacs twelve thousand eight hundred and thirty eight and ninety eight cents), USD 2,46,196.96 (United States Dollars two lacs forty six thousand one hundred and ninety six and ninety six cents) and JPY 11,02,612 (Japanese Yen eleven lacs two thousand six hundred and twelve) aggregating to an amount of Rs.9,62,08,119/- (Indian Rupees nine crore sixty two lacs eight thousand and one hundred nineteen) as on 10.02.2023 along with interest. In addition, SBS sought an order restraining TSA and respondent nos. 2 to 4 from creating any third-party interest/right/title in respect of unencumbered movable or immovable assets.

3. SBS sought the aforementioned interim measures to secure the amount awarded to SBS in terms of an arbitral award dated 22.12.2022 (hereafter `the Arbitral Award') delivered by an arbitral tribunal pursuant to arbitral proceedings conducted under the rules and aegis of the Singapore International Arbitration Centre (hereafter `the SIAC').

4. Respondent nos. 2 to 5 (hereafter also referred to as `the Claimants') had instituted the arbitral proceedings that culminated in the Arbitral Award. Respondent nos. 2 to 4 are individuals and are promoters of Respondent no. 5, SBS Transpole Logistics Private Limited (hereafter `Transpole')

5. SBS has prevailed in securing interim measures in terms of the impugned order. By the impugned order, TSA and respondent nos. 2 to 4 have been directed to disclose on affidavit their fixed assets and bank accounts along with credit balance held by them in India or any other jurisdiction. Further, they have been restrained from creating any third- party interest/right/title in respect of any of their unencumbered immovable assets to the extent of the sum awarded in favour of SBS in terms of the Arbitral Award.

6. TSA was not a party to the arbitral proceedings. TSA had funded the Claimants to pursue the arbitral proceedings but was not a party either to the arbitration agreement or the arbitral proceedings. More importantly, TSA is not a party to the Arbitral Award. It is not directed against TSA and the amount awarded in favour of SBS is not against TSA. TSA, thus, claims that it is not liable to pay any amount to SBS and the impugned order directing it to disclose its assets and restraining it from transferring or alienating any assets, is flawed.

7. According to SBS, TSA is liable to pay the amount awarded. SBS claims that the amount awarded in its favour is in respect of the costs incurred by it in defending the arbitral proceedings instituted by the Claimants. SBS contends that since the arbitral proceedings were instituted with the support of the funds provided by TSA, TSA is also liable to pay the amount awarded notwithstanding that it was not a party to the arbitral proceedings. In addition, it claims that TSA had full control of the arbitral action and had funded it to derive benefits of the Arbitral Award if the Claimants were successful in their claims.

Factual Context

8. TSA is incorporated under the Companies Act, 1956. It is a non- banking financial company (NBFC) within the meaning of Section 45- 1(f) of the Reserve Bank of India Act, 1934 and is registered with the Reserve Bank of India.

9.