The court reaffirmed that arbitration agreements are personal and must reflect established mutual intent, allowing for non-signatories to be bound depending on the factual context and the parties' relationship.

JUDGMENT :

(PER : HONOURABLE MR. JUSTICE A.Y. KOGJE)

1. This appeal has been preferred by the appellant under Section 14 of the Admiralty (Jurisdiction and Settlement of Maritime Claims) Act, 2017 for following reliefs:

“A. To set aside oral judgment dated 26.08.2025 passed by the Ld. Single Judge of this Hon’ble Court in Admiralty Suit NO.20 of 2022 with Civil Application No.1 of 2022 in Admiralty Suit No.20 of 2022.”

2. By the impugned judgment, the Single Judge has disposed of the Admiralty Suit by relegating the parties to the remedy of Arbitration while keeping all the contentions open and further directed that the amount of Rs.25,00,000/- deposited by the respondent No.2(defendant No.2) to be paid back to respondent No.2 with accrued interest.

3. The challenge is mainly on contentions that (1) the defendant No.2 was not party to the Arbitration Agreement as the Arbitration Agreement is exclusively between the appellant and respondent No.1 only, (2) that the respondent No.2 does not fall in definition of a person claiming through respondent No.1 as is required under Section 45 of Arbitration Act, (3) that the respondent no.2 has not even asserted for reference to the arbitration as issue No.5 decided by impugned judgment does not contemplate reference to arbitration as same issue was already decided, (4) having treated as an issue under Order 14 Rule 2 as an preliminary issue it was a mixed question of law and fact which required a trial, (5) lastly the impugned judgment is completely against the decision of the Apex Court in case of Cox and Kings Limited v/s. SAP India Private Limited and Another, reported in 2024 (4) SCC 1 : (2023 INSC 1051)

4. The facts in brief from the long drawn litigation across jurisdiction and relevant for our purpose are that the Appellant had undergone a Memorandum of Agreement (hereinafter referred to as, "MOA") dated 18.09.1998 with the Respondent No.1 (Original Defendant No.1) for the purchase of a vessel namely M. V. Irene for a total purchase price of USD 776,832.00. The Clause 18 of the said MOA stipulated that if any dispute arises in connection with the interpretation and fulfillment of the said MOA, the same shall be decided by arbitration.

4.1 Pursuant to the MOA, the High Court of Bombay had directed the arrest of the vessel in Admiralty Suit No.79 of 1998. The court would refer to this litigation at an appropriate stage.

4.2 The Appellant had preferred a Special Civil Suit No.36 of 1999 before the Ld. Civil Court at Bhavnagar against Mountain Shipping Limited i.e., the Respondent No.1 herein, seeking damages to the tune of Rs.1,20,00,000/- with an interest of 18%. The Appellant came to the know that an entity named and styled as, "Mountain Shipping Limited (C/o Symco Shipping Ltd.) bearing exactly same address as the Respondent No. 1 namely Anslem Shipping had undergone a MOU dated 28.12.1998 with a firm namely M/s Guru Ashish Shipbreakers. The Appellant preferred an application as per Order 1 Rule 10 read with Order 6 Rule 17 of the Civil Procedure Code, 1908 (hereinafter referred to as, "CPC") below Exh. 14 seeking to join Anslem Shipping (Respondent No.2 herein) as a party to the Special Civil Suit No.36 of 1999. The Special Civil Suit No.36 of 1999 came to be transferred to the Ld. Commercial Court at Rajkot and came to be numbered as the Commercial Civil Suit No.5 of 2018. The Judge of the Commercial Court at Rajkot vide order dated 30.10.2018 passed below Exh.1 transferred the said Commercial Civil Suit No.5 of 2018 to the High Court of Gujarat by determining that the dispute leading to the said suit falls within the definition of a 'Maritime Claim' as per Section 4(r) of the Admiralty Act. The Commercial Civil Suit No.5 of 2018 was transferred to the High Court of Gujarat and the same is the present proceedings being Admiralty Suit No.20 of 2022. This Court vide oral judgment dated 26.08.2025 passed by this Court in Admiralty Suit No.20 of 2022 with Civil Application No.1 of 2022 in