IMPORTANT POINT
A non-party to arbitration cannot have their property attached under an order issued by the Arbitrator, as such an order exceeds the jurisdiction of the Arbitrator and does not comply with the procedural requirements of the Code of Civil Procedure.

JUDGMENT :

THE HONOURABLE MR.JUSTICE C. JAYACHANDRAN

Petitioner approached this Court challenging Ext.P2 order of attachment passed by the Arbitrator, essentially on the premise that, the petitioner is not a party to the arbitration, wherefore, his property cannot be attached by virtue of an order like Ext.P2. Petitioner seeks to quash Ext.P2 and also a further direction to the Sub-Registrar and the Village Officer, to remove the entries with respect to the above referred attachment, vide Ext.P2 order.

2. Heard the learned counsel for the petitioner, learned counsel for the 3rd respondent and learned Government Pleader on behalf of the respondents 1 and 2. Though, notice was issued to respondents 4 and 5, they have chosen not to enter appearance.

3. Learned counsel for the petitioner submits that, inasmuch as the petitioner is not a party to the arbitral proceedings, his property is not liable to be attached. Secondly, it was pointed out that, the provisions of Order XXXVIII Rule 5 of the Code of Civil Procedure, cannot be imported to the instant facts, since the subject property was not 'owned' by the respondent in the arbitral proceedings, as on the date of attachment. Instead, the petitioner was the owner of the property as on that date, wherefore, the requirements of Order XXXVIII Rule 5, is not satisfied. Learned counsel would submit that, consent, either express or implied, is pivotal to confer jurisdiction to the Arbitrator, which is conspicuously absent in the instant case. A decision of the Hon'ble Supreme Court in State Bank of India v. Ericsson India Private limited and Others [2018 (16) SCC 617], is relied upon by the learned counsel for petitioner as one rendered on identical facts.

4. Per contra, learned counsel for the 3rd respondent would submit that, based on the judgment of the Hon'ble Supreme Court in Cox and Kings Ltd. v. SAP India Private Ltd. and another [2023 SCC OnLine SC 1634], arbitration proceedings can be initiated against a person, who is not a signatory to the agreement, on the principle of constructive/implied consent. Learned counsel invited the attention of this Court to paragraph no.224, wherein, the doctrine of Group of Companies was adopted to hold that a non-signatory affiliate or a sister or parent company can be a party to an arbitration agreement, if there is mutual intention of the signatories and non- signatories to this effect. It was emphasized that, non-signatory's causal connection with the negotiation and execution of the contract is a factor to determine the mutual intent to arbitrate. Relying upon paragraph no.225 of Cox and Kings (supra), it was pointed out that, the expression “claiming through or under” employed in Section 8 and 45 are concerned with the instances of succession and derivative rights. It is the specific contention of the learned counsel for the rd respondent that, the petitioner claims title through the party respondent in the arbitration proceedings and therefore, the impugned Ext.P2 order can be sustained by importing the principles discussed in paragraph no.225 of Cox and Kings Ltd.(supra). The learned counsel then invited the attention of this Court to paragraph No.159 of the said judgment, to ascertain whether the non- signatory is a veritable party to the arbitration agreement. Finally, it was pointed out that, interference under Article 226 of the Constitution is not possible against Ext.P2 order, as it may derail the entire arbitral process, as held by the Hon'ble Supreme Court in Deep Industries Limited v. Oil and Natural Gas Corporation and another [2020 15 SCC 706]. It is the specific contention urged by the learned counsel for the 3rd respondent that, the petitioner has a statutory remedy under Section 37 of the Arbitration Conciliation Act, which should necessarily be exhausted, instead of approaching this Court under Article 226 of the Constitution. On facts, it was pointed out that, the property attached was purchased by the petitioner only after iss