An application for impleadment in arbitration proceedings does not qualify as an interim measure under Section 17 of the Arbitration Act, making any appeal against its dismissal not maintainable.

JUDGMENT : 

S.SOUNTHAR, J.

This application has been filed challenging the order passed by the Sole Arbitrator in I.A.No.1 of 2025 in Arbitration O.P.Nos.147 and 148 of 2021.

2. The respondents 1 and 2 filed Arbitration claim petition against the appellant in Arbitration O.P.Nos147 and 148 of 2021, seeking recovery of money under a contract for supply of VRF and HVAC Systems Materials to appellant. It was the case of the appellant that it placed purchase order with respondents for supply of those materials for executing project of Hindustan Aeronautics Limited. It is stated that the respondent delivered the materials to the Hindustan Aeronautics Limited site directly. The Hindustan Aeronautics Limited complained that the quality of the material supplied was not in accordance with the contract and therefore, the appellant was forced to terminate the contract with the respondents. While the materials were still available in the site of Hindustan Aeronautics Limited, the respondents initiated arbitration claim seeking payment from the appellant. In these circumstances, the appellant filed the above said interlocutory application seeking impleadment of Hindustan Aeronautics Limited as a party respondent in Arbitration Original Petition. Claiming that the said Interlocutory Application was dismissed by the Arbitrator vide his minutes dated 04.01.2025, this appeal has been filed.

3. When the appeal came up for hearing, this Court raised a preliminary objection as to the maintainability of the appeal and the learned counsel for the appellant was heard on the maintainability.

4. This appeal has been preferred under Section 37 of the Arbitration and Conciliation Act, 1996 (hereinafter referred as 'Arbitration Act') treating the order passed in I.A.No.1 of 2025 as refusal of interim measure. Therefore, the main question to be decided is whether a petition for impleadment filed by the appellant herein can be treated as a petition seeking interim measure within the meaning of Section 17 of Arbitration Act and thereby, the appellant is entitled to invoke Section 37(2) of Arbitration Act to maintain the present appeal.

5. Section 37 of Arbitration Act reads as follows:

“37. Appealable orders:

(1)[Notwithstanding anything contained in any other law for the time being in force, an appeal] shall lie from the following orders (and from no others) to the Court authorised by law to hear appeals from original decrees of the Court passing the order, namely:--

(a) refusing to refer the parties to arbitration under section 8;

(b) granting or refusing to grant any measure under section 9;

(c) setting aside or refusing to set aside an arbitral award under section 34.]

(2) Appeal shall also lie to a court from an order of the arbitral tribunal--

(a) accepting the plea referred to in sub-section (2) or sub-section (3) of section 16; or

(b) granting or refusing to grant an interim measure under section 17.

(3) No second appeal shall lie from an order passed in appeal under this section, but nothing in this section shall affect or take away any right to appeal to the Supreme Court.”

6. Therefore, an appeal shall lie to this Court from order passed by the Arbitral Tribunal in cases covered under Clauses (a) and (b) of Section 37 (2) of Arbitration Act. Section 37(2) Clause (a) refers to acceptance of plea referred to in sub Sections (2) or (3) of Section 16 of Arbitration Act. The relevant Section reads as follows:

“16. Competence of arbitral tribunal to rule on its jurisdiction.

(2) A plea that the arbitral tribunal does not have jurisdiction shall be raised not later than the submission of the statement of defence; however, a party shall not be precluded from raising such a plea merely because that he has appointed, or participated in the appointment of, an arbitrator.

(3) A plea that the arbitral Tribunal is exceeding the scope of its authority shall be raised as soon as the matter alleged to be beyond the scope of its authority is raised during the arbitral proceedings.”

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