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J. B. PARDIWALA, R. MAHADEVAN
ASF Buildtech Private Limited – Appellant
Versus
Shapoorji Pallonji and Company Private Limited – Respondent
What is the power of an Arbitral Tribunal to implead or join a non-signatory to an arbitration agreement as a party to arbitration proceedings?
Key Points: - An Arbitral Tribunal has the power to implead or join a non-signatory to an arbitration agreement as a party to arbitration proceedings (!) . - The archaic understanding that an Arbitral Tribunal is incapable of identifying and impleading a non-signatory on its own accord is not the correct position of law (!) . - Both courts and tribunals are empowered to decide issues of impleadment of a non-signatory, with Arbitral Tribunals being the preferred forum (!) . - The jurisdiction of an Arbitral Tribunal is founded on the arbitration agreement, not merely the subjective intent of parties (!) . - The doctrine of competence-competence, enshrined in Section 16 of the Act, empowers Arbitral Tribunals to rule on their own jurisdiction, including the determination of parties to an arbitration agreement (!) (!) . - Mere incidental involvement in contract negotiation or performance is insufficient to infer a non-signatory's consent to be bound by an arbitration agreement (!) . - The determination of whether a non-signatory is bound by an arbitration agreement is a factual inquiry requiring a holistic assessment of various factors (!) (!) . - The non-service of a notice of invocation under Section 21 of the Act does not nullify an Arbitral Tribunal's jurisdiction over a party who can be impleaded (!) . - The High Court's decision affirming the Arbitral Tribunal's order to implead non-signatories was upheld, finding no error of law (!) . - Procedural issues regarding the impleadment of parties continue to plague the arbitration regime in India, and legislative changes are urged (!) .
JUDGMENT :
J.B. PARDIWALA, J.
For the convenience of exposition, this judgment is divided in the following parts: -
| INDEX | |
| A. | FACTUAL MATRIX |
| B. | SUBMISSIONS OF THE PARTIES |
| i. Submissions on behalf of the Appellant | |
| ii. Submissions on behalf of the Respondent No. 1 | |
| C. | ANALYSIS |
| i. Whether the Arbitral Tribunal has the power to Implead / Join Non- Signatories to the Arbitration Agreement? | |
| a. Contradictory Views of different High Courts on the subject | |
| I. Decisions holding that the Arbitral Tribunal does not have the power to Implead a non-signatory to the Arbitration Agreement | |
| II. Decisions holding that the Arbitral Tribunal has the power to Implead a non-signatory to the Arbitration Agreement | |
| b. Evolution of the law on referral or joinder of Non-Signatories to arbitration proceedings and the Aversion to the power of Arbitral Tribunals to implead a Non-Signatory | |
| I. Decision of Chloro Controls and the Arbitration and Conciliation (Amendment) Act, 2015 | |
| II. Decision of Cox and Kings (I) and the Judicial Rectification of the first misconception by Chloro Controls | |
| III. Decision of | |
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