The Delhi High Court in its order dated 29th March 2023 in the case of Goyal mg gases Pvt ltd v/s Panama infrastructure developers Pvt Ltd and Ors held that an order of arbitral tribunal rejecting to implead parties in arbitral proceedings is not an “interim award” under the arbitration and conciliation act,1996 as it does not deal with the merits of the case or decides any substantive question of law.
The Appellant had entered into a sale agreement with the respondent who is the owner of certain windmill assets to purchase the said windmill projects. However, the respondent unilaterally terminated the agreement and then the dispute was referred to arbitration. The appellant filed an application before the sole arbitrator to implead the transferees as parties to the proceedings to whom the respondent allegedly sold the windmill projects in violation of the sale agreement.
The sole arbitrator dismissed the application of the Appellant on the ground that the transferees are not necessary or proper parties and the proceedings between the applicant and respondent can go ahead without impleading the transferees as a third party. Then Appellant challenged the decision before the Delhi high court where it was dismissed by a single judge on the ground that the order of the arbitral tribunal did not constitute an interim award.
Aggrieved by this the appellant filed an appeal before the division bench of the Delhi high court and contended that a third party who is non-signatory to the arbitration agreement can be impleaded as a party in the arbitration proceedings. To which the respondent counter-argued by saying that only parties to the arbitration agreement are bound by arbitration proceedings and no third party can be impleaded in the proceedings.
The court referred to the decisions made in the case of Chrolo controls private ltd v/s Serven Trent water purification inc & ors 2012 and Cheran properties ltd v/s Kasturi & sons ltd 2018 and held that party who is non-signatory to the arbitration agreement can be impleaded in the arbitration proceedings however the court upheld the decision of the single judge of Delhi high court who refused to implead transferees to the proceedings on the ground that they are not necessary parties.
Further, the court held that the order of the arbitral tribunal rejecting to implead the parties to the proceedings is not an interim award under the arbitration and conciliation act,1996 reason being it did not decide a substantive dispute existing between the parties
The court also referred to the decisions in Rhiti sports management Pvt ltd v/s power play sports & events 2018 and said that for an order to be called an interim award, it must decide the “matters of moments” or dispose of a claim raised by the parties.
Thus, the court for the above reasons dismissed the appeal.
Written by Amruta Pawar, semester 6th, college: University of Mumbai thane sub campus
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