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| Stranger to arbitration agreement cannot be treated as respondent in proceeding: HC | | | Early Times Report
JAMMU, Oct 17: The Jammu & Kashmir and Ladakh High Court holds that If a stranger to an arbitration agreement between the two parties can have no locus to invoke the provisions of the Arbitration and Conciliation Act, 1996 so is the inverse situation that a stranger to an arbitration agreement cannot be located as a respondent in a proceeding initiated by one of the parties against another party under the arbitration agreement unless and until the case would fall in the frame.
Justice Rahul Bharti while disposing of the petition after hearing Advocate Karan Sharma for the petitioner whereas Anil Kher, Sr. Advocate with Inderjeet Gupta, Advocate. Yatin Mahajan, Advocate. Vishal Garg, Advocate And Bari Abdullah, Advocate for the respondents, observed that the application of the appellants read with the present appeal failed purely on the point that a non-party to an arbitration agreement has been entangled in the proceeding under Section 9 of the Arbitration and Conciliation Act so in case if any application under Section 9 of the Arbitration and Conciliation Act is opted and/or advised to be filed by the appellants against the respondent no.1-M/s Irshad Hussain Wani & Co., then the dismissal of the earlier application as well as this appeal shall not be meant to be causing any prejudice to any such application of the appellants and also to any defence/objection as may be set up by the respondent no.1 in response to the said new application of the appellants.
The point in this case is about sustainability of an application, filed under section 9 of the Arbitration and Conciliation Act, 1996 for seeking any of the enlisted directions/measures therein, aimed against a third party which is not a party/privy to the arbitration agreement and/or the subject matter of the contract between the arbitration bound parties.
The respondent no.1-M/s Irshad Hussain Wani & Co. and the appellant nos. 1 & 2 are parties to a notarized agreement dated 14.07.2016. In terms of this agreement, as per its clause (10), an arbitration clause stands provided contemplating that any dispute arising between the parties relatable to the contract to be referred to an arbitration for resolution of the dispute. 4. It seems that the respondent no.1- M/s Irshad Hussain Wani & Co., in its own right, as being a business concern was having business dealing with the respondent No.3 -the Ericsson India Private Limited well before making of the agreement dated 14.07.2016 with the appellants. By reference to the business relationship between the respondent no.1 and the respondent no.3-the Ericsson India Private Limited, the appellants and the respondent no.1 had executed the above said agreement for the purpose of working out investments to be made from their respective end for enabling the respondent no.1 to carry out the business engagements of the respondent no.1 with the respondent no.3 -the Ericsson India Private Limited. For sure, the respondent no.3-the Ericsson India Private Limited had and has no concern, by any stretch of express or implied reference and relation, with the said agreement dated 14.07.2016 of the appellants with the respondent no.1. In fact, in terms of clause (4) of the said agreement, it is clearly stipulated that the appellants had to have no concern with the respondent no.3-the Ericsson India Private Limited. Thus it was well known to the appellant all along that they were not to relate themselves through said agreement dated 14.07.2016 with the respondent no. 1 to the respondent no. 3-the Ericsson India Private Limited. This agreement dated 14.07.2016 was followed by making of a supplementary agreement dated 22.03.2017 between very same two parties i.e., the appellants on one hand and the respondent no. 1-M/s Irshad Hussain Wani & Co., on other hand. |
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