Cardinal Energy and Infra Structure Private Ltd. v. Subramanya Construction and Development Co. Ltd. (Bombay High Court)

Court: Bombay High Court
Head Notes:

The issue before the Bombay High Court was whether an Arbitral Tribunal can implead parties who were non-signatories to the Arbitration Agreement, without such a power being expressly endowed upon it by the Referral Court at the time of reference of the disputes to arbitration.

After noting the judgements of the Delhi High Court in Arupri Logistics Pvt. Ltd. Vs. Vilas Gupta and Ors. 2023 SCC OnLine SC Del 4297 and the Madras High Court in Abhibus Services India Private Ltd. and Ors. v. Pallavan Transport Consultancies Services Ltd. 2022 SCC OnLine Mad 796, the Bombay High Court has held that the decision of the Supreme Court in Cox and Kings v. SPA India Private Limited 2023 SCC OnLine SC 1634 changes the law on this subject and after the Supreme Court has held that this issue is to be left to the arbitral tribunal to determine, the arbitral tribunal is not precluded from determining the issue regarding impleadment of non-signatories even when this issue was not even raised before the Referral Court under section 11 of the Arbitration and Conciliation Act, 1996 (Arbitration Act). The Bombay High Court has further held that merely by there being no prayer for impleadment of a non-signatory in the Section 11 Application, it cannot be said that the applicability of the doctrine of ‘group of companies’ by the Sole Arbitrator stands excluded.

The High Court further held that Section 16 of the Arbitration Act includes the power to determine issues of jurisdiction which would include whether the Arbitrator has jurisdiction over non signatories to an Arbitration Agreement.

Accordingly, the order of the Arbitral Tribunal impleading the Petitioners as parties to the arbitration despite they being non-signatories to the Arbitration Agreement, was upheld and the Arbitration Petition was dismissed.

Section(s): Section 16, 'Group of Companies' doctrine
Counsel(s): Shiraz Rustomjee, Rahul Sarda
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Date of upload: April 12, 2024

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