Excelsior Correspondent
JAMMU, Oct 17: High Court has held 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 said, while disposing of the petition.
After hearing Advocate Karan Sharma for the petitioner whereas Senior Advocate Anil Kher with Advocates Inderjeet Gupta, Yatin Mahajan, Vishal Garg, and Bari Abdullah for the respondents, Justice Rahul Bharti, while dismissing the appeal, observed, “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 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 in response to the 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”, High Court said.
Justice Bharti further said, “the respondent M/s Irshad Hussain Wani & Co and the appellantsare 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”.
“It seems that the respondent M/s Irshad Hussain Wani & Co., in its own right, as being a business concern was having business dealing with the respondent the Ericsson India Private Limited well before making of the agreement dated 14.07.2016 with the appellants”, High Court said, adding “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 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 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 agreement dated 14.07.2016 of the appellants with the respondent No.1”, High Court said, adding “in fact, in terms of clause (4) of the 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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