Arbitral Tribunal has powers to implead a non-signatory as party to the counter claim
Respondent No.3 Black Canyon SEZ (BCS) initiated arbitration against the Respondent No.1 Shapoorji Pallonji & Com (SPC) in relation to the Settlement Agreement dated 24.7.2020.
Respondent No.1 SPC filed counter claim against BCS as well as the appellant ASF Buildtech (ABPL) and Respondent No.2 ASF Insignia SEZ (AISPL) – both part of ASF Group.
Before the Arbitrator, SPCL contended that BCS, ABPL and ASIPL are bound by the Arbitration Agreement in the Works Contract dated 21.11.2016.
Three Section 16 applications were filed for rejecting the counter claim against AISPL and ABPL.
By the orders dated 23.5.2023 and 17.10.2023, the Arbitral Tribunal held that the questions are mixed questions of facts and law and cannot be decided without first arraying them as parties.
HELD, for the reasons summarized in para 163 of the 190 pages judgment, the Supreme Court observed that the judicial trend is that all issues should be before the Arbitral Tribunal and the power under Section 11(6A) is restricted to examination of an arbitration agreement.
Even the non-issuance of Section 21 notice on the appellant cannot be said to be fatal to its impleadment. The principle of consensus ad idem for referring disputes to arbitral tribunals applies to the signatories to the arbitration agreement and not to the non-signatories who are sought to be impleadment.
Judgment dated 2.5.2025 of the Supreme Court of India in Civil Appeal No.5823 of 2025 of ASF Buildtech Private Limited Vs. Shapoorji Pallonji and Company Private Limited
