Arbitration beyond boundaries – Section 9 & Third Party

 

Judgment dated 19.8.2025 of the Division Bench of the High Court of Telangana in C.R.P.Nos.1014 and 1184 of 2024 of K. Bala Visnu Raju  Vs.   Emaar Hills Township Private Limited and others

 Arbitration  – Section 9 Petition against Third Party

 Respondent No.2 was allotted the plot in the township project.  There was MoU that the petitioner shall pay the consideration amount of the plot and the respondent no.2 shall share built up area with the petitioner.   Clause 11 of the MoU provided for arbitration agreement.

 Thereafter, the petitioner paid the consideration by cheques and the agreement of sale was executed in favour of the respondent no.2.

 The petitioner filed section 9 petition for restraining the respondent no.2 from alienating or creating third party interest in the property and directing  respondent nos.1 and 3 from executing the sale deed.  

Respondent Nos.1 and 3 had filed interim applications for deletion of their names as parties in the said petition.

 In that context, it was HELD that although the respondent nos.1 and 3 were recipients of the consideration paid by the petitioner on behalf of the respondent no.2. Moreover, section 9 does not limit interim measures only to a party to an arbitration agreement but unspecified party also.   There are no fetters on the Court in pulling in non-parties – strangers to an arbitration agreement – in the zone of protective interim measures.