The Delhi High Court has reaffirmed the settled legal principle that an Arbitral Tribunal possesses the authority to implead non-signatories to arbitration, provided they are deemed necessary parties to the proceedings.
The Court was approached under Section 11(6) of the Arbitration & Conciliation Act, 1996, seeking the appointment of an Arbitrator to adjudicate disputes arising under the Standard Transportation Agreement dated March 1, 2021 and the Customs Clearing Agent Agreement dated April 1, 2022.
The Petitioner had also impleaded other respondent, contending that their participation was necessary for effective adjudication of the dispute. However, the Court observed that the respondent was not a signatory to the agreements and, therefore, ought to be deleted from the array of parties.
At the same time, the Petitioner was granted liberty to move an application under Order I Rule 10 of the CPC before the Arbitrator, seeking impleadment of the respondent as a necessary party.
Recognizing the validity of the arbitration clauses contained in Clause 12 of the Standard Transportation Agreement and Clause 23 of the Customs Clearing Agent Agreement, both of which specify Delhi as the seat of arbitration, the Court found it appropriate to appoint an Arbitrator to adjudicate the disputes.
This judgment reinforces the legal position that an Arbitral Tribunal has the discretion to implead non-signatories where their involvement is deemed necessary for effective dispute resolution.
By leaving this determination to the Tribunal, the Delhi High Court has reaffirmed India’s pro-arbitration stance, ensuring minimal judicial interference while maintaining procedural fairness and party autonomy in arbitration proceedings.
Tushar Kumar, Advocate represented the Petitioner.
