Decision Of Arbitral Tribunal To Not Implead A Party To Arbitration Is Not An 'Interim Award': Delhi High Court

The Single Bench of Justice Prateek Jalan of High Court of Delhi has held that a decision of the arbitral tribunal to refuse to implead a party to the arbitral proceedings does not constitute an 'Interim Award' which can be directly challenged under Section 34 of the Act pending arbitral proceedings. Facts The parties entered into a concession agreement dated 15.07.2011. Thereafter, the respondent also entered into State Support Agreement (SSA) with the State of Gujarat. A dispute arose between the parties which was referred to a three-member arbitral tribunal. Before the arbitral tribunal, the petitioner preferred an application under Order I Rul 10 of CPC seeking to implead State of Gujarat as a party to the arbitration proceedings. The tribunal, vide the impugned order dated 01.08.2022, rejected the application on the ground that it does not have the jurisdiction to decide on impleadment of a non-signatory. Aggrieved thereby, the petitioner challenged the order under Section 34 of the A&C Act. Submissions of the Parties: The respondent objected to the maintainability of the petition on the following grounds: The order of the arbitral tribunal rejecting to implead a party is not an interim award which can be directly challenged under Section 34 of the Act. The tribunal rightly rejected the application since the State is not party to the Concession Agreement and the petitioner is not a party to the State Support Agreement, thus, there is no privity between the parties. The petitioner made the following counter-submissions: The order of the tribunal has the effect of exonerating the State of Gujrat of its obligations qua the dispute, partaking character of a final and substantive decision, ergo, it is an interim award. Analysis by the Court The Court observed that neither the State of Gujarat is a party of the concession agreement nor the petitioner is a party to the State Support Agreement. The Court referred to the decision of a coordinate bench in NHAI v. Lucknow Sitapur Expressway[1] wherein the Court held that order of tribunal on the issue of impleadment of a party does not constitute an interim award. The Court held that an order can qualify as an interim award only when it either touches upon the merits of the claims or conclusively decides on a dispute between the parties. It held even if a party is not impleaded, it would still not deprive the petitioner of its remedy available under the Concession Agreement. It held that the application praying for impleadment of third party was not a matter which would dovetail into the final award. Accordingly, the Court dismissed the petition as not maintainable. Case Title: NHAI v. M/s IRB Ahmedabad Vadodra Super Express TollwaysCitation: 2024 LiveLaw (Del) 432 Date: 02.04.2024 Counsel for the Petitioner: Mr. Ankur Mittal, Mr. Abhay Gupta & Mr. Ankur Saboo, Advocates. Counsel for the Respondent: Mr. Atul Nanda, Senior Advocate with Ms. Rameeza Hakim, Mr. Saket Sikri, Mr. Anirudh Bakhru, Ms. Teresa Daulat, Mr. Mohanish Patkar, Mr. Raj Adhia, Ms. Devika Mohan, Ms. Charu Shriyam Singh, Ms. Pragya Gautam, Mr. Martand Singh, Ms. Vartika Singh, Mr. Sarthak Sachdev & Mr. Vatan Sharma, Advocates. Click Here to Read/Download Order [1] 2022/DHC/005696

Decision Of Arbitral Tribunal To Not Implead A Party To Arbitration Is Not An 'Interim Award': Delhi High Court

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