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Bombay HC: Third-Party Rights to Appeal Under Arbitration and Conciliation Act 1996

There has been a remarkable judgement passed by the Bombay High Court, which has made its way, stating that even the third parties to the arbitration process in India can file for an appeal if the Arbitrators order and decision causes loss or affects them in any way. Read on what brought this to light.

Recently, a landmark judgement has again made its pace in the history, which states that now, even the third parties to the arbitration can also file for an appeal if the decision by the Arbitrator has caused or affected them in a different way.

The Judgment was given in the case of arbitration proceedings going on between Excel Metal Processors Pvt Ltd and Shakti International Pvt Ltd. by the bench of Justice RD Dhanuka of Bombay High Court, after going through the hearing of 13 petitions filed under the Section 37 of the Arbitration and Conciliation Act. 

The matter came up when the petition was filed against the decision given by the sole arbitrator on December 27th, 2016 and the order passed by the High Court dated November 17th, 2017.

The petition was filed with the aim of filing appeals against the respective orders of the court and the arbitrator. The petitioners to were of the view that the orders passed were causing prejudice to the interest of the parties.
Further, a court receiver was appointed and given charge of submitting reports related to the matter in the High Court. 

The counsel of the petitioner submitted that  if the orders under Section 9 of the Arbitration and Conciliation Act are affecting the interest of the third party, that is somehow related to the matter and having an interest in the matter, then in such case, the third party can approach the court by the way of an appeal for the modification or for the appropriate orders to be passed by the court. 

In the present case, the arbitration was going on between the Respondent No. 1 and 2, The Counsel of the petitioner stated that this does not mean that the petitioner in such a case will remain with no options of getting a remedy. 

There is no as such restriction provided under the section 37  of the Act on the interest of the third affected party, that he cannot file for an appeal under the Section 17 of the Arbitration Act. 

Hence, after going through the arguments and evidence produced by both the parties, the court held that no third person who is having an interest in the ongoing arbitration shall be deprived of filing an appeal before the court. 

Thus, the final decision came that the third parties to the arbitration proceeding are also entitled to appeal if they are in anyway affected by the decision of the Arbitrator.


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Reviewed by:
Jyoti Yadav
Published on 12-Sep-18