Arbitral Tribunal’s Order Rejecting The Application For Impleadment Of Party Doesn’t Constitute An ‘Interim Award’
Cause Title : Goyal Mg Gases Pvt Ltd vs Panama Infrastructure Developers Pvt Ltd & Ors, Fao(Os) (Comm) 217/2019 & Cm Appl. 40390/2019 (Stay), Delhi High Court
Date of Judgment/Order : March 29, 2023
Corum : Hon'ble Mr. Justice Najmi Waziri & Hon'ble Mr. Justice Sudhir Kumar Jain
Citied:
- Chrolo Controls India Private Ltd. V Severn Trent Water Purification Inc. and Ors., (2013) 1 SCC 641
- Cheran Properties Ltd. V Kasturi & Sons Ltd., (2018) 16 SCC 413
- Rhiti Sports V Powerplay Sports, 2018 SCC OnLine Del 8678
- Kasturi V lyyamperumal & Ors., (2005) 6 SCC 733
- Nirmala Jain &Ors. V Jasbir Singh & Ors., 256 (2019) DLT 186[DB]
- Rhiti Sports V Powerplay Sports, 2018 SCC OnLine Del 8678
- National Highway Authority of India V Lucknow Sitapur Expressway Ltd.
Background
The respondents wanted to sell their 11 windmills to the applicants. As per agreement, the applicant paid some advance and the remaining were to be paid after concluding due diligence which could not be done allegedly due to fault of the respondents. Subsequently, the respondents terminated the agreement which the applicants allege was against the agreement. An arbitrator was appointed and the respondents disclosed the identities of the new buyers of their windmills with whom they have entered into fresh agreement for sale. The applicant filed an application under Order 1 Rule X of the Civil Procedure Code, 1908, before the learned Sole Arbitrator for impleadment of those new buyers. The Arbitrator dismissed the application stating that since if a decree is passed in favour of the applicant it would automatically make the agreement of the respondent to the third parties (new buyers) null and void, therefore these buyers are neither necessary nor proper parties.
Appeal against the order under Section 34 of the arbitration and conciliation act before the Single Judge was dismissed as the court agreeing with the Arbitrator further observed that rejection of impleadment of third parties is not an award and therefore cannot be challenged under Section 34. Hence this appeal.
The primary objections of the applicants against the orders not to implead the third parties was that the applicants would be prejudiced as the respondents have disclosed these buyers after the applicants have filed their application and the applicants not being aware of their existence and not having impleaded them in the application would have no recourse against these third party entities.
Judgment
- there must be a right to some relief against such party in respect of the controversies involved in the proceedings;
- no effective decree can be passed in the absence of such party.
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