Third Parties To Arbitration Proceeding Entitled To Appeal If They Are Affected By Arbitrator’s Decision: Bombay HC [Read Judgment]

In a landmark judgment, the Bombay High Court has held that a third party to an arbitration proceeding has the right to maintain an appeal under Section 37 of the Arbitration and Conciliation Act, 1996, if they are affected by an order passed by an arbitrator under Section 17 of the said Act.Justice RD Dhanuka heard a batch of 13 petitions filed under section 37 of the Arbitration. Justice RD Dhanuka heard a batch of 13 petitions filed under section 37 of the Arbitration & Conciliation Act, wherein the petitioners prayed for leave to appeal against the order passed by a sole arbitrator dated December 27, 2016, and an order by the high court dated November 17, 2017, in an arbitration proceeding between Excel Metal Processors Pvt Ltd and Shakti International Pvt Ltd. At that point of time, the offices of Respondent No.1 and Respondent No.3 informed the petitioner about some arbitration proceedings pending between Respondent No.1 and Respondent No.2 and that the coils of the petitioners were identified amongst 5092.860 MT HR coils which were purportedly claimed by Respondent No.2 and have been attached/injuncted pursuant to an order dated December 27, 2016 passed by arbitrator Justice Dr. S. Radhakrishnan. Justice Dhanuka allowed the petitions and set aside the order passed by the arbitrator: “In my view, since the petitioners have demonstrated before this Court their right, title and interest in those coils, the respondent no.1 and the respondent no.3 have also admitted before the learned arbitrator and also before this Court that those coils belonged to the petitioners as well as Karamtara Engineering Private Limited respectively and in view of the fact that the respondent no.2 has also admitted that those coils have been allegedly removed / replaced by the respondent no.1 which were alleged to have been purchased by the respondent no.2, the impugned order passed by the learned arbitrator granting injunction against the respondent no.1 and the respondent no.3 from handing over possession thereof to any third party deserves to be set aside.” Read the Judgment Here