ADVERTISEMENT
Delhi High Court
Jiostar India Pvt. Ltd vs Ms Absolute Legends Sports Private … on 22 April, 2026
$~37
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of decision: 22.04.2026
+ O.M.P.(I) (COMM.) 88/2026, I.A. 6052/2026 (For ad-interim
relief), I.A. 6053/2026 (For Exemption),I.A. 11015/2026 (U/O
XXXIX Rule 4) & I.A. 11047/2026 (Seeking exemption from
filing certified copies of the documents)
JIOSTAR INDIA PVT. LTD. .....Petitioner
Through: Ms. Aanchal Tandon, Ms. Niti
Jain and Mr. Nitai Agarwal,
Advocates.
versus
MS ABSOLUTE LEGENDS SPORTS PRIVATE LIMITED &
ANR. .....Respondents
Through: Mr. Arjun Syal and Ms. Vidisha
Kumar, Advocates for
R-1.
Mr. Neeraj J. Vasu and Ms.
Pakhi Jain, Advocates for
R-2.
Ms. Shivani Sharma and Mr.
Sanampreet Singh, Advocates
for Applicant in I.A.
11046/2026.
Mr. Paresh B. Lal, Ms. Shivani
Sharma and Mr. Sanidhiya
Gupta, Advocates for
Intervener.
CORAM:
HON'BLE MR. JUSTICE HARISH VAIDYANATHAN
SHANKAR
% JUDGEMENT (ORAL)
Signature Not Verified
Digitally Signed
By:VARNIKA
O.M.P.(I) (COMM.) 88/2026
Signing Date:28.04.2026 Page 1 of 26
11:21:17
I.A. 11046/2026 (U/O I Rule 8-A seeking impleadment) I.A.
11015/2026 (U/O XXXIX Rule 4) & I.A. 11047/2026 (Seeking
exemption from filing certified copies of the documents)
1. The application, being I.A. No. 11046/2026, has been filed by
Avro Commercial Company Pvt. Ltd.1 under Order I Rule 8A read
with Section 151 of the Code of Civil Procedure, 19082, seeking,
inter alia, its impleadment as a party in the petition being
O.M.P.(I)(COMM.) 88/20263, instituted under Section 9 of the
Arbitration and Conciliation Act, 19964. By way of the said
application, the Applicant has prayed for the following reliefs:
"....
a. Pass an order allowing the present application and implead the
Applicant as a party to the present proceedings in O.M.P. (I)
(COMM.) 88 of 2026, in the interest of justice;
b. Pass an order permitting the Applicant to file its reply to the
Petition and the applications filed therein, including placing on
record all relevant documents concerning its security interest;
c. Pass such further or other orders as this Hon'ble Court may deem
fit and proper in the facts and circumstances of the present case."
2. Along with I.A. No. 11046/2026, two other applications have
also been filed by the Applicant, namely: (i) I.A. No. 11015/2026,
seeking vacation of the stay granted by this Court vide Order dated
18.03.20265 in the Interim Petition; and (ii) I.A. No. 11047/2026,
seeking exemption from filing certified copies of certain documents.
However, consideration of the said applications on merits would arise
only in the event the Applicant succeeds in the present application,
1
Applicant
2
CPC
3
Interim Petition
4
A&C Act
5
Interim order dated 18.03.2026
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i.e., I.A. No. 11046/2026, seeking impleadment in the Interim
Petition.
3. Learned counsel appearing on behalf of the Applicant submits
that the aforesaid applications have been necessitated in view of the
Interim Order dated 18.03.2026 passed by this Court in the Interim
Petition, whereby relief in terms of Prayer (c) of the Interim Petition
came to be granted in favour of the Petitioner. For ready reference,
Prayer (c) of the petition reads as under:
"....
(c) Pass an order in the nature of an ex-parte ad-interim/interim
nature restraining the Respondent No.1 and/or Respondent No. 2
(or any of their directors/ officers/ employees/ representatives as
well as any third party(ies) acting through Respondent no. 1 and/or
2, from creating any third-party rights, transferring, assigning or
otherwise dealing with the media and commercial rights relating to
the Legends League Cricket Masters T20 tournament in violation
of the binding contractual agreements executed between the parties
and to safeguard the amount outstanding on part of the Respondent
No.1; and/or
...."
4. The relevant operative portion of the Interim Order dated
18.03.2026, whereby the aforesaid relief was granted, is reproduced
herein below for ready reference:
"6.The Respondent No. 1 is therefore interdicted from, in any
manner, creating any third-party rights, or transferring, assigning,
or otherwise dealing with the media and commercial rights relating
to the Legends League Cricket Master T20 tournament.
7. Accordingly, the relief, as sought for in prayer (c), is granted to
the Petitioner in aforesaid terms."
5. Turning now to the consideration of I.A. No. 11046/2026,
learned counsel appearing on behalf of the Applicant submits that the
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Applicant and Respondent No. 1 of the Interim Petition6 had
entered into a Loan Agreement dated 20.04.20247, along with a
Hypothecation Agreement dated 20.04.20248, pursuant to which
Respondent No. 1 had availed financial assistance from the Applicant.
6. Learned counsel for the Applicant further submits that, under
the aforesaid contractual arrangements, the Applicant claims the status
of a secured creditor and asserts beneficial rights, inter alia, over the
receivables as well as the tangible and intangible assets of Respondent
No. 1.
7. Placing reliance upon the Interim Order dated 18.03.2026, the
Loan Agreement, and the Hypothecation Agreement, learned counsel
for the Applicant contends that the interim restraint granted by this
Court vide Order dated 18.03.2026 and materially affects the rights
and security interests of the Applicant. It is further submitted that such
prejudice particularly arises insofar as the Applicant claims a
subsisting interest in the receivables and other hypothecated assets
described in Schedule I of the Hypothecation Deed, which enumerates
the "Details of the Hypothecated Properties".
8. Learned counsel for the Applicant further submits that the
Applicant‟s rights had arisen prior in point of time to the institution of
the present Interim Petition under Section 9 of the A&C Act, and
therefore, deserve due recognition and consideration by this Court.
Learned counsel also contends that the interim directions already
passed have the potential to disturb and adversely affect the subsisting
6
Respondent No. 1
7
Loan Agreement
8
Hypothecation Agreement
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commercial arrangement between the Applicant and Respondent No.
1.
9. Learned counsel for the Applicant submits that the impleadment
of the Applicant in the present proceedings is necessary to enable this
Court to undertake a complete, effective, and meaningful adjudication
of the issues arising herein, and to render justice in its proper
perspective after hearing all parties whose rights may be materially
affected.
10. In the aforesaid backdrop, it is urged by the learned counsel for
the Applicant that denial of an opportunity to the Applicant to place its
case on record in the present Interim Petition under Section 9 of the
A&C Act, without due consideration, would offend the foundational
principles of fairness and the settled tenets of natural justice.
According to learned counsel, such exclusion would cause serious
prejudice to the Applicant, adversely impact its legal and commercial
rights, and result in manifest injustice.
11. In support of the aforesaid submissions, learned counsel places
reliance upon the judgment of the Bombay High Court rendered in a
batch of petitions, including Prabhat Steel Traders Pvt. Ltd.vs. Excel
Metal Processors Pvt. Ltd.9, particularly Paragraphs 42, 45, and 46
thereof, which read as under:
"42. The question therefore arises for consideration of this Court is
whether a third party who is aggrieved by any such order of interim
measures granted by the arbitral tribunal can file an appeal under
section 37 of the Arbitration & Conciliation Act, 1996 after
obtaining the leave of the Court or otherwise and whether can
impugn such order of the arbitral tribunal in respect of any goods or
properties in respect of any such right, title or interest claimed by
9
2018 SCC OnLine Bom 2347
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such third party or in any other manner affected by such interim
measures or not.
****
45. The only distinction which can be drawn in the said judgment
of this Court in case of Narayan Manik Patil (supra) is that the
third party who is not a party to an arbitration agreement, cannot
apply before the arbitral tribunal for modification and for vacating
the order of interim measures passed by such arbitral tribunal.
However, in case of a party to the arbitration agreement applying
for interim measures under section 9 of the Arbitration &
Conciliation Act, 1996 before a Court defined under section 2(1)(e)
of the Arbitration & Conciliation Act, 1996, if any third party is
likely to be affected if any such order of interim measures is
granted as prayed by a party to the arbitration agreement or directly
or indirectly any interim measures are prayed against such third
party, no such interim measures can be granted by a Court against
such third party unless such party is impleaded as a party to the
said application under section 9 of the Arbitration & Conciliation
Act, 1996.
46. Be that as it may, even if such third party is not impleaded as a
party to such application filed under section 9 of the Arbitration &
Conciliation Act, 1996, such third party can certainly apply for
impleadment or intervention in such proceedings filed under
section 9 of the Arbitration & Conciliation Act, 1996 and can apply
for modification and/or variation of the order of interim measures
passed by a Court. In my view, such third party cannot be asked to
file a civil suit and to challenge the order of interim measures
granted by the arbitral tribunal. The validity of the order passed by
the arbitral tribunal under section 17 of the Arbitration &
Conciliation Act, 1996 cannot be challenged in a civil suit. The
Civil Court does not sit in an appeal against an order of the arbitral
tribunal passed under section 17 of the Arbitration & Conciliation
Act, 1996."
12. Relying upon the aforesaid observations, learned counsel for the
Applicant submits that where orders of interim protection are likely to
affect the rights or proprietary interests of a third party, such party
cannot be rendered remediless or excluded from the proceedings. It is,
therefore, contended that I.A. No. 11046/2026 deserves favourable
consideration and that the Applicant ought to be impleaded as a party
to the present Interim Petition.
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13. Learned counsel for the Applicant further places reliance upon
the judgment of the High Court of Jammu and Kashmir in
Mohammad Ishaq Bhat vs. Tariq Ahmad Sofi & Anr.10, particularly
the opening paragraph framing the controversy and paragraph 9
thereof. On the strength of the said decision, it is submitted that
although a stranger to an arbitration agreement may not independently
seek relief under Section 9 of the A&C Act, such person may
nevertheless be impleaded where he is able to demonstrate that he is a
proper or necessary party, whose presence would assist the Court in
arriving at a just and proper conclusion and would avoid multiplicity
of proceedings. The relevant paraghraphs of the said judgement read
as follows:
"Whether a stranger to an arbitration agreement can be impleaded a
party to an application under Section 9 Jammu and Kashmir
Arbitration and Conciliation Act, 1997 (for short Act) is the short
controversy involved in the present review petition.
****
9. Section 9 of the Act provides for interim measures for protection
and preservation of the subject matter of arbitration proceedings
and matters ancillary thereto. It also provides for interim measures
like appointment of guardian for a minor or person of unsound
mind to facilitate the arbitral proceedings. The provision
enumerates the interim measures that the principal Court of original
jurisdiction in a district of the High Court may order, to attain the
objects set out therein. The concluding para of Section 9 of the Act
provides that "a Court shall have same powers to make orders as it
has for the parties for............any proceedings before it". There
can be no disagreement with the legal preposition that right to seek
interim measures vide Section 9 of the Act, is conferred exclusively
on a party to the arbitration agreement. Section 2 (1)(g) of the Act
leaves no room for any doubt in this regard. It defines "party" as "a
party to a arbitration agreement". In the circumstances, a stranger
to the arbitration agreement cannot press into service Section 9 of
the Act and ask the Court to order any interim measure for
protection and preservation of the subject matter of arbitration
10
2010 SCC OnLine J&K 41
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agreement or other interim measures envisioned by the provision.
The person, not a party to the arbitration agreement, no matter how
grave and serious his grievance is can not approach to the Court
with an application under Section 9 of the Act. It is exactly what
has been laid down in AIR 2009 Guwahati 110. However
restrictions placed on locus of a person to invoke Section 9 of the
Act may not be applicable to a person who does not pray for any
interim measures but intends to acquaint the Court with facts to
enable the Court to make a just and proper order. If a person is
materially and substantially interested in subject matter of the
arbitration agreements and is likely to be materially affected by the
order, the Court is asked to pass under Section 9 of the Act, is kept
at bay there is every likelihood of justice being not done in the
matter. A person having vital interest in the subject matter of
arbitration agreement can not be asked to watch proceedings from
the fence and leave the arena for the parties to the arbitration
agreement to cut swords, when the victim of the out come of the
dispute is non else but the person pushed to the fence. After all,
what is endgame in proceedings before the Court. The Court is
required to arrive at just conclusion and do justice between the
parties. In order to enable the Court to discharge its mandate, it is
necessary to a person who is interested in the subject matter of
arbitration agreement and is in a position to render assistance to the
Court is allowed to become a party to the proceedings. The case in
hand is an illustrative instance of injustice that may be the result, if
a person though stranger to arbitration agreement, is not allowed to
become a party to the proceedings under Section 9 of the Act. The
petitioner claims to be running business in the suit shop, in tenancy
of his father for decades together and now in his possession as a
tenant thereof. The respondent is claimed to have entered into a
partnership with the respondent No. 2 petitioner's son where under
tenancy rights in the suit shop along with business run in the suit
shop, stands transferred to the firm, a plea vehemently denied by
the petitioner. The petitioner as back as on 7-10-2006, i.e. before
the application under Section 9 of the Act was moved by the
respondent No. 1, filed on declaratory and injunction suit and the
ad-interim order has been passed by the Court, fact which has been
with held by the respondent in the application under Section 9 of
the Act. If in peculiar situation, without hearing the petitioner and
affording the petitioner an opportunity to protect his case, any of
the interim measures suggested by the respondent No. 1 is ordered,
it may have disastrous consequence for the petitioner. To illustrate
if, as an interim measure the respondent No. 1 is ordered to be
allowed to ran the business in the suit shop, and the petitioner
restrained from interfering in the business of the respondent No. 1
or receiver as suggested by the respondent is appointed, person
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prejudicially affected by such orders may be none else but the
petitioner. So viewed Section 9 of the Act can not be interpreted to
forbid impleadment of a person, not a party to the arbitration
agreement, to the proceedings under Section 9 of the Act. The
Court has ample powers to implead a person as a party to the
proceedings under Section 9 of the Act where a person asking for
impleadment is in a position to convince the Court that he is proper
and necessary party to the proceedings and his presence before the
Court, is bound to enable the Court to pass just and proper order.
Any other interpretation would result in multiplicity of litigation
and thus would be against the public policy. What emerges is that
whereas' as stranger to an arbitration agreement can not be allowed
to seek interim measure(s) under Section 9 of the Arbitration and
Conciliation Act, 1997, a stranger may be impleaded as a party
where the Court is convinced that the applicant is a proper and
necessary party to the proceedings and his presence is bound to
enable the Court to arrive at a just and proper conclusion."
14. In response to the aforesaid submissions, learned counsel
appearing on behalf of the non-applicant refutes the contentions
advanced by the Applicant and opposes the prayer for impleadment.
Analysis & Decision:
15. This Court has heard learned counsel appearing on behalf of the
parties at length and has carefully perused the applications filed by the
Applicant, including the application for impleadment being I.A. No.
11046/2026, the documents annexed thereto, as well as the judicial
precedents relied upon by learned counsel for the Applicant in support
of the reliefs sought in the Applications.
16. At the outset, this Court deems it apposite to advert to the
statutory framework governing the controversy at hand. Since I.A. No.
11046/2026 seeks impleadment in the present Interim Petition, which
has been instituted under Section 9 of the A&C Act. It would be
appropriate to reproduce the said provision for ready reference, which
reads as under:
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"9. Interim measures, etc., by Court.-
(1)A party may, before or during arbitral proceedings or at any time
after the making of the arbitral award but before it is enforced in
accordance with section 36, apply to a court--
(i) for the appointment of a guardian for a minor or person of
unsound mind for the purposes of arbitral proceedings; or
(ii) for an interim measure of protection in respect of any of the
following matters, namely:-
(a) the preservation, interim custody or sale of any goods
which are the subject-matter of the arbitration agreement;
(b) securing the amount in dispute in the arbitration;
(c) the detention, preservation or inspection of any property or
thing which is the subject matter of the dispute in
arbitration, or as to which any question may arise therein
and authorising for any of the aforesaid purposes any person
to enter upon any land or building in the possession of any
party, or authorising any samples to be taken or any
observation to be made, or experiment to be tried, which
may be necessary or expedient for the purpose of obtaining
full information or evidence;
(d) interim injunction or the appointment of a receiver;
(e) such other interim measure of protection as may appear to
the Court to be just and convenient, and the Court shall
have the same power for making orders as it has for the
purpose of, and in relation to, any proceedings before it.
(2) Where, before the commencement of the arbitral proceedings, a
Court passes an order for any interim measure of protection under
sub-section (1), the arbitral proceedings shall be commenced within
a period of ninety days from the date of such order or within such
further time as the Court may determine.
(3) Once the arbitral tribunal has been constituted, the Court shall
not entertain an application under sub-section (1), unless the Court
finds that circumstances exist which may not render the remedy
provided under section 17 efficacious."
17. Equally, in view of the submissions advanced on behalf of the
Applicant that it ought to be permitted to be arrayed as a party in the
present Interim Petition despite not being a signatory to the arbitration
agreement under which the petition has been instituted, it becomes
necessary to notice the statutory definition of the expression "party" as
contained in Section 2(h) of the A&C Act. The same is reproduced
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herein below for ready reference:
"2. Definitions--
(h) "party" means a party to an arbitration agreement."
18. A conjoint reading of the aforesaid provisions leaves little room
for doubt that while Section 9 of the A&C Act empowers the Court to
grant interim measures in aid of arbitration, the entire statutory
architecture of the enactment remains fundamentally anchored to
disputes arising between parties to an arbitration agreement. The
expression "party", specifically defined under Section 2(h), cannot be
rendered otiose while considering a prayer for impleadment in
proceedings under Section 9 of the A&C Act.
19. It is trite that proceedings under Section 9 of the A&C Act are
ancillary, preservative, and protective in nature. The jurisdiction
conferred upon the Court thereunder is intended to secure the subject
matter of arbitration, preserve assets, protect contractual rights inter se
the parties to the arbitration agreement, and ensure that arbitral
proceedings, whether contemplated, pending, or concluded, are not
rendered nugatory. Such proceedings are not designed to become a
forum for adjudication of substantive rival claims on merits, much less
claims set up by third parties who are strangers to the arbitration
agreement.
20. The legislative intent is, therefore, manifest that the remedies
contemplated under the A&C Act, including recourse under Section 9,
are primarily structured around persons who are parties to, or who
claim through or under, the arbitration agreement. A person who is
admittedly not a signatory to the arbitration agreement, and who does
not trace any enforceable right through the agreement under which the
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Section 9 proceedings have been initiated, cannot, in the ordinary
course, insist upon being impleaded as though such person were a
contesting party to the arbitral dispute.
21. This Court is reluctant to consider the acceptance of the
proposition that applications of the present nature, seeking
impleadment by third parties in Section 9 proceedings, ought to be
entertained. If such a course were adopted, it would open the
floodgates to collateral interventions by every person asserting that
he/she may, directly or indirectly, be affected by an interim measure
passed therein.
22. Situations may well arise, as is sought to be projected in the
present case, where disputes arising out of an arbitration agreement
may incidentally affect the commercial or legal claims of persons
alien to the arbitration. However, if proceedings under Section 9 of the
A&C Act, meant to secure urgent and limited interim protection, are
transformed into a platform for adjudicating disputes between third,
fourth, or even subsequent parties, the statutory scheme of the A&C
Act would stand seriously diluted.
23. It is pertinent to note that proceedings under Section 9 of the
A&C Act are intended to maintain a temporary protective arrangement
pending arbitral adjudication. They are not meant to serve as a
platform for the determination of competing claims of multiple parties
inter se. Entertaining such an exercise would render the very purpose
of Section 9 of the A&C Act nugatory.
24. By way of illustration, in the present case, an interim
arrangement came to be passed between the parties to the Present
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Petition so as to preserve the subject matter of the dispute. If every
third party claiming to be affected by such an arrangement were
permitted to enter the lis and seek adjudication of its independent
rights, the Court would be compelled at an interim stage to determine
complex questions of title, entitlement, and liability. Such an approach
would not only impermissibly enlarge the otherwise circumscribed
scope of proceedings under Section 9 of the A&C Act, but may also
prejudice the rights of all concerned parties even before substantive
adjudication in appropriate proceedings. Such a consequence is neither
contemplated nor intended under the scheme of the A&C Act.
25. It is indeed possible that an order passed under Section 9 of the
A&C Act may, in a given case, have incidental or consequential
bearing upon the rights or commercial interests of persons other than
the contracting parties. However, that circumstance by itself cannot
furnish a legal basis to permit impleadment of every such person in
proceedings under Section 9 of the A&C Act. To allow unrestricted
intervention by third parties would neither be advisable nor conducive
to the orderly administration of justice under the A&C Act.
26. This Court is, therefore, of the considered view that if
applications of the present nature were to be entertained as a matter of
course, the same would run contrary to the legislative scheme
underlying Section 9 of the A&C Act, which is intended to secure
prompt, efficacious, and time-sensitive interim reliefs in aid of
arbitration for parties to the arbitration agreement, and not to convert
such proceedings into a forum for even examination of independent
claims of non-parties leave alone a determination. Such a course
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would defeat the summary and urgent character of the jurisdiction
exercised under Section 9 of the A&C Act and, in turn, undermine the
primary object and legislative intent of the A&C Act itself.
27. In the present case, it is apparent that the Applicant, in
substance, seeks to secure preservation and protection of rights
allegedly existing in its favour by seeking to override, or at least
subordinate, the rights asserted by the Petitioner in the present Interim
Petition. Such a claim is sought to be founded upon an independent
and allegedly prior contractual arrangement entered into between the
Applicant and Respondent No. 1.
28. In the considered opinion of this Court, such relief cannot be
secured indirectly through an application for impleadment in
proceedings instituted under Section 9 of the A&C Act by parties to a
separate arbitration agreement. The Applicant does not derive any
right, title, or entitlement from the arbitration agreement, which forms
the very foundation of the present Interim Petition. Consequently, it
cannot seek to enter these proceedings merely because it claims an
independent contractual interest against one of the existing parties.
29. This Court also takes note of the fact that the Loan Agreement,
from which the Applicant claims its asserted rights, itself contains an
arbitration clause. The relevant portion thereof reads as follows:
"17.7. Arbitration
17.7.1.The Parties shall endeavour to settle any dispute arising in
connection with the interpretation, performance, termination of this
Agreement, or otherwise in connection and/or arising out of this
Agreement ("Dispute"), through consultations and negotiations.
17.7.2. If the Parties are unable to resolve the Dispute within 15
(fifteen) days of service of the notice of Dispute, such Dispute may
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be referred to by any Party to arbitration under the (Indian)
Arbitration and Conciliation Act, 1996, as amended. The
arbitration shall be referred to a sole arbitrator appointed jointly
appointed by the Lender and the Borrower."
30. It is trite that where the Applicant alleges breach, frustration,
impairment, or jeopardy of rights arising under the Loan Agreement
entered into between the Applicant and Respondent No. 1, the proper
and efficacious course available to it is to invoke remedies under that
very contractual framework, including the dispute resolution
mechanism mutually agreed upon between the parties thereto. Such
claims cannot be merged into, or superimposed upon, the present
proceedings, which arise out of an entirely independent arbitration
arrangement between different contracting parties.
31. This Court also takes note that if claims of the present nature
were to be entertained in proceedings under Section 9 of the A&C
Act, there would be no principled basis to limit the extent or nature of
such intervention. Numerous other persons may similarly approach
the Court asserting independent rights flowing from separate contracts
inter se one or more parties to the arbitration. Any such dilution of the
carefully circumscribed scope of jurisdiction under Section 9 of the
A&C Act would seriously impair the legislative fabric and procedural
discipline underlying proceedings under the A&C Act.
32. Further, it appears that the entire case of the Applicant rests on
the assertion that it is a secured creditor and therefore enjoys a
preferential or superior right vis-à-vis the rights claimed by the
Petitioner. As stated earlier, having regard to the nature, scope, and
object of proceedings under the A&C Act, this Court is not called
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upon, nor would it be permissible in law at this stage, to adjudicate
such competing claims of priority, security interest, or inter se
entitlement arising out of independent contractual transactions.
33. Merely because Respondent No. 1 happens to be a common
party in both arrangements, one with the Petitioner and another with
the Applicant, cannot constitute a legal ground for composite
adjudication of disputes emanating from separate contracts governed
by separate rights and remedies.
34. I.A. No. 11046/2026 itself proceeds on the basis that the
Applicant claims rights arising out of the Loan Agreement and the
Hypothecation Agreement allegedly executed with Respondent No. 1.
Those rights, even if assumed arguendo to exist, do not emanate from
the arbitration agreement forming the basis of the present Interim
Petition. They are separate contractual rights, resting upon separate
documentation, and enforceable in accordance with remedies
otherwise available in law. Such claims cannot, ipso facto, enlarge the
scope of proceedings under Section 9 of the A&C Act so as to
transform the same into a forum for the determination of third-party
contractual interests.
35. Further and in addition to the above, in the present Interim
Petition, this Court has merely directed preservation of the subject
matter of the arbitral dispute on the basis of the well-settled
parameters governing interim relief between the Petitioner and
Respondent No. 1. No final or conclusive adjudication of rights of any
party has yet been undertaken.
36. Therefore, if third parties are permitted to enter such
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proceedings by carving out exceptions unsupported by the statutory
framework, the same would not only prejudice the legislative intent
underlying Section 9 but would also render proceedings of the present
nature cumbersome, protracted, and unmanageable by impermissibly
expanding their otherwise limited scope.
37. Now adverting to the judgments relied upon by the Applicant,
this Court finds that the decision of the Bombay High Court in
Prabhat Steel Traders Pvt. Ltd. (supra) came to be rendered in an
altogether distinct factual as well as procedural backdrop, and is
therefore clearly distinguishable from the present case. The
proceedings before the Bombay High Court arose under Section 37 of
the A&C Act, wherein a challenge had been laid to an order passed by
the learned Arbitral Tribunal on an application under Section 17 of the
Act.
38. In that case, the subject matter claimed by the Petitioners
therein was prima facie distinguishable and discernible from that of
the other contesting parties. In the present case, however, the subject
matter appears to be common, and the claims projected by the
Applicant are asserted to be competing with those of the Petitioner.
Further, in Prabhat Steel Traders Pvt. Ltd. (supra), the interim
decision under challenge directly operated against the Petitioners
therein. In the present matter, by contrast, the Applicant is not directly
proceeded against, but merely asserts that it is incidentally affected by
the adjudication of claims arising out of an independent arbitration
agreement between the existing parties.
39. The reliance placed by the Applicant upon the aforesaid
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judgment is, therefore, misplaced. Apart from the fact that the said
decision is not binding upon this Court, the principles noticed therein
arose in a materially different factual matrix and in the context of a
different statutory provision. The same cannot be mechanically
extended to proceedings under Section 9 of the A&C Act, where the
issue falls to be examined on an entirely different statutory footing.
40. Further, insofar as certain observations made therein concerning
Section 9 proceedings may suggest that every third party, whether
directly or indirectly affected, must necessarily be impleaded and
heard before any interim order is passed, this Court, with utmost
respect, is unable to subscribe to such a broad proposition. Such a
view, if accepted as a matter of general practice, would fail to account
for the provisions of the statute, the limited and urgent nature of
Section 9 jurisdiction, the summary character of such proceedings, and
the serious practical consequences that may ensue if unrestricted
intervention by third parties were routinely permitted.
41. Similarly, the reliance placed by the Applicant upon the
judgment of the High Court of Jammu and Kashmir in Mohammad
Ishaq Bhat (supra) is equally misplaced, inasmuch as the factual
matrix therein was entirely distinguishable from that of the present
case.
42. In the said matter, the Court was concerned with a situation
where a person had already instituted independent civil proceedings
and had secured an interim order in his favour from a competent
Court, the efficacy whereof was alleged to be threatened by a
subsequent petition under Section 9 of the A&C Act filed between the
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parties therein. It was in those peculiar and exceptional circumstances
that impleadment came to be permitted. Clearly, the rights sought to
be protected in that case flowed from a subsisting judicial order passed
by a competent forum, and any attempt to circumvent or render
nugatory such an order would necessarily stand on an altogether
different footing. The said decision, therefore, affords no assistance to
the Applicant in the facts of the present case, where no such prior
judicial protection is shown to exist.
43. At this stage, this Court deems it appropriate to take note of
some judicial pronouncements concerning the nature and scope of
proceedings under Section 9 of the A&C Act, particularly where third
parties seek participation, intervention, or impleadment in any form.
44. A Coordinate Bench of this Court in National Highways
Authority of India (NHAI) v. China Coal Construction Group
Corpn.11, while dealing with a claim for intervention, made the
following observations:
"15.5 Question Nos. 3 & 4.
(3) Whether the Intervenor can be impleaded as a party in the
petition (OMP 351/2004) and
(4) Whether the Intervenor is entitled to seek clarification of the
order dated 25.01.2005 passed by this court?
In view of the discussion with regard to questions 1 and 2 above, it
becomes clear that the Intervenor has no privity of contract with
NHAI. It is also clear that the Intervenor is not a party to the
arbitration proceedings. Section 9 of the Act is with reference to
arbitral proceedings just as the Intervenor cannot be a party in the
arbitral proceedings pending between NHAI and China Coal, it has
no locus standi in the present proceedings. The interim orders that
may be passed under Section 9 or Section 17 are with respect to the
parties to the arbitration and in connection with the subject matter
thereof. As such, the Intervenor's application under Order 1 Rule
10 cannot be allowed and nor can its application for modification
11
2006 SCC OnLine Del 115
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of the order dated 25.01.2005, which order, in any event, stands
merged in the order being passed herein."
45. The aforesaid observations lucidly reiterate that a person who is
neither privy to the contract nor a party to the arbitration proceedings
cannot ordinarily claim participation in proceedings under Section 9 of
the Act.
46. Similarly, a Division Bench of the Gujarat High Court in Vijay
Arvind Jariwala v. Umang Jatin Gandhi12 made certain pertinent
observations, the essence whereof is that proceedings under Section 9
are intended to operate between parties to the arbitration agreement
and are not designed to accommodate third parties asserting
independent claims. The relevant portion of the said judgment reads as
follows:
"8. It was in the above proceedings of Section 9 that the petitioner
herein filed application Exhibit 49 on 4.9.2021. In the said
application filed under Order I Rule 10 of the Civil Procedure
Code, 1908, the petitioner prayed to join two parties as
respondents-one Falguni Sandip Naik as respondent No. 2 and
Sandip Balwantrai Naik as respondent No. 3. The petitioner stated
that the firm Blue Feathers gave to said Falguniben unsecured loan
of Rs. 4,26,35,000/- by cheque and Rs. 2,54,00,000/- by cash.
Falguniben was wife of the partner Sandip Balwantrai Naik-the
erstwhile partner who had retired from the firm as stated above. It
was stated that these amounts were paid during the years 2011 to
2014. Out of the said total amount given unsecured loan, Rs. 19
lakhs by cheque and Rs. 1,75,10,000/- by cash were repaid to the
firm by said Falguniben, and the remainder amount was required to
be recovered.
*****
15. In light of the prayer of the petitioner seeking to join the
proposed respondents who were third parties in the proceedings of
Section 9 of the Arbitration Act, the question in principle arises that
whether a third party who is not party to the arbitration agreement,
could be impleaded as parties. In the present case as seen above,
12
2022 SCC OnLine Guj 2648
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respondent partner in the proceedings of Section 9 initiated by
other existing party, wants to join Falguni Naik and Sandip
Balwantrai Naik on the ground that the partnership firm had certain
dealings and transactions with them and in that context they were
required to be joined in the proceedings of the interim measures
initiated by the respondent existing partner.
16. The Arbitration Act, 1996 is a special Act, designed to provide
machinery in law to facilitate the disputes between the parties till
the process of arbitration. The parties who have entered into
arbitration agreement, are entitled to seek constitution of arbitral
tribunal in accordance with the provisions of the Act. The
provisions of Arbitration Act, 1996 are made to apply to the parties
who are bound by arbitration clause and their relationship in the
resolution of disputes between them, in the process of arbitration is
governed by the provisions of the Act.
17. Section 9 of the Act enables a party to seek interim measures
before or during a arbitral proceedings, which are intended inter
alia to balance the rights between the parties who would subject
themselves to arbitral proceedings for resolution of disputes, until
such disputes are decided by arbitrator. In the Act the term „party‟
is defined in Section 2(h) to mean a party to an arbitration
agreement. When the statutory provisions under the Act are acted
upon between the parties, they are the parties with the arbitration
agreement.
18. In relation to the aspect as to whether in the proceedings of
appointment of arbitrator under Section 11 read with Section 7 of
the Act, who could be the parties that may be impleaded as
respondent, the law has found a definite exposition. Section 7 deals
with the arbitration agreement which means an agreement between
the parties to submit to arbitration the disputes, whereas Section 11
is about appointment of arbitrators. In Deutsche Post Bank Home
Finance Limited v. Taduri Sridhar [(2011) 11 SCC 375] there was
tripartite housing development agreement with developer as
guarantor. Inter se dispute arose between the guarantor and the
borrower in respect of the construction agreement and in that view
arbitration clause was invoked. It was held that the lender was not
party to the arbitration agreement, could not have been impleaded.
The order of appointment of arbitrator the same related to the
lender was set aside and to the extend it related to disputes between
borrower and lender was upheld.
19. Similar proposition was laid down in other decisions in Jagdish
Chandar v. Ramesh Chandar [(2007) 5 SCC 719], Yogi Agarwal
v. Inspiration Clothes & U, [(2009) 1 SCC 372], S.N. Prasad v.
Monnet Finance Limited [(2011) 1 SCC 320], that a person who is
not party to the arbitration agreement, if impleaded as party in the
petition under Section 11 of the Act, the court should delete such
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party or while accommodating arbitrator it should make clear that
arbitrator will decide only disputes between the parties to the
arbitration agreement.
20. It is the „party‟ defined under Section 2(h) of the Act which
may initiate proceedings under Section 9 for interim measures. The
very basis of Section 9 proceedings is the arbitration clause under
which the arbitration proceedings could be initiated. The interim
measures could be prayed for and would operate between the
parties who would be going for or have gone, for arbitration,
namely the parties to the arbitration. By analogical reasoning it
would imply that third party has no concern with the proceedings
of Section 9 nor with the said provision recognizes the inclusion of
the third party, who may be independently claiming the rights
against the parties to the arbitration and vice versa.
21. In Firm Ashok Traders (supra) in which the Supreme Court
considered the question of nature of and maintainability of
application Under Section 9 in view of the Section 69 of the
Partnership Act, 1932 when filed by partner of unregistered firm,
inter alia observed that an application under Section 9, under the
scheme of the Arbitration Act, 1996 is not a suit, though the
application may result into initiation of civil proceedings. The
Supreme Court observed that „the right conferred by Section 9
cannot be said to be one arising out of contract. The qualification
which the person invoking jurisdiction of the court under Section 9
must possess is of being a „party‟ to an arbitration agreement.‟ It
was further observed, „a person not party to an arbitration
agreement cannot enter the court for protection under Section 9‟.
22. The position of law that the proceedings under the Arbitration
Act which would include the proceedings under section 9
proceedings are confined between the parties to the arbitration
agreement stand buttressed also by decision of the Supreme Court
in the context of section 11(6) of the Act. It was held in S.N.
Prasad, Hitek Industries (Bihar) Limited v. Monnet Finance
Limited [(2011) 1 SCC 320] in the context of section 7 and 11 of
the Arbitration Act, 1996, that a guarantor cannot be made a party
to a reference to arbitration and subjected to arbitration award, who
was not party to loan agreement contained in the arbitration clause.
In that case, there was arbitration agreement between the lender,
borrower and one of the guarantors and it was held that it could not
be deemed or construed to be arbitration agreement in respect of
another guarantor in a party to arbitration agreement. In the
proceedings of section 11, a person who is not a party to the
agreement, has no association in eye of law. On the same footing, a
third party cannot be a party in the proceedings under section 9 of
the Act for interim measures wherein by very nature of the
proceedings, third party cannot be said to have a legal participatory
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right."
(emphasis supplied)
47. In sum and substance, in the considered opinion of this Court,
third parties ordinarily cannot be permitted to enter the house of
arbitration through its window when the doors stand closed both by
statute as well as by the consensual arrangement of the parties. Unless
such persons are shown to be direct and legally recognisable parties to
the arbitration agreement, or persons claiming through or under such
parties in a manner known to law, they cannot seek ingress into
arbitral proceedings merely on the basis of collateral, incidental, or
independent assertions of right.
48. To hold otherwise, and to permit any person asserting separate,
collateral, or independent claims to intrude into arbitral proceedings,
including proceedings under Section 9 of the A&C Act, which are
interim, temporary, and circumscribed in their object, would be
wholly counterproductive to the very purpose of the enactment. Such a
course would unsettle the basic foundation and carefully structured
architecture upon which the arbitral framework rests, namely, party
autonomy, consensual jurisdiction, procedural expedition, minimal
judicial interference, and the efficient resolution of disputes within the
boundaries chosen by the contracting parties themselves.
49. Lastly, this Court notes that the present application seeking
impleadment has been filed under Order I Rule 8A of the CPC. This
Court has reservations as to whether the said provision is at all
attracted in the facts of the present case.
50. Order I Rule 8A of the CPC is ordinarily intended to enable a
person or body of persons interested in "any question of law" directly
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and substantially in issue in a suit, and where "public interest" so
requires, to present its opinion on such question of law, subject to the
permission of the Court and to such extent as the Court may specify.
In the present case, however:
a. The Applicant seeks impleadment in furtherance of its own
asserted private commercial interest, and not in public interest;
b. The relief sought is not confined to assisting the Court on a pure
question of law, but substantially seeks adjudication of factual
and proprietary claims; and
c. The present proceedings themselves arise under a special statute
governing arbitral remedies, whose scope cannot be enlarged by
resort to a general procedural provision in a manner contrary to
the legislative scheme.
51. On that ground too, this Court would opine that the present
application would not be maintainable under the provision sought to
be relied upon.
52. In view of the foregoing discussion, this Court is of the
considered opinion that I.A. No. 11046/2026 is wholly devoid of merit
and does not disclose any legal basis warranting impleadment or
intervention in the present proceedings. The same is, accordingly,
dismissed.
53. Consequently, the connected applications being I.A. No.
11015/2026 and I.A. No. 11047/2026 shall also stand dismissed.
O.M.P.(I) (COMM.) 88/2026, I.A. 6052/2026 (For ad-interim
relief), I.A. 6053/2026 (For Exemption)
54. Ms. Aanchal Tandon, learned counsel appearing on behalf of
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the Petitioner, submits that the statements made on behalf of
Respondent No. 1, as recorded by this Court in the Order dated
11.03.2026, have not been complied with till date.
55. Learned counsel for the Petitioner draws the attention of this
Court to the Order dated 11.03.2026, and in particular to Paragraphs 2
and 3 thereof, wherein learned senior counsel appearing for
Respondent No. 1 had made a categorical statement that an affidavit
would be filed disclosing the particulars specified therein. The said
paragraphs are reproduced below for ready reference:
"2. Learned Senior Counsel, Mr. Bhandari, who appears on
advance notice for the Respondent No. 1 submits that he will be
filing an affidavit disclosing therein all the commercial transactions
that are currently being undertaken by the Respondent No. 1,
including the Agreement entered into with the Respondent No. 2.
3. Learned Senior Counsel appearing on behalf of the
Respondent No. 1 also submits that the affidavit will be filed by all
the Directors of the Respondent No. 1 Company and will also set
out therein the receivables from any commercial arrangement of
whatsoever nature that the Respondent No. 1 has entered into and
that any amounts received as a result of the same, would first be
deposited in this Court, in an account that may be opened by the
Worthy Registrar General for the said purpose towards the
satisfaction of the admitted liability."
56. Learned counsel appearing on behalf of Respondent No. 1
submits that the affidavits, as contemplated in Paragraphs 2 and 3 of
the aforesaid Order, shall be filed and brought on record within a
period of one (01) week, and no further extension shall be sought. He
further submits that he shall ensure due compliance with the
statements and assurances recorded by this Court.
57. Respondent No. 1 is accordingly directed to comply with the
aforesaid statements and undertakings within a period of one (01)
week from today.
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58. List on 08.05.2026.
HARISH VAIDYANATHAN SHANKAR, J.
APRIL 22, 2026/tk/DJ
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