Adavya Projects Pvt. Ltd. vs Vishal Structurals Pvt. Ltd. 2025 INSC 507 - Ss. 7, 11,16,21, Arbitration Act
Arbitration and Conciliation Act 1996 - Section 11,21 - A notice invoking arbitration under Section 21 of the ACA is mandatory as it fixes the date of commencement of arbitration, which is essential for determining limitation periods and the applicable law, and it is a prerequisite to filing an application under Section 11. However, merely because such a notice was not issued to certain persons who are parties to the arbitration agreement does not denude the arbitral tribunal of its jurisdiction to implead them as parties during the arbitral proceedings. (Para 40)
Arbitration and Conciliation Act 1996 - Section 11 - The purpose of an application under Section 11 is for the court to appoint an arbitrator, so as to enable dispute resolution through arbitration when the appointment procedure in the agreement fails. The court only undertakes a limited and prima facie examination into the existence of the arbitration agreement and its parties at this stage. Hence, merely because a court does not refer a certain party to arbitration in its order does not denude the jurisdiction of the arbitral tribunal from impleading them during the arbitral proceedings as the referral court’s view does not finally determine this issue. (Para 40)
Arbitration and Conciliation Act 1996 - Section 7,16 -The relevant consideration to determine whether a person can be made a party before the arbitral tribunal is if such a person is a party to the arbitration agreement. The arbitral tribunal must determine this jurisdictional issue in an application under Section 16 by examining whether a non- signatory is a party to the arbitration agreement as per Section 7 of the ACA.(Para 40)
Arbitration and Conciliation Act 1996 - Section 7- Non-signatories are parties to the arbitration agreement if the conduct of the signatories and non-signatories indicates mutual intention that the latter be bound by the arbitration agreement- the arbitration agreement must be in writing, the mutual intention of non-signatories to be bound by the arbitration agreement must be evidenced in writing. The non-signatory’s conduct in the formation, performance, and termination of the contract, and surrounding circumstances like direct relationship with signatory parties, commonality of subject-matter, and composite nature of transaction must be ascertained from the record of the agreement. (Para 36)
