Kamal Gupta vs L.R. Builders Pvt. Ltd 2025 INSC 975 - Arbitration - Non-Signatory Presence During Arbitration Proceedings

Arbitration and Conciliation Act 1996 - Section 42A - Whether it is permissible for a non-signatory to an agreement leading to arbitration proceedings to remain present in such arbitration proceedings? - The parties to the agreement being bound by the terms of the agreement and the sole arbitrator being required to resolve the disputes between parties to the agreement, a non-signatory to the agreement would be a stranger to such arbitration proceedings. Permitting a stranger to remain present in the arbitration proceedings especially when the award to be passed would not be binding on such stranger would be charting a course unknown to law. The remedy, if any, to a party who is not a signatory to the agreement is available under Section 36 of the Act if such award is sought to be enforced against him. The arbitrator, the arbitral institution and the parties to the arbitration agreement have to maintain confidentiality of all arbitral proceedings. The legislative intent behind maintaining confidentiality of information is quite clear. Permitting a stranger to the arbitration proceedings to remain present and observe the said proceedings would result in breach of the provisions of Section 42A of the Act. (Para 13-14) [SC held that, the permission granted to a non-signatory to remain present in all proceedings before the sole arbitrator is without jurisdiction as well as beyond the scope of the Act.]

Arbitration and Conciliation Act 1996 - Section 5, 11(6) - After appointment of an arbitrator under Section 11 (6), the Court becomes functus officio . (Para 23)