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Power Of Arbitrator To Implead Third Party In Proceedings

Arbitration is based on the Arbitration and Conciliation Act 1996.

SEC 2 (1):
  1. "Arbitration" is any litigation conducted or not by a permanent arbitral tribunal.
  2. Arbitration Agreement means an agreement referred to in Section 7
  3. Arbitral tribunal means a single arbitrator or panel of arbitrators
  4. Party means a party to a litigation agreement
So generally arbitration proceedings are between parties who have entered the arbitration agreement, a third party cannot enter proceedings expect as per the conditions given in case of MTNL Vs Canara Bank. This article is about power of arbitrator to implead third party in proceedings.

Powers of Arbitrator:

Power to take interim action
Pursuant to Section 17 of this Act, interim action may be sought before the Arbitration Tribunal at any time during the arbitration proceedings or after the arbitral award has been made.

The Arbitration Tribunal has the power to take an interim action in this regard:
  • The appointment of a parent to a minor or mentally ill person;

For protection:
  • Interim custody and sale of goods subject to arbitration;
  • Securing the disputed amount in litigation;
  • Withholding, restraining or inspection of any property or objects subject to mediation;
  • Appointment of receiver;
  • Such other interim measures are required in the eyes of the court.

Cases Regarding Power Of Arbitrator To Implead Third Party.
Madras High Court

Mr.V.G.Santhosam vs Mrs.Shanthi Gnanasekaran on 24 February, 2020[1]
101. There are no clear provisions in the Arbitration Act for the enforcement of a third party. There is not even a provision that can be found by law. Following the judgment of the Supreme Court in the case of Chloro Controls India (P) Ltd., CMANos.4465, 4467 to 4469 2019, if the Arbitrator requests an individual to effectively resolves disputes under the Arbitration Act.

Justice Subramaniam said the court had no hesitation in concluding that the arbitrator had exercised additional jurisdiction beyond the provisions of the Arbitration Act and the scope of the contractual proceedings. Prejudice refers to a person involved in a dispute under the Arbitration Act, 1996 and the Arbitration Agreement under the jurisdiction of the Arbitration Tribunal "shall have no application."

The impact of the application of this theory will lead to the exercise of the inherent powers of the court. Therefore, the rights of a third party to the Arbitration Agreement cannot be judged at the subsequent or final hearing of arbitral proceedings.

  1. C.M.A.Nos.4465, 4467 to 4469 of 2019

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