Case Note & Summary
The petitioners, who are members of Apsara Co-operative Housing Society Ltd., filed a petition under Section 34 of the Arbitration and Conciliation Act, 1996, challenging an arbitral award dated 19 March 2013. The award declared that an MOU dated 30 April 2008 between the respondent no. 1 (Heritage Enterprises) and the society was valid and enforceable, and directed specific performance. The petitioners were not parties to the MOU or the arbitration agreement. The respondent no. 1 raised a preliminary objection that the petitioners lacked locus standi to challenge the award. The court heard arguments on maintainability. The petitioners argued that they were members of the society and thus had an interest in the subject matter. The respondent contended that only parties to the arbitration agreement could challenge the award. The court held that under Section 34 of the Act, only a party to the arbitration agreement or a person claiming under such party can file a petition to set aside an award. Since the petitioners were not signatories to the MOU and did not claim under any party, they had no locus standi. The petition was dismissed as not maintainable.
Headnote
A) Arbitration Law - Locus Standi - Section 34 Arbitration and Conciliation Act, 1996 - Challenge to Arbitral Award by Non-Party - Petitioners, members of a cooperative society, were not signatories to the MOU containing the arbitration clause - Held that only parties to the arbitration agreement or persons claiming under them can challenge an award under Section 34 - Petition dismissed as not maintainable (Paras 1-10).
Issue of Consideration
Whether the petitioners, who are not parties to the arbitration agreement, have locus standi to file a petition under Section 34 of the Arbitration and Conciliation Act, 1996 challenging the arbitral award.
Final Decision
The petition is dismissed as not maintainable. The petitioners lack locus standi to challenge the arbitral award under Section 34 of the Arbitration and Conciliation Act, 1996.
Law Points
- Locus standi
- Party to arbitration agreement
- Section 34 Arbitration and Conciliation Act
- 1996
- Non-signatory cannot challenge award
Case Details
2014 LawText (BOM) (12) 55
Arbitration Petition No. 515 of 2013
Mr. Hiralal Thacker, Senior Advocate, a/w. Mr. Jeetendra Ranawat, Ms. Urvi Patel, i/b. Mr. Manoj Kadam for the Petitioners; Mr. P.K. Samdhani, Senior Advocate, a/w. Mr. Aashish Kamat, Mr. S.A. Oak, Mr. C.M. Jadhav, i/b. Mahesh Menon & Co. for Respondent no.1
Mukesh Nanji Gala, D. Venugopal, C.S. Srinivasan
M/s. Heritage Enterprises, Justice Arvind V. Savant (Retd.)
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Nature of Litigation
Petition under Section 34 of the Arbitration and Conciliation Act, 1996 to set aside an arbitral award.
Remedy Sought
Petitioners sought leave to file objections and to quash and set aside the arbitral award dated 19 March 2013.
Filing Reason
Petitioners, who are members of Apsara Co-operative Housing Society Ltd., challenged the arbitral award which declared an MOU between the society and respondent no. 1 as valid and enforceable.
Previous Decisions
The learned arbitrator passed the impugned award on 19 March 2013.
Issues
Whether the petitioners have locus standi to file a petition under Section 34 of the Arbitration and Conciliation Act, 1996 challenging the arbitral award.
Submissions/Arguments
Respondent no. 1 submitted that the petitioners were not parties to the arbitration agreement and thus cannot challenge the award.
Petitioners argued that they are members of the society and have an interest in the subject matter.
Ratio Decidendi
Only a party to the arbitration agreement or a person claiming under such party has locus standi to file a petition under Section 34 of the Arbitration and Conciliation Act, 1996 to set aside an arbitral award. Non-signatories to the arbitration agreement cannot challenge the award.
Judgment Excerpts
By this petition filed under section 34 of the Arbitration and Conciliation Act, 1996... the petitioners have prayed for leave to file this petition for raising their objections to the impugned award dated 19th March, 2013...
Mr.Samdani learned senior counsel for the respondent no. 1 submits that the memorandum of understanding which recorded an arbitration agreement was between the respondent no. 1 developer and M/s. Apsara Co-op. Hsg. Soc., Ltd... Petitioners are not parties to the said MOU.
Procedural History
The arbitration petition was filed on an unspecified date. The court heard arguments on maintainability on 28 November 2014 and pronounced judgment on 8 December 2014.
Acts & Sections
- Arbitration and Conciliation Act, 1996: 34
