THE AUTHOR:
Sagar Agrawal, Commercial Dispute Resolution & Arbitration Advocate
An arbitral tribunal is a creature of consent. A signature is the clearest evidence of that consent, but it is not indispensable. Indian law now recognises two different ways by which a person who has not signed an arbitration agreement may nevertheless be brought within the arbitral process. First, a non-signatory may be held to have been a party all along (a “veritable party”) because its conduct shows consent to arbitrate. Second, a person may remain a genuine stranger but still have its property or rights affected by an interim measure. The first raises the question of jurisdiction and the second, of remedial reach.
One might argue that the first category does not involve a third party at all because if the non-signatory is truly a veritable party, an order joining it is merely an order against someone who was always bound by the arbitration agreement. But that conclusion depends on the joinder decision being correct. If it is wrong, the order binds a genuine stranger. In that sense, the joinder order itself can operate as an order against a third party.
The First Route: Who Decides that a Non-Signatory Is Bound?
The Constitution Bench in Cox & Kings v. SAP India (2023 INSC 1051) held that a non-signatory may be bound where its conduct demonstrates an intention to arbitrate. On the question of who decides that a non-signatory is bound, Cox & Kings holds that at the referral stage, a court will prima facie consider whether the non-signatory is a veritable party, while the tribunal can undertake the fuller inquiry under Section 16 of the Arbitration and Conciliation Act, 1996 (“the Act”). What that division of labour actually requires has since become uncertain.
In Adavya Projects v. Vishal Structurals (2025 INSC 507), the Supreme Court reinforced the tribunal’s role and held that a non-signatory could be joined even if it had not received the notice invoking arbitration and was not before the referral court. Two weeks later, ASF Buildtech v. Shapoorji Pallonji (2025 INSC 616) (“ASF”) went in the opposite direction. The apex court separated formal “existence of the arbitration agreement” from its “existence qua the non-signatory”, treating the latter as a substantive inquiry into consent and outside the referral court’s narrow task under Section 11(6-A) (paras. 90–94). It further said that even if Cox & Kings gave the referral court discretion to decide veritable-party status, it should “refrain but rather loathe” exercising it (para. 95). The court concluded that referral courts should “refrain altogether” and leave the issue to the tribunal in the first instance (para. 102).
Seven months later, a different approach again emerged in Hindustan Petroleum Corporation Ltd. v. BCL Secure Premises (2025 INSC 1401) (“HPCL”). The Supreme Court held that, at the referral stage, the court should be prima facie satisfied not only that an arbitration agreement exists, but also that the non-signatory sought to be referred to is a veritable party to it (para. 25). Such a prima facie demonstration was described as “primordial”, and the Court rejected the suggestion that the referral court had been altogether deprived of jurisdiction to undertake that inquiry (para. 26). It held that the referral court may therefore inspect and scrutinise the dealings between the parties to determine whether the non-signatory can prima facie be treated as bound, although the exercise must remain limited and cannot become a mini-trial. (para. 27).
Two conflicts follow. First, ASF says the veritable-party inquiry is distinct from the referral court’s statutory task, and the court should refrain altogether. HPCL makes a prima facie inquiry into that very primordial question. ASF itself had acknowledged (paras. 97 and 105) that Cox & Kings states that the referral court will be required to prima facie rule on whether the non-signatory is a veritable party. Yet, despite expressly noting that proposition, ASF proceeded to hold that the inquiry falls outside the narrow remit of the referral court. There is, therefore, an apparent internal contradiction within ASF itself. HPCL also recognises and relies upon the formulation in Cox & Kings but does not confront this contradiction in ASF or explain why ASF, after noticing the very same proposition, nevertheless reached the contrary conclusion as to the referral court’s role.
Second, ASF expressly says that if the referral court cannot decide the issue, finds that the non-signatory is not a veritable party, or never had occasion to decide it, the tribunal may still examine the question (para. 106). HPCL, however, says the complete opposite: if the referral court returns a negative prima facie finding, the matter need not still be left to the tribunal, lest the referral court become a “monotonous automation” (para. 35). Despite these glaring inconsistencies, HPCL itself denies any conflict when confronted with ASF. It says that ASF is “in harmony” with the earlier authorities and “does not sing any discordant note” (para. 33) and describes ASF essentially as saying that a positive prima facie finding does not bind the tribunal after fuller inquiry (para. 34). But ASF addressed the negative case too, which went rather unnoticed.
That self-characterisation has understandably shaped the High Courts. In Space Master Realtors v. Mulund Sandhyaprakash CHS Ltd., the Bombay High Court noted that HPCL was later, Justice J.B. Pardiwala was common to both Benches, and HPCL itself had declared ASF harmonious, and it therefore treated HPCL as a clarification and applied its gatekeeping approach. By contrast, Sushil Khaitan v. Ajay Mittal (2026 SCC OnLine Cal 2307) continued to invoke ASF’s tribunal-first formulation. The conflict therefore survives at two levels: whether the referral court should decide veritable-party status at all, and whether a negative answer, once given, forecloses the tribunal.
The Second Route: How Far Can an Interim Order Reach?
The second route is conceptually different. The first concerns whether a seeming third party can itself be treated as bound by the arbitration agreement. Here, by contrast, the person remains a genuine stranger to it. The question is therefore not one of consent, but of remedial reach: can an arbitral tribunal under Section 17 issue an interim order that affects such a third party?
The inquiry should begin with Section 9 of the Act. The law there is comparatively settled and shows that, although only a party may seek interim relief, the order itself may in appropriate cases affect a non-party where that effect is merely ancillary to protecting the arbitration.
Three recurring situations explain the reach under Section 9:
- First, a subsequent transferee or a person claiming through or under an arbitral party may be restrained in relation to the very property in dispute.
- Second, property or money belonging to an arbitral party may be preserved or attached even though it is physically held by a third party on that party’s behalf.
- Third, an order directed at an arbitral party may have an incidental external effect, for example, through a receiver, attachment, or restraint concerning a bank guarantee. Girish Mulchand Mehta v. Mahesh Mehta (2009 SCC OnLine Bom 1986), Value Advisory Services v. ZTE Corporation (2009 SCC OnLine Del 1961), and Gatx India v. Arshiya Rail (2014 SCC OnLine Del 4181) illustrate the principle.
The corresponding limit is just as important. Section 9 is not a jurisdiction to adjudicate a stranger’s independent civil rights. A court should not use interim protection to destroy a pre-existing right belonging to the outsider merely because doing so would assist the arbitration. Shoney Sanil v. Coastal Foundations (2006 SCC OnLine Ker 38), for example, protected title independently acquired through a court sale. The inquiry is therefore not simply whether a third party is affected, but why it is affected and what right it asserts.
Blue Coast Infrastructure v. Blue Coast Hotels (2020 SCC OnLine Del 1897) (“Blue Coast”) brought these strands together. It said third-party orders under Section 9 are exceptional and justified where refusal might frustrate arbitral rights or defeat the object of arbitration. But it then drew a sharp institutional distinction (para. 27): while a court under Section 9 could reach a non-party, an arbitrator, being a creature of contract, could not venture outside the arbitration agreement to direct strangers.
That distinction had historical support. In M.D. Army Welfare Housing Organisation v. Sumangal Services (P) Ltd. (2004) 9 SCC 619, the Supreme Court described the Section 17 (pre-amendment) power as limited, holding that an interim order had to protect the subject matter and “may be addressed only to a party to the arbitration”. Gatx India carried the same distinction forward.
The statutory premise, however, changed in 2015. Section 17 was substituted so that a tribunal may grant the same categories of protection and “shall have the same power for making orders as the Court”; Section 17(2) makes those orders enforceable as court orders. In ArcelorMittal Nippon Steel v. Essar Bulk Terminal (2022) 1 SCC 712 (“ArcelorMittal”), the Supreme Court said the amendment was intended to clothe tribunals with the same powers to grant interim measures as courts under Section 9.
That exposed the weakness in simply carrying Blue Coast’s old divide forward. In Asad Mueed v. Hammad Ahmed (2023 SCC OnLine Del 820), a coordinate bench of the Delhi High Court held that, by virtue of the powers conferred under the Act, a tribunal has the authority and jurisdiction to frame interim measures necessary to preserve the subject matter of the arbitration. The Court rejected as misconceived the argument that a tribunal lacks such power, or that injunctions granted by it need not be taken into account by third parties. It placed particular emphasis on Section 17(2), which now treats a tribunal’s order as comparable to an order of a court and makes it enforceable under the Code of Civil Procedure in the same manner.
Parity, however, cannot mean jurisdiction over the world at large. The better limiting principle is therefore the nature of the outsider’s right; incidental external effect may be permissible, but the destruction or subordination of a vested independent right should not be.
State Bank of India v. Ericsson India (Civil Appeal Nos. 3613-3615 of 2018) (“Ericsson”), a short Supreme Court order dated 5 April 2018, marks that boundary. The tribunal, under Section 17, had restrained dealings with assets over which banks, strangers to the arbitration, already held security. The Court held that the tribunal had “no jurisdiction to affect the rights and remedies of the third party-secured creditors”. Mohammed Ali M. Sali v. Rajaram Chavan Real Estate (2026 SCC OnLine Bom 1772) applies the same instinct: legitimate rights already created in favour of flat purchasers could not be trampled by orders under Section 17.
The question has therefore reached the Supreme Court, but has not yet received a detailed, reasoned treatment in its post-2015 form. Ericsson is a brief two-page order directed to secured creditors. Arcelor Mittal establishes parity between Sections 9 and 17 but does not examine the reach of Section 17 against genuine third parties. More than a decade after the 2015 amendment, the broader boundary of a tribunal’s interim power vis-à-vis third-party rights remains largely unsettled.
Remedies for Persons Affected under Either Route
The remedies expose an odd asymmetry. A non-signatory joined as a veritable party may object under Section 16. If the tribunal rejects that objection, Section 37(2)(a) gives no immediate appeal. The party ordinarily has to continue and later challenge the award under Section 34.
The party unsuccessfully seeking joinder may be better placed. ERA Infra Engineering v. NHAI (2026 SCC OnLine Del 1199) and Hind Offshore v. OCS Services (2026 SCC OnLine Bom 3224) treat refusal of joinder as, in substance, acceptance of a jurisdictional plea and therefore appealable under Section 37(2)(a).
A genuine stranger affected by a Section 17 order is differently situated. Prabhat Steel Traders v. Excel Metal Processors (2018 SCC OnLine Bom 2347), followed in Mohammed Ali M. Sali, permits such a person to invoke Section 37 rather than be driven to a separate civil suit.
Need for Authoritative Clarification by the Supreme Court
Both themes need Supreme Court clarification. ASF and HPCL require reconciliation on the referral court’s role and the effect of a negative finding. The post-2015 reach of Section 17 deserves a reasoned Supreme Court judgment of its own: parity with Section 9 cannot mean that consent ceases to matter, but the pre-amendment proposition that a tribunal can never affect a stranger is also difficult to carry forward unchanged.
Arbitration begins with consent. The unsettled question is no longer simply who signed. It is who decides that someone consented, how far that decision may be revisited, and how far an interim order may travel before the independent rights of a genuine outsider stop it.
ABOUT THE AUTHOR
Sagar Agrawal is an India-qualified lawyer and a Senior Associate in the Commercial Dispute Resolution practice at Lakshmikumaran & Sridharan Attorneys. He graduated from ILS Law College, Pune, in 2023, and regularly handles commercial litigation and domestic and international arbitration across the infrastructure, construction, technology, telecom, electricity, aviation, and energy sectors. He has also authored legal scholarship that has been relied upon by the Supreme Court of India.
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