"I realise that some of my criticisms may be mistaken; but to refuse to criticize judgements for fear of being mistaken is to abandon criticism altogether... If any of my criticisms are found to be correct, the cause is served; and if any are found to be incorrect the very process of finding out my mistakes must lead to the discovery of the right reasons, or better reasons than I have been able to give, and the cause is served just as well." -Mr. HM Seervai, Preface to the 1st ed., Constitutional Law of India.

Monday, November 1, 2010

Scope of Jurisdiction to Award Interim Measures Vis-à-vis Third Parties (Part V)

We had in the past month written several posts relating to the jurisdiction of an adjudicatory authority to award interim measures against third parties, that is, persons who are not parties to the arbitration agreement. Most of the posts dealt with the jurisdiction of the arbitral tribunal vis-à-vis third parties. We had stated that the tribunal would have no jurisdiction to award interim measures against third parties because the arbitral tribunal would not have any jurisdiction against third parties. We had given justifications on this point. In this post, we take note of a recent Supreme Court decision that deals with the point that the arbitral tribunal would have no jurisdiction with respect to third parties.

Case:               SN Prasad v. Monnet Finance Ltd.
Case No.:        Civil Appeal No. 9224 of 2010 (Arising out of SLP (C) No. 17114/2008) and Civil Appeal No. 9225 of 2010 (Arising out of SLP (C) No. 17115/2008)
Court:              Supreme Court of India
Bench:             R.V. Raveendran and H.L. Gokhale, JJ.
We'll skip the facts but only summarize the law in the decision.
  1. A dispute between two parties can be referred to arbitration if both are parties to an arbitration agreement.
  2. In a dispute where some of the disputing persons are parties to the arbitration agreement and some are not parties to the arbitration agreement, reference to arbitration can only be regarding partiers to the arbitration agreement and not the "non-parties".
[By the way, check this link to the post in the Kluwer Blog on online mediation and low cost online arbitration. Don't forget to read the comment to that post.]

No comments: