Non-Signatories Have No Right to Attend Arbitration Proceedings

Name of the Case: KAMAL GUPTA & ANR vs. M/S L.R. BUILDERS PVT. LTD. & ANR. ETC.

Citation: 2025 INSC 975

Hon’ble Bench: JUSTICE P.S. NARASIMHA AND JUSTICE ATUL S. CHANDURKAR

Date: 13.08.2025

The Hon’ble Supreme Court held that a non-signatory to an arbitration agreement cannot be permitted to remain present in arbitration proceedings, as doing so would be contrary to the Arbitration & Conciliation Act, 1996 (“the Act”). The Hon’ble Court clarified that under Section 35 of the Act, the arbitral award only binds the signatories and any person claiming under said signatories. The Hon’ble Court emphasized that allowing non-signatories to remain present in the arbitration proceedings would breach confidentiality under Section 42A of the Act. The Hon’ble Court held that once an arbitrator is appointed under Section 11(6), the Court becomes “functus officio” and it cannot issue further ancillary directions. 

In this case, the dispute arose from an oral family settlement in 2015, which was later formalized in a MoU/Family Settlement Deed 2019 between Pawan Gupta and Kamal Gupta, which excluded Rahul Gupta. An arbitration clause was invoked under the MoU’s arbitration clause, wherein the Rahul Gupta, sought intervention, despite not being a signatory to the agreement. Initially, the Hon’ble Delhi High Court declined to allow the intervention application permitting non-signatory’s presence in the arbitration proceedings. However, at a later stage, after the referral and appointment of the arbitrator, the learned Judge reversed its stance and permitted the non-signatory to attend the arbitration proceedings, recognizing their interest in family properties. The Supreme Court overturned the decision of the Hon’ble Delhi High Court passed by the learned Judge, stating that permitting non-signatories to attend proceedings was held without jurisdiction and contrary to law.

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Adv. & solicitor Saju Jakob - Lily Thomas

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