Non-parties can only be added to an arbitration under exceptional circumtances

The Hon’ble Karnataka High Court has held that non-parties to an agreement can only be added to an arbitration under exceptional circumstances.

The Court held,

“12.6. The sanctity of arbitration is required to be limited to the parties to the agreement, and even a signatory to the agreement could stand on a different footing and would not be a party to the agreement.

12.7. However, there is no particular dispute as regards the arbitration Clause inasmuch as even respondents do not dispute that respondent No.3 is a party to the arbitration Clause.

12.8. In that view of the matter, I answer point No.2 by holding that arbitration could be only between parties to the Arbitration Agreement; non-parties cannot be made parties to the arbitration unless exceptional circumstances exist. In the present matter, the arbitration is to be between the petitioner and respondent No.3, and respondents No.1 and 2 cannot be parties to such Arbitral Proceedings.”