Supreme Court Says Non-Signatories Cannot Attend Arbitration Proceedings, Upholds Confidentiality

The Supreme Court set aside a Delhi High Court order allowing non-signatories to an arbitration agreement to attend arbitral proceedings, holding it violated the confidentiality mandate in Section 42A of the Arbitration and Conciliation Act.

The Court said arbitral proceedings bind only parties to the agreement and those claiming under them, and strangers cannot be permitted to observe.

It added that once an arbitrator is appointed under Section 11(6), the court becomes functus officio and cannot issue further directions. Rejecting reliance on Section 151 CPC, the Bench imposed ₹3 lakh costs on the respondents.

[Kamal Gupta & Anr. v. M/s L.R. Builders Pvt. Ltd. & Anr.]