Arbitration reference limited to parties to the invoked agreement; a non-party cannot be compelled into section 11 proceedings.

Section 11 arbitration power is limited to disputes governed by an arbitration agreement within the meaning of section 7 between the parties to that dispute. A non-party to the invoked arbitration clause cannot be impleaded and sent to arbitration merely because it has a separate arbitration arrangement with one contracting party. Where a section 11 petition seeks reference against both a contracting party and a stranger to the agreement, the court must exclude the stranger or confine the reference to disputes covered by the relevant arbitration clause. On the facts, the claims against the appellant arose, if at all, from a different loan agreement, so the reference could stand only against the developer.

---

---

Issues: Whether a non-party to the arbitration agreement could be impleaded and referred to arbitration in proceedings under section 11, and whether the existence of an arbitration agreement between the parties to the dispute is a condition precedent for appointment of an arbitrator.

Analysis: The power under section 11 can be exercised only when there is an arbitration agreement within the meaning of section 7 between the parties to the dispute. A person who is not a party to the contract containing the arbitration clause cannot be roped into that arbitration merely because another agreement between that person and one of the parties contains a separate arbitration clause. Where a petition under section 11 impleads both a contracting party and a non-party, the court must exclude the non-party or expressly confine the reference to disputes between the parties to the relevant arbitration agreement. Since the claims against the appellant arose, if at all, from a different loan agreement and were not covered by the construction agreement invoked for reference, no dispute existed between the first respondent and the appellant for the purpose of that reference.

Conclusion: A non-party to the invoked arbitration agreement cannot be made a party to the arbitration under section 11, and the reference was valid only as against the developer, not the appellant.

---