Arbitration award challenge limited to parties to the arbitration agreement; non-members lacked locus to invoke section 34.

Section 34 of the Arbitration and Conciliation Act, 1996 permits a challenge to an arbitral award only by a party to the arbitration agreement, as "party" under section 2(1)(h) means a party to that agreement. The Act's scheme confines the rights of initiation, participation, receipt of the award and challenge to such parties, and a third person cannot invoke section 34 merely because the award affects its interests. The court held that members of a co-operative housing society who were neither parties to the arbitration agreement nor to the arbitration proceedings had no locus standi to file the petition, which was therefore not maintainable.

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Issues: Whether members of a co-operative housing society, who were not parties to the arbitration agreement or the arbitral proceedings, could maintain a petition under section 34 of the Arbitration and Conciliation Act, 1996 to challenge the arbitral award.

Analysis: Section 34 permits an application to set aside an arbitral award only by a "party", and section 2(1)(h) defines party as a party to the arbitration agreement. The scheme of the Act confines the rights of commencement, conduct, challenge, receipt of award, and limitation to parties to the arbitration agreement. A third person or outsider cannot invoke section 34 merely because the award may affect his interests. The Act contains no provision enabling grant of leave to a non-party member to step into the shoes of the society for challenging the award. The authorities relied upon by the petitioners were distinguished as arising under the Arbitration Act, 1940 or on materially different facts.

Conclusion: The petitioners, being neither parties to the arbitration agreement nor parties to the arbitration proceedings, had no locus standi to file the section 34 petition; the petition was not maintainable.

Ratio Decidendi: Under the Arbitration and Conciliation Act, 1996, a challenge to an arbitral award under section 34 lies only at the instance of a party to the arbitration agreement, and a non-party cannot maintain such a challenge even if the award affects its interests.

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