TaxTMI 
TaxTMI 
2026 (4) TMI 753
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.... Act. The jurisdiction under Section 37 is one that entails an exhaustive listing of permissible appeals, which are a creature of statute. Impleadment of a party would not constitute an interlocutory protective measure as envisaged under Section 17 of the Act. 3. However, the basis on which this Petition is sought to be pursued is that the Respondents in this Petition led by Raju V. Shah (for convenience, collectively termed ("Raju") filed an Application before the Learned Arbitral Tribunal seeking impleadment of trustees of a certain trust, among others, invoking Section 17 of the Act. The Learned Arbitral Tribunal had also been presented with another Application under Section 17 of the Act, and these came to be collectively disposed of by way of the Impugned Order dated April 29, 2024. Therefore, the Petitioners led by Mayank J. Shah (for convenience, collectively termed "Mayank"), would contend that since the measure adopted by the Learned Arbitral Tribunal and indeed the measure sought by Raju, both invoke Section 17 of the Act, the appellate review under Section 37(2)(b) is indeed available. 4. Disputes between Mayank and Raju relate to control and management of a limite....
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.... well-settled principle of appellate jurisprudence that the right to appeal is determined by what the trial Court "did or purported to do" and not what it "ought to have done". Therefore, he would submit that while the decision may be one of joinder, since Raju sought the joinder as a protective measure invoking Section 17 of the Act, and the Learned Arbitral Tribunal too purported to take the decision under Section 17 of the Act, and even repelled Mayank's contention that a joinder cannot be pursued under Section 17 of the Act, an appeal under Section 37 would indeed be maintainable. 9. Therefore, Mr. Jain would contend that an appeal against an order purportedly passed under Section 17 would be maintainable even if the Learned Arbitral Tribunal was legally incorrect in invoking that provision. He would contend that the power purportedly exercised under a certain provision, which brings within its scheme a statutory right to appeal cannot be left without a check and balance, in the teeth of a statutory right to appeal. 10. Towards this end, Mr. Jain would rely upon a judgement of a Learned Division Bench of this Court in Antikeros [Antikeros Shipping Corporation v. Adani Ent....
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....f the arbitral tribunal, with costs. Mayank would rely on this position to indicate that the appeal under Section 37 of the Act is maintainable. 12. A few words on first principles would be in order. The application for joinder is not really an application for joinder of a non-signatory party to the arbitration agreement. The application was necessitated in the context of the peculiar position adopted by Mayank years into the arbitration, based on a declaration of the Trust made by Raju in 2019. Under Section 5 of the Limited Liability Partnership Act, 2008 ("LLP Act"), an individual or a body corporate may be a partner of the LLP. Therefore, natural persons or artificial legal persons alone can be partners. This is quite similar to the position in law for being a member of a company - indeed, the LLP itself is a body corporate and an artificial legal person under Section 3 of the LLP Act. 13. As a partner of the LLP, Raju is admittedly a party to the arbitration agreement. In 2019, Raju had indicated that the benefit of his shareholding in the LLP constitute trust property for the benefit of his son, the beneficiary of the Trust. No issue was raised contemporaneously about t....
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....volved in the arbitration proceedings. Therefore, even treating the Impugned Order as an interlocutory measure of protection rather than a conventional order on joinder i.e. even treating the challenge as being maintainable, in my opinion the challenge is totally devoid of merit. 17. I am conscious about the stage at which these proceedings have been brought to this Court. All observations in this judgement are in furtherance of considering the merits of the challenge at this stage and are not intended to be final declarations of adjudication, which squarely fall within the domain of the Learned Arbitral Tribunal, which in turn, has indeed reserved adjudication on these issues for a later stage. 18. The dispute between Mayank and Raju are about ownership, control and management of the LLP. Raju appears to have created the Trust in November 2018 and intimated the LLP in June 2019. Mayank claims that Raju had ceased to be a partner in the LLP and it was only due to oversight that the LLP did not give effect to the purported cessation of Raju's partnership until much later, but that nevertheless Raju had become disentitled to participate further in the arbitral proceedings. 1....
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....dual capacity, or participate in his capacity as a trustee of the Trust, considering the provisions of Section 35 of the Act. 22. In other words, the Learned Arbitral Tribunal did not give a definitive answer on whether only the profits had been assigned or a share in the LLP had been assigned, and left that issue open. Towards that end, it stated that for adjudication of the same, the trustees should be allowed to participate, in keeping with the principles of natural justice, fair play and good conscience. This is what is objected to in the Appeal on the ground that such a direction is wholly without jurisdiction and that Arbitral Tribunals have no power whatsoever to grant such relief to a third party to become a claimant - even while it may be possible to make a non-signatory party a respondent. 23. Specifically, in allowing the Interim Application, the Learned Arbitral Tribunal has permitted the following:- "24. At the stage when the Trust was formed, and assignment was made - the Claimant was the only Trustee. The Applicant No. 2 has been added as a Trustee later on. It is settled law, the Trust properties can be held in the name of any one or more of the Trust....
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....nces on the constitution of the LLP and the inter se rights of the parties. In the Impugned Order, the Learned Arbitral Tribunal has extracted from its order dated September 27, 2023, granting protection on this very point. 27. Even with the Impugned Order, one cannot lose sight of Mr. Kapadia's valid point that although the Impugned Order was passed on April 29, 2024, an Interim Application in the captioned proceedings had been served on Raju only on May 6, 2025, and that too without serving the captioned Petition which had already been dismissed for non-removal of objections. Various further actions have already transpired before the Learned Arbitral Tribunal between April 29, 2024 and May 6, 2025. During this period of 13 months, the Petition had not even been served on Raju, and was even dismissed and came to be restored without prejudice to the rights and contentions of the parties. The jurisdiction invoked being interlocutory in nature (Section 17 of the Act) even this delay is relevant for equitable considerations in adjudicating this Petition. No case for any interference is warranted. 28. As stated earlier, all my observations in this judgement are prima facie observ....