### Confirming party lacks locus to invoke arbitration after nominating a third party as the primary vendee.

The Petitioner (Atlas Electric Industries) filed petitions under Section 9 (interim relief) and Section 11 (appointment of arbitrator) of the Arbitration and Conciliation Act, 1996, based on an Agreement to Sell dated 10.11.2021

Under the Agreement, Respondent No. 2 was the 'First Party/Seller' and Respondent No. 1 was the 'Second Party/Buyer'

The Petitioner was designated as the 'Confirming Party', having originally intended to purchase the property but subsequently nominating Respondent No. 1 as the financial partner/buyer

On 17.07.2025, the Court granted an interim stay against the sale of the property

Respondent No. 2 moved to vacate the stay, arguing the Petitioner lacked locus standi because it was merely a confirming party and not a party to the arbitration clause

1. Whether a "Confirming Party" to an agreement has the locus standi to invoke the arbitration clause if the clause expressly refers only to the rights of the 'First Party' and 'Second Party'.

2. Whether the Petitioner’s status as a signatory to the Agreement, despite being a non-beneficiary after nominating a buyer, entitles it to maintain petitions under Sections 9 and 11 of the Act.

The court primarily applied the principle of contractual interpretation of arbitration agreements under the Arbitration and Conciliation Act, 1996

It emphasized that the intention of the parties must be gathered from a holistic reading of the contract

It considered the precedent in Ansal Properties Infrastructure Ltd. Anr. v. Dowager Maharanis Residential Accommodation Welfare Amenities Trust Anr., which discussed whether a confirming party could be bound by or claim benefits of an arbitration clause

The Court examined Clause 15 of the Agreement, which stipulated that if the 'Seller' failed to perform, the 'Buyer' or its 'Nominee' could claim interest or seek specific performance via an arbitrator

The Court observed that upon the nomination of the Second Party, the Petitioner (Confirming Party) ceased to have any substantive role or interest in the transaction, effectively transferring its rights to Respondent No. 1

The Court reasoned that the arbitration clause did not expressly include the "Confirming Party" within the category of parties entitled to invoke proceedings

While the Petitioner cited Ansal Properties to argue that being a signatory is sufficient, the Court distinguished this by looking at the "conspicuous non-inclusion" of the Petitioner in the specific wording of the arbitration clause, concluding that the parties consciously intended to exclude the Confirming Party from the arbitral mechanism

Consequently, the Section 9 petition was declared non-maintainable and the interim order dated 17.07.2025 was vacated; the Section 11 petition for the appointment of an arbitrator was also dismissed as unsustainable. Both petitions and all pending applications were disposed of in favor of the Respondents