By Viraj Thakur and Nida Adeel.
Viraj Thakur is a 4th Year student at NLSIU, Bangalore. His interests lie broadly in international commercial arbitration and commercial law.
Nida Adeel is a 4th Year B.A. LL.B (Hons.) student at the National Academy of Legal Studies and Research, Hyderabad.
The question of whether arbitral proceedings are inherently confidential remains unsettled across jurisdictions, dependent on the particular legal framework applicable. India, however, mandates a statutory duty of confidentiality through §42A of the Arbitration and Conciliation Act (“A&C Act”), inserted by the 2019 Amendment. The provision has been criticised since its inception (see here and here). Against this backdrop of a troubled provision along with a lack of judicial engagement, Kamal Gupta v. L.R. Builders (“Kamal Gupta”) was a rare opportunity to clarify the scope of §42A, since this provision was directly impugned. The Supreme Court of India (“SC’) was presented with a factual matrix that directly implicated the meaning of §42A, and with it, the chance to clarify the scope and underpinnings of the provision. However, holding that a ‘non-signatory’ is a ‘non-party’ and consequently, cannot be present in an arbitral proceeding which is confidential.
Thus, we advance a critique that the issue was one of ‘privacy’, and not ‘confidentiality’. Using the privacy-confidentiality distinction would have provided the Court with a coherent basis to decide on the exclusion of ‘strangers’ from arbitral proceedings, while avoiding an overbroad assertion that all ‘non-signatories’ lack participatory rights. In its approach, the court further conflated ‘non-signatories’ with ‘non-parties’, making its ratio legally unsound and against precedents.
Keywords:non-signatories, consent, confidentiality, privacy, section 42A
The question of whether arbitral proceedings are inherently confidential remains unsettled across jurisdictions, dependent on the particular legal framework applicable. India, however, mandates a statutory duty of confidentiality through §42A of the Arbitration and Conciliation Act (“A&C Act”), inserted by the 2019 Amendment. The provision has been criticised since its inception (see here and here). Against this backdrop of a troubled provision along with a lack of judicial engagement, Kamal Gupta v. L.R. Builders (“Kamal Gupta”) was a rare opportunity to clarify the scope of §42A, since this provision was directly impugned. The Supreme Court of India (“SC’) was presented with a factual matrix that directly implicated the meaning of §42A, and with it, the chance to clarify the scope and underpinnings of the provision. However, holding that a ‘non-signatory’ is a ‘non-party’ and consequently, cannot be present in an arbitral proceeding which is confidential.
Thus, we advance a critique that the issue was one of ‘privacy’, and not ‘confidentiality’. Using the privacy-confidentiality distinction would have provided the Court with a coherent basis to decide on the exclusion of ‘strangers’ from arbitral proceedings, while avoiding an overbroad assertion that all ‘non-signatories’ lack participatory rights. In its approach, the court further conflated ‘non-signatories’ with ‘non-parties’, making its ratio legally unsound and against precedents.
In 2019, members of the Gupta family executed a Memorandum of Understanding and Family Settlement Deed to resolve disputes over family properties. Rahul Gupta (“RG”), son of one of the principal parties, was not a signatory. When disputes arose, proceedings under §11(6) were initiated, and a sole arbitrator was appointed in March 2024. After disposal of the §11(6) proceedings, RG filed an application seeking permission to be present in the arbitral proceedings and, separately, to recall the order appointing the arbitrator. The High Court (“HC”) permitted their presence, either personally or through counsel. The SC reversed. Inter alia, it held that a non-signatory has no legal right under the Act to be present in arbitral proceedings, noting that §35 does not bind non-signatories to an award and that no provision confers on them a right of attendance. It held that permitting such presence would breach the confidentiality obligations imposed by §42A.
42A reads as follows:
“Notwithstanding anything contained by any other law for the time being in force, the arbitrator, the arbitral institution and the parties to the arbitration agreement shall maintain confidentiality of all arbitral proceedings except award where its disclosure is necessary for the purpose of implementation and enforcement of award.” (emphasis supplied)
Critics of the provision have argued that first, it eliminates party autonomy by imposing confidentiality as an inflexible statutory mandate (by the non obstante clause). It does not allow for situations in which parties may consent to the publication of awards or the disclosure of materials related to the arbitration, with necessary redactions (as with the ICC).
Second, its scope is undefined. The provision offers no guidance on what “confidentiality of all arbitral proceedings” encompasses. Moreover, its duty-bearers are underinclusive as the obligation binds the arbitrator, the institution, and the parties, but says nothing of witnesses, experts, or other such parties, all of whom may have access to the same sensitive information.
The provision is also silent on consequences for breach. The High Level Committee had proposed a more calibrated framework, with exceptions for legal duty, protection of legal rights, and challenges to awards. The legislature discarded this in favour of something that is simultaneously overbroad in its obligations and underspecified in its content.
In the absence of legislative reform and clarification, including in the proposed amendments under the draft A&C (Amendment) Bill, 2024, courts remain the primary mechanism through which the contours of §42A can be defined. This makes judicial engagement with the provision especially consequential, rendering Kamal Gupta particularly disappointing.
Arbitration is a creature of consent, and only the “parties” to an arbitration agreement are bound by it. §2(1)(h) defines a party as being a party to an arbitration agreement. §35 confirms that awards bind only parties and those claiming under them. However, does one need to sign an arbitration agreement to be a party to one?
The SC has not been blind to this tension. In Cox & Kings v. SAP India (2023), it held that non-signatories could in fact be “parties” in some circumstances. They would not be classified as parties claiming under or through a party. Instead, the circumstances surrounding a case must reflect the implicit consent of a non-signatory to be bound by an arbitration agreement. Implied consent theories attempt to identify entities that objectively manifest consent to arbitrate despite not signing the agreement. Thus, an entity need not sign an arbitration agreement to be a party to the same.
In contrast to this now well-settled jurisprudence, it is worth reproducing the specific operative paragraph from Kamal Gupta, as against the relevant statutory provisions:
Kamal Gupta (¶13, emphasis supplied) | A&C Act Analysis |
“By virtue of the order passed under Section 11(6) of the Act, the sole arbitrator is empowered to adjudicate the disputes between the signatories to the MoU/FSD.” | (6) “…a party may request the Supreme Court or, as the case may be, the High Court or any person or institution designated by such Court to take the necessary measure, unless the agreement on the appointment procedure provides other means for securing the appointment.” (emphasis supplied)
§11(6) clearly only refers to parties. As shown above, being a ‘party’ is not mutually exclusive with being a ‘non-signatory’. To imply that the sole arbitrator is empowered to only adjudicate disputes between signatories is incorrect. |
“Once it is clear that the arbitral award would not bind non-parties to the said MoU/FSD as such parties were not signatories to the said documents, there would be no legal basis whatsoever to permit a non-signatory to the MoU/FSD to remain present in the proceedings before the sole arbitrator… …arbitration proceedings can take place only between parties to an arbitration agreement and Section 35 of the Act does not make the arbitral award to be passed binding on non-signatories to such agreement…” | 35. “Finality of arbitral awards.—Subject to this Part an arbitral award shall be final and binding on the parties and persons claiming under them respectively.” (emphasis supplied)
There is nothing in the text of §35 to suggest that it does not apply to non-signatories that are parties. |
“…we do not find any legal right conferred by the Act that would enable a non-party to the agreement to remain present in arbitration proceedings between signatories to the agreement.” | Drawing from a reading of §§11(6) and 35, there is nothing to suggest the conclusion the SC draws, since proceedings do not necessarily have to be between signatories to the [arbitration] agreement. |
The SC in Kamal Gupta thus laid down an imprecise ratio that conflates the concepts of ‘non-signatory’ and ‘non-party’. To be clear, this does not necessarily mean that the applicants in Kamal Gupta ought to have been treated as parties to the arbitration agreement. The difficulty lies instead in the SC’s broader reasoning, which appears to treat non-signatory status itself as sufficient to deny participation, despite Indian arbitration jurisprudence recognising that a non-signatory may sometimes qualify as a party.
The central question in Kamal Gupta was whether a non-party could be present in arbitral proceedings. This is, at its core, a question of privacy: who may attend the hearing room. The Court, however, anchored its analysis in confidentiality: what information may be shared outside the proceeding.[1]
Privacy and confidentiality are distinct concepts. This is reflected in how institutional rules and national laws often treat them as separate concepts, providing for them differently. For instance, the 2013 UNCITRAL Rules provide that “[h]earings shall be held in camera unless the parties agree otherwise.” This provision addresses the “privacy” of hearings but does not expressly address their confidentiality. Conversely, the Indian framework now provides for confidentiality through §42A but not for privacy.
The SC missed the opportunity to distinguish between these two concepts. The distinction matters because the issue was fundamentally one of privacy. Treating the two as interchangeable obscures the analytical basis of the restriction being imposed. More importantly, a clearer separation between privacy and confidentiality could have supplied a more coherent doctrinal framework for future cases under §42A, a provision whose scope remains uncertain. If privacy had been recognised as the underlying interest at stake, courts may have been better placed to identify which kinds of information or procedural access genuinely warrant protection, rather than treating confidentiality as an undefined, catch-all restraint.
Had the SC engaged with this distinction, it could have reasoned as follows: arbitral proceedings are private, and this privacy interest (independent of any duty of confidentiality) justifies excluding strangers with no claim to be present. Common law jurisprudence along with international instruments/scholarly work could have been referenced. English law treats privacy as an implied term of the arbitration agreement itself: in Oxford Shipping v Nippon Yusen Kaisha, the privacy interest was treated as so fundamental that arbitrators could not even consolidate related hearings without the parties’ consent. The privacy-confidentiality distinction was explicitly drawn in Emmott v Michael Wilson & Partners , treating confidentiality as analytically distinct from privacy. Scholarship has pushed further still arguing that English law’s reliance on case-by-case development of this distinction is overdue for codification, because leaving privacy and confidentiality conflated invites the kind of doctrinal confusion the SC repeated here. Even where English law has kept the line judge-made rather than statutory, as the Law Commission’s 2023 review confirmed, courts have still been expected to draw it. The SC in Kamal Gupta had that same opportunity and did not take it.
[1] See David D Caron & Lee M Caplan, The UNCITRAL Arbitration Rules: A Commentary (2nd edn, OUP 2013), 36 (“Privacy is a long-established hallmark of international commercial arbitration”; “[h]owever, privacy, even if deeply established in custom, does not equate to confidentiality, which implicates a legal obligation to avoid public disclosure of sensitive information”); James H Carter & John Fellas, International Commercial Arbitration in New York (2nd edn, OUP 2016) 109. (“Arbitration ensures privacy in the sense that arbitral proceedings, unlike court proceedings, are and remain private. Confidentiality refers to restrictions on the disclosure that the parties or counsel can make regarding the arbitration”).
Kamal Gupta gave the SC an important chance to clarify §42A and the legal basis of confidentiality in Indian arbitration law. However, instead of providing clarity, the judgment blurred distinctions that Indian arbitration jurisprudence had already recognised. These distinctions matter because §42A remains broad and unclear, and courts currently play a major role in defining its scope. While the judgment resolves the dispute before the SC, it leaves the larger uncertainty around §42A unresolved.
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