ABC purchased some machines from XYZ which were earlier given on lease to PQR Company. XYZ sold those machines to ABC after the lease period and since the management of PQR Company was not renewing the lease. But management changed in PQR Company and the new management did not want to leave the lease. There was an Arbitration clause in the lease contract between XYZ and PQR. Taking advantage of the arbitration clause in the expired lease deed, PQR filed an application under S.9 of the Arbitration and conciliation Act seeking some interim orders from the Court and included ABC also as a party. As per the settled law in India, only the parties to the Contract are bound by the Arbitration clause and the only exemption is for including the Banks which issued Bank Guarantee to any one of the parties, that too if the bank guarantee becomes the subject matter of the case. Hence the Court dismissed the Petition filed by PQR.
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