The Elusive Meaning of ‘Person Claiming Through or Under a Party’: Contractual v. Statutory Privity
Introduction
In Luxempire Realty Pvt Ltd v. Eminence Landmarks LLP (16 October 2025), a Division Bench of the Bombay High Court considered whether a subsequent transferee of property (the petitioner) could be impleaded in arbitration proceedings involving the transferor, who was party to an arbitration agreement. The transferor company had been impleaded as a non-signatory group company before the tribunal. The tribunal sought to join the petitioner under Section 16 of the Arbitration and Conciliation Act, 1996 (‘the Act’) on two distinct and independent grounds (the Party Issue): first, that the petitioner had impliedly consented to the arbitration agreement by purchasing the property with knowledge of pending arbitration proceedings (Ground 1); and second, that the petitioner was a person ‘claiming through or under’ a party (Ground 2). The Court rejected impleadment on both grounds, holding that the petitioners, as third parties, were strangers to the contract and derived no rights under it. The Court also considered whether the dispute concerning the existence of a charge over the property fell outside the scope of the arbitration clause (the Subject Matter Issue).
This article demonstrates that the court did not adequately distinguish between the separate considerations involved in identifying who is a ‘party’ to an arbitration agreement and who may be said to be ‘claiming through or under a party’. On the Party Issue, the court placed almost exclusive emphasis on the petitioner’s lack of consent and the absence of any common intention to be bound by the arbitration agreement. In doing so, the court overlooked the interpretive challenges that have emerged in other common law jurisdictions such as the United Kingdom, Singapore, and Australia regarding the statutory phrase ‘persons claiming through or under a party’, and the complexities of privity that arise from it. This is particularly significant given the interaction of this phrase with other (often conflicting) principles of arbitration such as party autonomy and consent on one hand, and the need to avoid multiplicity of proceedings, prevent conflicting awards, and ensure efficiency on the other.
Against this background, this article examines the implications of the judgment regarding the scope and meaning of the phrase ‘persons claiming through or under a party’ in the Act. It draws on decisions from other common law jurisdictions that have addressed similar questions. It argues that the issue turns on two competing interpretations of the phrase ‘claiming through or under’. The broader interpretation treats it as a statutory expansion of privity intended to avoid duplication of proceedings and ensure finality of awards. The narrower interpretation, by contrast, subordinates it to considerations of consent, contractual privity and party autonomy. The Bombay High Court in Luxempire tilts toward the narrower approach.
First, this article briefly discusses the decision in Luxempire (Part I). Second, it argues that the statutory phrase ‘persons claiming through or under a party’ effects a form of statutory privity, distinct from contractual privity (Part II). This distinction also informs how competence is allocated between courts and arbitral tribunals when determining joinder and the identity of parties to arbitration. While the Supreme Court in Cox and Kings v SAP India Pvt (2023) appears to have doubted the broader principle, it nonetheless recognised the ‘commercial efficacy’ underlying this statutory phrase. Lastly, this article argues that a broader, context-sensitive and purpose-oriented interpretation exemplified by the Australian High Court in Rinehart v Hancock Prospecting Pty Ltd (2019), is preferable (Part III).
I. The Holding in Luxempire v. Eminence in Brief
The petitioner argued that the phrase ‘persons claiming through or under’ is a consent-based construct, and imposing an obligation to arbitrate on a third-party purchaser would be inconsistent with contractual privity ([61]). To properly address this issue, it is necessary to first examine the statutory framework of the Act and its inherent limitations.
The case arose from a writ petition under Article 226 challenging the tribunal’s decision to implead the petitioner. Emphasising the exceptional nature of such review, the court clarified that a writ remedy against an arbitral tribunal is available only where there is a patent lack of inherent jurisdiction apparent on the face of the record. This is significant because Section 16 of the Act embodies the principle of kompetenz-kompetenz, which, as clarified by the Supreme Court in Adavya Projects v Vishal Structurals (2025) and ASF Buildtech Private Limited v Shapoorji Pallonji (2025) includes the tribunal’s power to implead non-signatory parties on its own motion. Further, Section 16(6) confines the remedy against any wrongful assumption of jurisdiction to a challenge under Section 34 after the award is rendered.
Nevertheless, the court held that the ‘exceptional’ standard for interference through a writ remedy was satisfied. It found no evidence of consent or intention on the part of the petitioner to be bound as a party to the arbitration agreement, applying the factors set out in Chloro Controls, ONGC v Discovery Enterprises and Cox and Kings. Accordingly, on Ground 1, the court rejected the argument that the purchase of property during ongoing arbitration proceedings was sufficient to demonstrate implied consent. This conclusion was strengthened by the court’s finding on the Subject Matter Issue that the principal contract was unrelated to the disputed property, since it was a purely financial agreement and did not create any charge or rights in that property. Consequently, the court concluded that the arbitration clause did not extend to the dispute in question.
II. Contractual Privity and Statuary Privity
Limits of Adavya Projects and ASF Buildtech
Now turning to the less settled aspect of the judgment, the court’s reasoning on Ground 2, namely, the scope and meaning of ‘persons claiming through or under a party’, is considerably unclear. As a general proposition, the court held that an arbitral tribunal lacks the power to implead a non-signatory unless that non-signatory has demonstrated consent to be bound as a ‘party’ to the agreement, which reflects the requirement of contractual privity (¶113). This proposition is supported by both principle and authority. In principle, the tribunal’s mandate is contractual and is derived from the consent of the parties to submit their disputes to arbitration. The contractual foundation of the tribunal’s jurisdiction justifies limiting its power of impleadment to situations where there is consent, either contained in the arbitration agreement itself or subsequently given. This approach is also reflected in various institutional rules concerning joinder. For instance, Rule 22.1(x) of the LCIA Rules requires consent of the parties for joinder, the ICC Rules require the tribunal to have prima facie jurisdiction over the additional party, Rule 18.1 of the SIAC Rules requires that the additional party be bound by the arbitration agreement, and Article 17(5) of the UNCITRAL Rules requires that the person being joined be a ‘party’ to the arbitration agreement.
In line with the UNCITRAL Model Law, the Act does not confer an express power of joinder. However, the Supreme Court in Adavya Projects and ASF Buildtech has recognised the tribunal’s power to implead those who are bound by the arbitration agreement as a ‘party’ under Section 2(1)(h). Consistent with Cox and Kings, the term ‘party’ under Section 2(1)(h) includes both signatories and non-signatories bound through implied consent. However, it does not include those persons ‘claiming through or under’. Accordingly, these decisions not only affirm the tribunal’s joinder powers under Section 16 but also delineate the limits of such powers, restricting impleadment to instances where express or implied consent to the arbitration agreement exists.
How, then, does the phrase ‘persons claiming through or under’ affect this proposition? Cox and Kings established that the concept of ‘party’ under Section 2(1)(h) of the Arbitration and Conciliation Act is distinct from persons claiming through or under a party (¶136). Overruling Chloro Controls on this point, the Supreme Court held that impleadment of non-signatories based on consent is grounded in the concept of ‘party’, not in the phrase ‘persons claiming through or under’. Thus, while contractual privity and consent govern who is to be joined as a ‘party’, it remains unclear whether the same requirement applies to ‘persons claiming through or under’.
A. ‘Persons Claiming Through or Under’ Are Not Necessarily Factual ‘Parties’ to the Arbitration Clause
Using H.L.A Hart’s ‘core’ and ‘penumbra’ framework, in its core instances the statutory phrase ‘claiming through or under’ has been applied to a liquidator seeking to avoid a company’s debt (Tanning Research Laboratories Inc v O’Brien, 1990), a trustee of a bankrupt’s estate, an assignee of a debt under a contract subject to arbitration (The Leage (1984)), an assignee seeking to enforce a contractual term (The Jay Bola (1997)), an insurer enforcing an insured party’s cause of action (New India Assurance Co Ltd (2005)), and a subrogated insurer (West Tankers Inc v Allianz Spa (2012)). Similarly, Cox and Kings recognised assignment, subrogation, and novation as typical instances falling under the phrase. This is because these relationships are considered as typical instances of a person holding a ‘derivative interest’ vis-à-vis a party to the agreement. However, these examples are not exhaustive, and instances of ‘penumbra’ exist. This raises the question of whether persons falling within the scope of the phrase necessarily come within the jurisdiction of an arbitral tribunal.
It is important to note that Section 35 of the Act makes an award binding on parties and persons claiming under them. However, this does not address the question of who is entitled to invoke the arbitration agreement or bound by it, that is, the positive and negative obligations under the agreement. As the High Court of English and Wales observed in PJSC National Bank Trust & Anor v Mints (2022), while entitlement to benefit from or be burdened by an arbitration agreement is essentially contractual, the question of who is bound by the award implicates public policy considerations such as finality (¶16). However, even the determination of who may enforce or be bound by an arbitration agreement is not purely concerned with contractual privity.
B. Assignment as a Demonstrative Case Study
Consider the case of an assignee. It is well settled that an arbitration agreement is assignable, and that assignment of a contract includes the arbitration clause (Khardah Company Ltd v Raymon & Co (1962); The Jay Bola). Consequently, the assignee may invoke the arbitration agreement. For example, the Bombay High Court in Siemens Factoring v. Future Enterprise (2022) held that an assignee could invoke the arbitration clause in the assigned contract for appointment of an arbitrator under Section 11(6) of the Act. Similarly, in DLF Power Limited v Mangalore Refinery (2016), this was recognised for a Section 9 application. Conversely, under common law, assignment generally transfers only benefits, not burdens, of a contract. Following the conditional benefits approach in English law, an assignee is bound to arbitrate only if it chooses to bring an action to enforce the assigned contractual right subject to arbitration. In such cases, the obligation to arbitrate is treated as a procedural precondition to enforcing a substantive right. This approach seeks to infer the assignee’s consent to arbitrate from its decision to initiate proceedings. There is, however, a strong argument based on the separability principle against the conditional benefit approach, favouring the recognition that an assignee is burdened to arbitrate whenever an arbitrable dispute arises, regardless of whether the claim is brought to exercise a contractual right or as a defence (Sea Master Shipping Inc v Arab Bank (2018), [36]).
An Assignee is not a Party to the Assigned Contract
Nevertheless, the settled common law position is that an assignment of contractual rights does not make the assignee a party to the contract (Aspen Underwriting Ltd v Credit Europe Bank NV (2020), [26]). Hence, whether the assignee invokes the agreement (under Section 8 or Section 11), or when the assignee is burdened with the arbitration agreement, there is no contractual privity between the assignee and the other party to the contract containing the arbitration clause. However, as seen above, it has been consistently held both by courts in common law jurisdictions that an assignee can be entitled to or burdened by the arbitration agreement in the main contract. This “conceptual difficulty” relating to the doctrine of privity that arises was acknowledged (but not answered) by the Singapore Court of Appeal in Rals International Pte Ltd v Cassa di Risparmio di Parma e Piacenza SpA (2016).
Commercial and Public Policy Rationales
There are other commercial considerations and public policy concerns which arise as well. Commercial parties often expect to deal with a known counterparty in arbitration. Party autonomy undoubtedly includes the choice as to whom to arbitrate the dispute with. Further, confidentiality is a core feature of arbitration, and commercial parties often choose arbitration precisely to avoid exposing disputes to those outside the contractual relationship. In addition, as has been recognised, there are often genuine commercial interests of a party in ensuring that contractual relations are only with the person it has selected as the other party to the contract and no one else.1 What then can justify allowing the assignee, who is nevertheless a third-party to the contract, to be entitled to invoke the arbitration agreement?
One plausible explanation is that the counterparty to the original contract may be taken to have waived, or be estopped from denying, the assignee’s right to rely on the arbitration clause, particularly where (i) the assignment has been notified and accepted, or (ii) the contract itself contemplates assignment and states that it will bind successors and assigns (as recognised in Siemens Factoring and Devtree Corp LLP v Bhumika North Gardenia (2024)). Moreover, if the original party wished to maintain confidentiality or restrict the identity of the arbitral counterparty, it could have included an anti-assignment clause. Such clauses have long been upheld as valid and commercially justified. Moreover, an anti-assignment clause can prohibit the assignee from invoking the arbitration agreement (Dassault Aviation SA v Mitsui Sumitomo Insurance (2022)). Having chosen not to do so, the counterparty cannot later resist the assignee’s invocation of the arbitration clause.
At the same time, the entitlement of an assignee to take the benefit of the arbitration clause interacts with broader arbitration and public policy considerations, including the need to ensure certainty in dispute resolution, avoid multiplicity of proceedings, and preserve finality of awards. As discussed below, it is this interaction between contractual autonomy and arbitral efficiency that shapes the treatment of assignees (and others “claiming through or under”) in arbitration.
Beyond Contractual Privity
However, for present purposes, the clear conclusion is that ‘persons claiming through or under a party’ are, in substance, third parties to the agreement. They are distinct from non-signatories who may be bound to arbitrate through implied consent-based theories, such as the Group of Companies Doctrine. Therefore, the justification for joining an assignee, who has no contractual privity with the original counterparty, must rest on considerations other than consent or privity.
For example, in the case of assignment, it seeks to prevent a party from avoiding arbitration through an assignment to a third party. It also ensures that the assignee takes the assigned right with both the benefit and burden of the arbitration clause in the contract, based on the broader principle that one cannot approbate and reprobate in relation to the assigned contract subject to arbitration (DLF Limited v PNB Housing (2024) [51]; Shipowners’ Mutual P&I Ass’n (Luxembourg) v Containerships Denizcilik (2016), [22])
While the above discussion has focused on assignees, a similar position applies to others generally falling within the phrase ‘claiming through or under’. For instance, a liquidator is not a party to the arbitration agreement (Tanning Research [10]), and an insurer or subrogee is not a party to the original contract between the insured and the wrongdoer (Iffco-Tokio General Insurance Co.Ltd (2024) [10]). Novation, however, does not present this difficulty, because novation results in the termination of the old contract and the substitution of a new one with the consent of all parties.2 Accordingly, contrary to the position indicated in Cox and Kings, the novated party is, in fact, to be treated as a ‘party’ to the arbitration agreement contained in the substituted contract and does not fall within ‘persons claiming through or under’ (CMA CGM v Hyundai Mipo Dockyard Co Ltd (2008) [32]).
C. Allocation of Power to Determine Parties to Arbitration Proceedings: Courts v. Tribunals
Thus far, it is established that persons falling under the category of ‘claiming through or under’ do not satisfy the requirement of contractual privity. Nevertheless, in defined circumstances, such persons may still be entitled to invoke the arbitration agreement or be bound by it. However, the position taken by the Supreme Court in Adavya Projects and ASF Buildtech is that the tribunal’s power of joinder, when exercising kompetenz-kompetenz under Section 16, is limited to those who have consented to be bound as a party to the arbitration agreement. As a result, an arbitral tribunal would lack jurisdiction to implead a third party who is only a ‘person claiming through or under a party’, such as an assignee or subrogee. The court’s powers, however, stand on a different footing.
Section 8 (and Section 45) of the Act permits the court to refer the parties to arbitration at the request of a party or any person claiming through or under that party. This provision traces back to the English Arbitration Act of 1889, and similar language appears in other national arbitration laws. For instance, section 6(5)(a) of the Singapore International Arbitration Act provides that “party” includes persons claiming through or under the party for the purpose of seeking a stay of proceedings and reference to arbitration under sections 6 and 7. Likewise, section 82(2) of the UK Arbitration Act 1996 states that references to a “party” include persons claiming through or under the party, which includes assignees.
The effect of these provisions is that the power lies with the courts to extend the reference to arbitration to such third parties falling within the statutory phrase ‘claiming through or under’. In M/S Devtree Corp, the Karnataka High Court held that if a person ‘claiming through a party’ may seek a reference to arbitration, the converse also follows: such persons may likewise be brought within the tribunal’s jurisdiction by the court. The logical conclusion is that the tribunal’s jurisdiction over ‘persons claiming through or under’ does not arise from contractual privity or consent, but from the court’s statutory power of reference and appointment.
This position is principled. Proceedings before the arbitral tribunal, deriving their mandate from consent and contractual privity, might not be the proper forum to determine whether a tribunal can bind a third party who is not covered by an arbitration agreement. The court, applying the statutory framework, is better placed to decide that question at the threshold.
Statutory Expansion of Privity
The foregoing discussion indicates that the scope of the court’s powers and the arbitral tribunal’s powers diverges with respect to ‘persons claiming through or under a party’. In the absence of contractual privity, arbitration legislation creates a form of statutory privity by allowing such persons to take recourse to arbitration in furtherance of certain policy objectives (as elaborated below). As held in Tanning Research, a person claiming ‘through or under a party’ is bound by “force of the statute.” Such statutory modification of the doctrine of contractual privity is not unfamiliar. For instance, the UK Contracts (Third Party Rights) Act 1999 permits a third party to enforce a substantive contractual benefit in its own right. Section 8(1) of the 1999 Act further provides that where a third party enforces a contractual term that is subject to arbitration, the third party is to be treated as a ‘party’ to the arbitration agreement under the UK Arbitration Act 1996 (Fortress Value Recovery Fund v Blue Sky Special Opportunities Fund (2013)).
Hence, the Bombay High Court in Luxempire overlooks this distinction between contractual privity and statutory privity. The court treats the absence of intention or implied consent on the part of the transferee to be bound as a party to the arbitration agreement as determinative. However, such considerations are irrelevant when interpreting the phrase ‘persons claiming through or under a party’. Nevertheless, the outcome in Luxempire (that the arbitral tribunal lacked jurisdiction) can still be justified on the basis that a tribunal cannot, on its own, implead a ‘person claiming through or under a party’, as discussed above. The task of subjecting such persons to the tribunal’s jurisdiction lies with the courts through their interpretation of the statutory phrase, which creates a form of fictional statutory privity. The interpretation of the phrase, in turn, must reflect the policy objectives underlying it. The next part examines these policy considerations.
III. The Scope of the Phrase
It is generally accepted that ‘claiming through or under’ refers to a derivative cause of action or defence, where one person steps into the shoes of another to assert or resist a claim (Cox and Kings [132]). However, simply restating a requirement of “derivative interest” does not clarify what that entails. In this regard, two Australian High Court decisions, Tanning Research (1990) and Rinehart v Hancock (2019), are useful. Tanning Research formulated the test as whether an essential element of a claim or defence was vested in or exercisable by a party to the arbitration agreement before the person claiming through or under sought to rely on it. The Court held that a liquidator rejecting a creditor’s proof of debt was claiming under the debtor company, because the liquidator stood in the same position as the insolvent company in asserting that no enforceable liability existed.
Importantly, the Court clarified that the phrase ‘claiming through or under’ is not confined to cases involving assignment or transfer. Instead, its interpretation must be grounded in the factual context. The formal character of the proceedings or the legal status of the person (assignee, subrogee, insurer, etc.) is not determinative. As a statutory phrase, it must be interpreted with reference to its “text and context”, rather than by reference to rigid categories of formal legal relationships.
In this light, the policy of the Arbitration Act cannot be to compel third parties to arbitrate disputes without a sufficient threshold being met. As held in City of London v Sancheti (2008), a mere legal or commercial connection with a party to the arbitration agreement is insufficient to bring a person within the scope of the phrase. Courts have similarly held that where a person has a direct contractual or other legal relationship with the counter-party that is distinct and independent from the party to the arbitration agreement, such a person cannot be said to be ‘claiming through or under’ that party.
Along similar lines, Rinehart v Hancock is a useful illustration of a ‘penumbral’ application of the phrase. As a general proposition, the court held that whether ‘persons claiming through or under’ were privy to the arbitration agreement was irrelevant (para 66). The case arose from a trust dispute where the beneficiaries alleged that third-party companies had received trust property in breach of trust and were liable as constructive trustees. The third-party companies sought a stay based on the arbitration clause in the settlement deed between the trustees (transferors) and the beneficiaries. Applying the Tanning Research test, the High Court granted the stay. The court held that they were claiming under a party because the third-party companies’ defence depended on the trustees’ right to freely dispose of the property. This was so even though the involvement of the third-party companies was purely a “factual” coincidence, with no legal relationship to the party to the arbitration agreement. The court further clarified that ‘claiming through or under’ does not require the third party’s claims to be identical to those of the party under whom they claim; a sufficient degree of dependence is adequate.
Commercial Efficiency
Importantly, the court’s reasoning emphasized avoiding the uncertainty that could arise from duplication of proceedings. If the disputes between the third-party companies and the beneficiaries were litigated separately from those between the parties to the arbitration agreement, namely the trustees and beneficiaries, it could result in conflicting or inconsistent awards on closely connected questions of law and fact. Such an outcome would undermine the statutory purpose of arbitration legislation in expanding privity to include those ‘claiming through or under a party’ to ensure finality and certainty in dispute resolution. Moreover, under the Fiona Trust principle of a presumption of one-stop adjudication, reasonable commercial parties would not intend to fragment proceedings across multiple forums, thereby increasing the risk of inconsistent factual and legal determinations. Accordingly, the interpretation of the phrase ‘claiming through or under’ must be fact-sensitive and aligned with its statutory purpose.
The Supreme Court in Cox and Kings expressed doubts about the applicability of Rinehart under the Indian Act, without providing clear reasons (¶134). However, the court explicitly recognised that the principal rationale for this statutory expansion of privity is “commercial efficacy”, as it ensures the finality of arbitral awards (¶142). This approach is aimed at preventing the parties and those claiming under them from re-agitating the same dispute in multiple forums. The reasoning aligns with the principles established in Rinehart.
Striking a Balance
Nevertheless, as Justice Edelman’s dissent in Rinehart underscores, commercial convenience has limits. Compelling a third party to arbitrate, even if they claim “through or under” a party, risks undermining the principle of equal treatment, which was recently affirmed by the Supreme Court. This concern is heightened where the third party lacked any real opportunity to participate in the appointment of the tribunal (Siemens AG/BKMI v. Dutco Construction Co) or did not consent to the procedural framework or governing law. Such circumstances may also risk enforcement of the award on public policy grounds. This is in addition to the concerns highlighted above, of confidentiality, commercial expectations and party autonomy in dealing with a chosen or a known counterparty in arbitration. Thus, the public policy rationale behind extending statutory privity must be balanced against these fairness considerations in each factual context.
Conclusion
This essay has shown that the question of who qualifies as a ‘party’ to an arbitration agreement is distinct from who is a ‘person claiming through or under’ a party. Consent and contractual privity address only the former. As demonstrated through the discussion on assignment, persons ‘claiming through or under’ are not themselves parties to the arbitration agreement. Instead, this statutory expansion of privity serves specific policy objectives underlying arbitration. In the absence of authoritative judicial guidance, the precise contours of the phrase remain unsettled. Accordingly, courts should interpret ‘claiming through or under’ as a statutory mechanism aimed at preventing the fragmentation of dispute resolution and ensuring the finality of awards, while balancing competing considerations such as equal treatment, party autonomy, confidentiality, and the closeness of the derivative relationship.