An Order under Section 17 of Arbitration and Conciliation Act, 1996 insofar as it affects the rights and remedies of third party secured creditors deserves to be set aside – Asset Reconstruction Company India Ltd. v. ATS Infrastructure Ltd. & Ors. – Delhi High Court

Hon’ble High Court of Delhi held that: (i) The appellant may be entitled to exercise its rights under the SARFAESI Act, 2002 and/or under the Recovery of Debts due to Banks and Financial Institutions Act, 1993 (DRT Act) but the Impugned Order insofar as it infringes upon the contractual rights and entitlements of the appellant (an unconnected third party to an arbitration between the respondents), deserves to be set aside irrespective of any other legal rights the appellant may have. (ii) It is settled in law that an arbitral tribunal has no jurisdiction to affect the rights and remedies of third party secured creditors in the course of determining disputes pending before it.

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