'Arbitration deal binding on non-signatories'

Non-signatories of an arbitration agreement can be made party to a dispute if they are part of the same group of companies and share common intention, a Constitution bench of the Supreme Court ruled on Wednesday, putting its stamp of approval on the so-called "Group of Companies" doctrine in Indian arbitration jurisprudence.

- Utkarsh Anand

The bench, led by Chief Justice of India Dhananjaya Y Chandrachud, held that the doctrine should be retained in Indian arbitration rules and statutes, considering its utility and determining the intention of the parties in the context of complex transactions involving multiple parties and agreements.

The five-judge bench, which also comprised justices Hrishikesh Roy, PS Narasimha, JB Pardiwala and Manoj Misra, maintained that the doctrine can be read into the relevant provisions of the 1996 Arbitration & Conciliation Act and that the definition of "parties" under the statute may include both signatories as well as non-signatories.