Vladimir Nabokov and T.S. Elliot eulogized Ulysses as a divine work of art. Virginia Woolf and Aldous Huxley criticized Ulysses for being technical and boring. It is celebrated by some, reviled by many others. Yet, its legacy continues. The Doctrine of Group of Companies.

It provides, an Arbitration Agreement which is entered into by a Company within a Group of Companies may bind non-signatory affiliates if circumstances are such as to demonstrate mutual intention of parties to bind both signatories and non-signatories. Origin of Doctrine of Group of Companies is Arbitration Awards rendered mainly in France [Dow Chemical v. Isover Saint Gobain, Interim Award, ICC Case No. 4131, 23 September 1982; Bernard Hanotiau and Leonardo Ohlrogge, ‘40th Year Anniversary of the Dow Chemical Award’, 40(2) ASA Bulletin]. Doctrine of Group of Companies can be used to bind a non-signatory party to an Arbitration Agreement regardless of the phrase “claiming through or under” as appearing in Sections 8 and 45 of Arbitration Act.

Doctrine of Group of Companies is a means to infer intentions of both signatory and non-signatory parties and such intention can be gauged from circumstances around participation. Since ‘consent’ forms cornerstone of Arbitration, a non-signatory cannot be forcibly made a party. However, a non-signatory may be substantially involved in negotiation or performance of contractual obligations without formally ‘consenting’. There have been situations where a corporate entity deliberately made an effort to be not bound by underlying contract containing an Arbitration Agreement, but was actively involved in negotiation and performance of contract. Mere incidental involvement in negotiation or performance of contract is not sufficient to infer ‘consent’ of a non-signatory to be bound by an Arbitration Agreement. The burden is to prove a conscious and deliberate conduct of involvement of a non-signatory based on objective evidence.

– Hon’ble Chief Justice of India, Hon’ble Justice Dr. D.Y. Chandrachud, Cox and Kings Ltd. v. SAP India Pvt. Ltd., [Arbitration Petition (Civil) No. 38 of 2020].

Cox and Kings Ltd. v. SAP India Private Limited, (2024) 4 SCC 1 has a great bearing. “Referral Court will be required to prima facie rule on existence of an Arbitration Agreement and whether a non-signatory is a ‘veritable party’.… in view of complexity of such a determination, Referral Court should leave it for an Arbitral Tribunal to decide whether a non-signatory party is indeed a party to an Arbitration Agreement.”

Arbitral Tribunal is not denuded of its jurisdiction to decide whether a non-signatory is indeed a party to an Arbitration Agreement. But what is primordial is, it should be demonstrated prima facie before Referral Court, a non-signatory is a ‘veritable party’. It will not foreclose an Arbitral Tribunal from concluding to contrary after an intensive inquiry. This does not mean, where Referral Court finds prima facie a party is not a ‘veritable party’, still matter is left to an Arbitral Tribunal. To countenance such an extreme proposition would lead to disastrous consequences.

On facts of present case, parties operated on separate orbits.

– Hon’ble Justice K.V. Viswanathan, Hindustan Petroleum Corporation Ltd. v. BCL Secure Premises Pvt. Ltd., [Civil Appeal No. 14647 of 2025] decided on 09.12.2025.

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In a recent decision in SBI General Insurance Co. Ltd. v. Krish Spinning, 2024 INSC 532 it was observed by us, Arbitral Tribunal is preferred first authority to look into questions of arbitrability and jurisdiction, and Courts at referral stage should not venture into contested questions involving complex facts.

– Hon’ble Justice J.B. Pardiwala, Cox and Kings Ltd. v. SAP India Pvt. Ltd., [Arbitration Petition No. 38 of 2020] decided on 09.09.2024.

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SBI General Insurance Co. Ltd. v. Krish Spinning, (2024) SCC OnLine SC 1754 stated, a detailed examination by Courts at a Section 11 stage would be counterproductive to objective of expeditious disposal. Cox and Kings Limited v. SAP India Private Limited, (2024) 4 SCC 1 specifically dealt with scope of inquiry under Section 11. We appoint Mr. Akil Kureshi (Former Chief Justice, High Court of Rajasthan) to act as Sole Arbitrator.

– Hon’ble Justice J.B. Pardiwala, Ajay Madhusudan Patel v. Jyotirindra S. Patel, [Arbitration Petition No. 19 of 2024] decided on 20.09.2024. 

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SBI General Insurance Co. Ltd. v. Krish Spinning, 2024 INSC 532 has categorically held, only those questions which inextricably attacks or questions ‘existence’ of an Arbitration Agreement should be looked into by Referral Courts only for purpose of a prima-facie satisfaction. All other questions, particularly mixed questions of law and fact, fall within exclusive jurisdiction of Arbitral Tribunals and cannot be looked into by Referral Courts even for a prima-facie determination.

An archaic understanding of an Arbitral Tribunal being incapable or incompetent to identify and implead a non-signatory to an Arbitration Agreement, on its own accord, is not correct in view of In Re: Interplay Between Arbitration Agreements under The Arbitration and Conciliation Act, 1996 and The Stamp Act, 1899, (2024) 6 SCC 1 and Krish Spinning.

Whether issue of a non-signatory being bound by an Arbitration Agreement could be said to be inextricably intertwined with determination of ‘existence’ of an Arbitration Agreement?

The ‘existence’ of an Arbitration Agreement pertains solely to its formal presence in contractual documentation. The question of whether a non-signatory is bound by an Arbitration Agreement involves a more nuanced determination. There runs no umbilical cord between determining ‘existence’ of an Arbitration Agreement and determining its ‘existence’ qua a non-signatory.

– Hon’ble Justice J.B. Pardiwala, ASF Buildtech Private Limited v. Shapoorji Pallonji and Company Private Limited, [Civil Appeal No. 5823 of 2025] decided on 02.05.2025.

[Bharat Heavy Electricals Limited v. Jyothi Turbopower Services Private Limited, 2016 SCC OnLine Mad 4029, in which one of us (R. Mahadevan J) was a Member, observed, A&C Act, 1996 is premised on minimal judicial intervention in Arbitral Proceedings.

– Hon’ble Justice R. Mahadevan, Hindustan Construction Company Ltd. v. Bihar Rajya Pul Nirman Nigam Limited, [Special Leave Petition (Civil) No. 4211 of 2025] decided on 28.11.2025].

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Three-Judge Bench of this Court in SBI General Insurance Co. Ltd. Vs. Krish Spinning, 2024 SCC OnLine SC 1754 held, even if contracting parties, in pursuance to a settlement, agree to discharge each other of any obligations arising under contract, it is does not ipso facto mean, Arbitration Agreement too would come to an end unless parties expressly agree to do same.

Bench also explained concept of ‘accord and satisfaction’ under Section 63 of The Indian Contract Act, 1872.

– Hon’ble Justice Ujjal Bhuyan, Arabian Exports Private Limited v. National Insurance Company Ltd., [Civil Appeal No. 6372-6373 of 2025] decided on 06.05.2025.