Reevaluating Non-Signatory Participation In Arbitration: Beyond The Group Of Companies Doctrine
- IJLLR Journal
- Feb 20
- 2 min read
Adwitiya Jaiswal, BA LLB, KIIT School of Law, KIIT University, Bhubaneswar, Odisha
ABSTRACT
Arbitration, as a preferred method of dispute resolution, is traditionally rooted in party autonomy, requiring mutual consent for its applicability. However, in complex commercial transactions, multiple entities are often involved without being formal signatories to arbitration agreements. This raises significant legal questions regarding the inclusion of non-signatories in arbitration proceedings. While the Group of Companies Doctrine (GOCD) has served as a primary basis for extending arbitration beyond signatories, recent judicial pronouncements in India have demonstrated a broader approach, incorporating interlinked contractual obligations and commercial realities to justify the inclusion of non-signatories. This paper critically examines the legal framework governing the participation of non-signatories in arbitration, with a particular focus on three significant judicial decisions: RBCL Piletech Infra v. Bholasingh Jaiprakash Construction Limited & Ors.1, Oil and Natural Gas Corporation Limited v. M/s Discovery Enterprises Pvt. Ltd. & Anr2., and Ameet Lalchand Shah v. Rishabh Enterprises & Ors3. These cases illustrate how Indian courts have evolved from a rigid contractual approach to a more contextual analysis that takes into account the economic and functional interdependence of transactions.
In RBCL Piletech Infra, the Delhi High Court recognized that arbitration could extend to a non-signatory if the contractual framework reflected interlinked obligations and a unified commercial purpose. This decision emphasized that a non-signatory’s involvement in the execution and performance of a contract could justify its inclusion in arbitration, even in the absence of direct consent. Likewise, the Supreme Court’s ruling in ONGC v. Discovery Enterprises underscored the importance of examining the economic realities and mutual intent of parties, rather than adhering strictly to formal contractual relationships.
