The Supreme Court on Wednesday held that an arbitration agreement can be binding even on non-signatory firms under the ‘group of companies’ doctrine.
This doctrine makes an arbitration agreement binding on a firm which, though not a signatory, is a member of a group of companies which is a party to the agreement.
“The group of companies doctrine must be retained in the Indian arbitration jurisprudence considering its utility in determining the intention of the parties in the context of complex transactions involving multiple parties and multiple agreements,” a Constitution Bench headed by Chief Justice of India D.Y. Chandrachud held in a judgment.
