Abstract

Arbitration has long been lauded for its equitable nature, offering a peaceful resolution to disputes through discussion rather than force. In general, arbitration agreements, as contractual agreements between two or more parties, bind them to arbitration proceedings. However, non-signatory parties may also find themselves bound by arbitration agreements through various legal doctrines including alter ego, agency, estoppel, assignment and third-party beneficiary. Another doctrine which has exponentially expanded the jurisdiction of arbitral tribunals is the Group of Companies doctrine allowing for the inclusion of non-signatory affiliates within the scope of arbitration agreements. The Group of Companies doctrine was invoked for the first time in the Chloro Controls case and since then, Indian Courts have relied upon it to bind non-signatory parties to arbitration proceedings. This article explores the binding nature of arbitration agreements on non-signatory entities, examining such legal doctrines and drawing insights from landmark cases. The article, further, traces the evolution of law and decisions taken by the Supreme Court of India where dispute arises in multi-party transactions and some liability lies on the non-signatory party who was initially not a part of the arbitration agreement.

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