The Hon'ble #delhihighcourt answered the same in the affirmative while invoking the Doctrine of Group of Companies, in Aditya Birla Finance Limited v SITI Networks Limited, Arbitration Petition No. 474 of 2022, decided on 03-03-2023; Neutral Citation Number:2023/DHC/001557.
The judgment states that even a non-signatory or third party could be subjected to arbitration without their prior consent if there was a clear intent of the parties to bind both the signatory as well as non-signatory parties.
Reference was also made to Chloro Controls India Private Limited v. Severn Trent Water Purification Inc, (2013) 1 SCC 641, wherein the Hon'ble Apex Court had laid down the verdict that a non-signatory party could also be subjected to arbitration, provided the transactions were within the group of companies and there existed a clear intent of the parties to bind both the signatory as well as non-signatory parties in a contract.
The Delhi High Court, while not agreeing to the argument of the Respondent in this case, that the existence of an arbitration agreement is a sine qua non for reference of a dispute under Section 7 of the Act of 1996, held that the Court is required to examine from the touchstone of the direct relationship of the party signatory to the arbitration agreement, commonality of the subject matter and the agreement between the parties forming part of a composite transaction. The Court also held that the transaction should be of composite nature where the performance of the other agreement may not be feasible without aid, execution, and performance of the supplementary or ancillary agreement for achieving the common object. It was further held that the Court would also have to examine whether a common reference of such parties to arbitration would serve the ends of justice. Once the above exercise is completed and the Court answers the same in the affirmative, the reference of even a non-signatory party would fall within the aforesaid exceptional case
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