Non-Signatory Bound by an Arbitration Agreement as per ‘Group of Companies’ Doctrine

Allowing an appeal against the decision of Bombay High Court (‘BHC’), which dismissed an appeal against an interim award of an Arbitral tribunal, the Supreme Court (‘SC’) ,while explaining the doctrine of ‘Group of Companies’, held that an arbitration agreement entered into by a company within a group of companies, can bind its non-signatory affiliates or sister concerns, if the circumstances demonstrate a mutual intention of the parties to bind both the signatory and affiliated, non-signatory parties. The Court, further, observed that: “Commentators have noted that a signed written agreement to submit a present or future dispute to arbitration does not exclude the possibility of an arbitration agreement binding a third party… A party, which is not a signatory to a contract containing an arbitration clause, may be bound by the agreement to arbitrate if it is an alter ego of a party which executed the agreement.”