Non-Signatory Party cannot be Impleaded to Arbitration Proceedings without Establishing its Intention to be Bound to Arbitration

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Sep 30, 2019

Non-Signatory Party cannot be Impleaded to Arbitration Proceedings without Establishing its Intention to be Bound to Arbitration

The Supreme Court on July 1, 2019[1] has held that the burden of proof is upon the party seeking to implead a non-signatory in an arbitration to prove the third party’s intention to consent to the arbitration agreement. The Supreme Court further held that the fact that a third party happens to be a constituent of a group of companies (of which the signatory is also a constituent) will be of no avail as the third party was neither the signatory to the arbitration agreement nor did it have any causal connection with the process of negotiations preceding the agreement or its execution.

[1] Reckitt Benckiser (India) Private Limited v. Reynders Label Printing India Private Limited, Petition for Arbitration (Civil) No. 65 OF 2016 (Supreme Court).

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