Supreme Court Lays Down Factors for Determination of ‘Veritable’ Party for Purposes of Reference to Arbitration

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Oct 30, 2024

Supreme Court Lays Down Factors for Determination of ‘Veritable’ Party for Purposes of Reference to Arbitration

The Supreme Court in the case of Ajay Madhusudan Patel v. Jyotrindra S. Patel,^[1] has held that participation of the non-signatory party in the performance of the underlying contract should be factored when considering whether a non-signatory is a ‘veritable’ party in arbitration. When the conduct of a non-signatory is in harmony with the conduct of other signatory parties i.e., where the involvement of the non-signatory party is positive, direct and substantial and not merely incidental, it may lead the other parties to legitimately believe that the non-signatory is a ‘veritable’ party to the underlying contract.

[1] Ajay Madhusudan Patel v. Jyotrindra S. Patel, 2024 SCC OnLine SC 2597.

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