Arbitration pact: Supreme Court upholds group of companies doctrine

The Supreme Court on Wednesday ruled that non-signatory firms can be bound by arbitration agreement under the ‘group of companies’ doctrine.

This means that companies that belong to the same group of firms, but are not signatories to the arbitration agreement, can still be bound by the agreement.

“The ‘group of companies’ doctrine must be retained in the Indian arbitration jurisprudence considering its utility in determining the intention of the parties in the context of complex transactions involving multiple parties and multiple agreements,” the Bench of Chief Justice of India (CJI) DY Chandrachud,