• UGI USER
  • Dec 07, 2023
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Arbitration Agreement Can Bind Non-Signatories

News:

Supreme Court Upholds ‘Group Of Companies’ Doctrine  in the arbitration Act.

About the Judgement:

  • “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 Supreme Court observed.
  • According to the Court’s ruling, the arbitration agreement does not always bind its signatories exclusively. If there is a clear legal relationship between the signatories and the non-signatories and the parties intended to be bound by it by their conduct, then the requirement of a written arbitration agreement does not imply that non-signatories will not be bound by it.
  • The Court held that non-signatories are not total strangers to the arbitration agreement because of their relationship with the signatory parties and commercial involvement in the subject matter.
  • The verdict (Wednesday, December 6, 2023) was delivered by a bench that included Chief Justice of India DY Chandrachud, Justices Hrishikesh Roy, PS Narasimha, JB Pardiwala, and Manoj Misra.
About Supreme Court

●   The Government of India Act of 1935 gave rise to this unified court system, which upholds state and federal laws alike.

●   The Indian Constitution has instituted a unified legal system, wherein the high court sits beneath the Supreme Court. There is a hierarchy of lower courts that exists beneath the HC.

●   In the United States of America, state and federal laws are upheld by separate courts—one at the state level and the other at the federal level. The GoI, 1935’s provisions established the Supreme Court of India as the country’s federal court.

●   Part V of the constitution covers Articles 124 through 147, which address the SC’s structure, autonomy, authority, and workings and it is regulated by the Parliament.

●   In contrast to the legislative and executive branches, the judiciary is integrated in India. This means that, despite the existence of High Courts in individual states, all courts operating within India’s borders must abide by the law established by the Supreme Court (Article 141).