I. Introduction
Arbitration is founded upon consent. The jurisdiction of an arbitral tribunal ordinarily derives from an agreement by which parties elect to submit their disputes to arbitration, and the principle of party autonomy remains central to the legitimacy of that consensual jurisdiction. Yet, the absence of a signature does not invariably establish the absence of consent.
Commercial transactions, particularly those involving corporate groups, composite arrangements, agency relationships and multiple interdependent contracts, may involve entities which do not formally execute the principal contract but nevertheless participate in its negotiation, assume obligations under it, perform material aspects of it, or otherwise conduct themselves in a manner demonstrating an intention to be bound by its terms. The jurisprudence on non-signatories has accordingly developed around the recognition that contractual consent may, in appropriate circumstances, be manifested through conduct and the surrounding circumstances rather than by signature alone.
The Supreme Court's Constitution Bench in Cox and Kings Ltd v SAP India Pvt Ltd1 recognised that Section 2(1)(h) read with Section 7 of the Arbitration and Conciliation Act, 1996 (“Arbitration Act”) does not confine the expression “party” to signatories and that, in appropriate cases, a non-signatory may be bound by an arbitration agreement.
This, however, does not mean that the jurisdiction of an arbitral tribunal may be extended to a non-signatory merely because the latter has a commercial relationship with a signatory, has derived a benefit from the transaction, or forms part of the same corporate group. The central enquiry remains one of consent. As the Constitution Bench emphasised, formal signatories are presumed to be parties to the arbitration agreement, whereas the binding of non-signatories arises in exceptional circumstances where the relevant facts and applicable legal doctrine establish that the non-signatory is, in substance, a party to the arbitration agreement.
This article examines the principles governing the binding of non-signatories to arbitration agreements as “veritable parties” to the arbitration, with particular emphasis on the recognised routes for establishing consent. It further considers the procedural stage at which the status of a non-signatory is to be determined, the respective roles of the referral court and arbitral tribunal, and the circumstances in which a non-signatory may properly be described as a “veritable party”.
II. Statutory Foundation: “Party” Does Not Mean “Signatory”
The statutory foundation for binding non-signatories is found principally in the combined reading of Sections 2(1)(h) and 7 of the Arbitration Act.
Section 2(1)(h) defines a “party” as a party to an arbitration agreement. Section 7, in turn, prescribes the requirements of an arbitration agreement but does not expressly state that every party to the arbitration agreement must have signed it. Section 7(4), moreover, recognises circumstances in which the existence of an arbitration agreement may be established through exchanges of communications or pleadings.
The statutory scheme therefore does not make signature the sole means by which consent to arbitration may be established. The Supreme Court in Cox and Kings affirmed that the definition of “parties” under Section 2(1)(h) read with Section 7 includes both signatory and non-signatory parties, and that the requirement of a written arbitration agreement does not, by itself, exclude the possibility of binding a non-signatory.2
This proposition should not, however, be understood as diluting the significance of a signature. The Court itself recognised that a signature is the most profound expression of a party's consent to submit itself to arbitral jurisdiction.3 The proper question is consequently not whether an arbitration agreement can simply be “extended” to a non-signatory. The more precise enquiry is whether, upon application of a recognised legal doctrine and consideration of the surrounding circumstances, the non-signatory was itself a party to the arbitration agreement.
This distinction also explains why the Supreme Court in Cox and Kings rejected the proposition that the Group of Companies (“GoC”) doctrine is founded upon the phrase “claiming through or under”. A person “claiming through or under” a party derives its rights in a derivative capacity, whereas a non-signatory who is found to be a party under the GoC doctrine is treated as a party in its own right. The Apex Court, in this regard, states as follows:
“146. One of the questions that has been referred before us is whether the phrase “claiming through or under” in Section 8 could be interpreted to include the group of companies doctrine. The group of companies doctrine is founded on the mutual intention of the parties to determine if the non-signatory entity within a group could be made a party to the arbitration agreement in its own right. Such non-signatory entity is not “claiming through or under” a signatory party. As mentioned above, the phrase “claiming through or under” is used in the context of successors in interest that act in a derivative capacity and substitute the signatory party to the arbitration agreement. To the contrary, the group of companies doctrine is used to bind the non-signatory to the arbitration agreement so that it can agitate the benefits and be subject to the burdens that it derived or is conferred in the course of the performance of the contract. The doctrine can be used to bind a non-signatory party to the arbitration agreement regardless of the phrase “claiming through or under” as appearing in Sections 8 and 45 of the Arbitration Act.”
III. The Role of Consent
Consent remains the foundational principle governing the extension of an arbitration agreement to a non-signatory. The absence of a signature is not, by itself, determinative; however, a non-signatory cannot be treated as a party to the arbitration agreement unless its intention to be so bound can be established on the basis of its conduct and the surrounding circumstances. In Ajay Madhusudan Patel v. Jyotindra S. Patel4, the Supreme Court reiterated that the enquiry must have regard to the mutual intention of the parties, the relationship of the non-signatory with the signatory, the commonality of the subject matter, the composite nature of the transaction, and the non-signatory’s participation in the performance of the contract. Relying upon Cox & Kings, the Court further emphasised that the relevant conduct must disclose positive, direct and substantial involvement in the negotiation, performance or termination of the underlying contract. Mere incidental participation is insufficient; the party seeking to bind the non-signatory bears the burden of establishing, through objective evidence, a conscious and deliberate involvement from which consent to the arbitration agreement may properly be inferred.
The emphasis upon consent assumes particular significance because the characterisation of a non-signatory as a “veritable party” necessarily operates as an exception to the ordinary requirement that arbitration rests upon the parties’ agreement to submit their disputes to a private adjudicatory process. Accordingly, commercial association, corporate relationship, participation in the transaction, or even the receipt of benefits under the underlying contract cannot, without more, be equated with consent to arbitrate.
Cox and Kings extended such consensual implication through the GoC doctrine. The GoC doctrine rests on mutual intention and consent, not corporate affiliation alone. Chloro Controls India (P) Ltd v Severn Trent Water Purification Inc recognised its application to non-signatory group companies,5 while Cox and Kings clarified that it does not derive from “claiming through or under” and that a non-signatory is bound as a party in its own right.
The enquiry is fact-sensitive and may consider the entities’ relationship, commonality of subject matter, composite nature of the transaction, and the non-signatory’s participation in its negotiation or performance. These factors are cumulative; corporate affiliation or a common economic interest, without more, cannot establish consent. In Adavya Projects (P) Ltd v Vishal Structurals (P) Ltd6</sup, the Supreme Court found consent on the basis of the non-signatories' contractual relationship with the signatories, the expansive scope of the arbitration clause, and their conduct pursuant to the agreement. Conversely, Hind Offshore Private Ltd v OCS Services (India) Private Ltd7, illustrates that substantial commercial involvement, even when accompanied by close corporate connections, does not by itself demonstrate an intention to assume obligations under the arbitration agreement.
The GoC doctrine must be distinguished from the concept of a “veritable party”. The former constitutes a legal basis upon which the intention of a non-signatory to be bound by an arbitration agreement may, in appropriate circumstances, be established. The latter describes the conclusion that the non-signatory is, notwithstanding the absence of its signature, a party to the arbitration agreement. The distinction is significant because the GoC doctrine does not proceed on the assumption that the separate corporate personalities of group entities may be disregarded in determining consent. It may be of relevance to refer to the definition of a veritable party as enunciated in the Illustrated Oxford Dictionary which states as follows:
“veritable” means “real; rightly so called (a veritable feast)”
Therefore, in substance, veritable means truly, genuinely or for all intended purposes. Such a definition is based on the foundational premise that the actions and intentions of the party, in the capacity of a non-signatory, must be given primacy to judge the intention of the said party to be bound by the arbitration agreement.8
Corporate affiliation therefore remains a relevant factual circumstance, but cannot, by itself, supply the juridical basis for consent. Indeed, treating the economic unity of a corporate group as sufficient to establish arbitral consent would effectively collapse the distinction between separate corporate entities and permit the obligations of an arbitration agreement to be attributed merely by reason of corporate structure.
A veritable party is not synonymous with an economically connected party: common ownership, control, commonality of commercial interests, participation in the broader transaction, or receipt of commercial benefits cannot, without more, establish an intention to assume the rights and obligations arising from the arbitration agreement.9 The same principle is evident in the context of infrastructure financing. Banks routinely finance infrastructure projects and may have extensive financial and contractual involvement in their implementation. Such financial involvement does not, merely by virtue of its existence, make the financing institution a “veritable party” to the underlying project contract or its arbitration agreement. To hold otherwise would result in ordinary financing arrangements being transformed into consent to arbitrate, merely because the financier has a significant economic interest in the successful performance of the project. “Veritable party” should therefore be understood as a conclusion reached upon the application of the GoC Doctrine and other recognised principles of non-signatory consent, rather than as an independent doctrine capable of displacing the requirement of consent or the separate legal personality of the entities concerned.
The enquiry must instead identify conduct which, viewed objectively and in the context of the contractual relationship as a whole, demonstrates an intention to assume the rights and obligations arising from the arbitration agreement. As Cox & Kings makes clear, the inquiry is not whether the non-signatory was commercially connected with the transaction, but whether the circumstances justify the inference that it intended to be bound by the arbitration agreement. The doctrine of the veritable party must therefore be applied with caution: the power to recognise a non-signatory as a party is not a licence to enlarge the arbitration agreement beyond the limits of consent.
IV. Joinder and Determination of Non-Signatory Status
The substantive question of whether a non-signatory is a veritable party is closely connected with the procedural question of when and by whom that determination should be made.
At the referral stage under Sections 8 and 11, the court is ordinarily concerned with the prima facie existence of the arbitration agreement and the basis for reference. Where determination of the non-signatory's status requires detailed examination of corporate relationships, contractual documents or disputed evidence, Cox and Kings indicate that the matter may appropriately be left to the arbitral tribunal under Section 16.10
This allocation reflects the principle of competence-competence while avoiding a premature adjudication of disputed factual matters by the referral court. The Supreme Court's subsequent decisions, including Ajay Madhusudan Patel v Jyotrindra S Patel11, HPCL v BCL Secure Premises (P) Ltd12 and ASF Buildtech (P) Ltd v Shapoorji Pallonji & Co (P) Ltd13, reinforce the importance of examining the factual basis of non-signatory status while preserving the tribunal's jurisdiction to determine its own competence.
The Hon’ble Supreme Court in Ajay Madhusudhan14 espoused the tribunal’s power in the following words:
“91. A detailed examination of numerous disputed questions of fact are imperative in deciding whether the SRG Group participated in the negotiation and performance of the underlying contract and can be bound by the arbitration agreement. At the cost of repetition, we may state that under our limited jurisdiction afforded under Section 11(6) of the Act, 1996 we should not conduct a mini trial and delve into contested or disputed questions of fact. This has been categorically laid down in several decisions of this Court including Vidya Drolia (supra) and Krish Spinning (supra). Further, it is also the case of the SRG Group that a dual test needs to be satisfied before it is compelled to be a party to the present arbitration proceedings i.e., (a) SRG Group should be shown to have agreed to the underlying contract and (b) SRG Group should also be shown to have agreed to be bound by the arbitration agreement. We are of the considered view that the same requires a much more detailed examination of the evidence that may be adduced by the parties which can only be gone into by the Arbitral Tribunal.
92. Therefore, considering the complexity involved in the determination of the question whether the SRG Group is a veritable party to the arbitration agreement or not, we are of the view that it would be appropriate for the arbitral tribunal to take a call on the question after taking into consideration the evidence that may be adduced by the parties before it and the application of the legal doctrine as elaborated in the decision in Cox and Kings.”
Therefore, as explained by the Hon’ble Supreme Court hereinabove, the right to final determination remains with the tribunal. Once the tribunal determines that the non-signatory is a party to the arbitration agreement, the consequences ordinarily applicable to a party follow. Similarly, the tribunal may implead a non-signatory where the applicable legal doctrine establishes that it is bound by the arbitration agreement.
The procedural power to implead, however, does not dispense with the substantive requirement of consent. Section 23 may facilitate the submission of claims and defences, while Section 16 provides the jurisdictional framework for determining objections to the tribunal's jurisdiction.15 A fresh notice under Section 21 may, where appropriate, also be prudent when a non-signatory is brought into the arbitration for the first time.16
The jurisprudence therefore supports a prima facie referral followed, where necessary, by a fuller determination by the tribunal. The court should neither mechanically subject a non-signatory to arbitration merely because it is commercially connected with the dispute, nor undertake a mini-trial at the referral stage.
Ultimately, the jurisprudence requires a careful distinction between commercial involvement and juridical consent. A non-signatory may negotiate, perform, finance or benefit from a transaction without thereby consenting to arbitration. Conversely, such conduct may, when viewed cumulatively with the surrounding circumstances, establish consent under an applicable doctrine. The determination must therefore remain fact-sensitive and doctrinally grounded.
This approach is particularly important in light of the principle of party autonomy. The absence of a signature does not invariably defeat consent, but neither does commercial participation establish it. The further the enquiry moves from formal execution, the more carefully the court or tribunal must identify the legal and factual basis for attributing consent.
The designation of a non-signatory as a “veritable party” should therefore remain a conclusion reached upon the application of an established legal doctrine, herein the GoC, and not an independent basis for extending arbitral jurisdiction.
V. Conclusion
The law relating to non-signatories has developed in response to the increasing complexity of commercial transactions. The formal distinction between signatory and non-signatory remains important, but it is not invariably determinative of whether a person is a party to an arbitration agreement.
The Constitution Bench decision in Cox and Kings Ltd v SAP India Pvt Ltd17 provides the principal framework for this enquiry. It confirms that the definition of “party” under Section 2(1)(h) read with Section 7 includes both signatories and non-signatories; that the GoC doctrine is also a consent-based doctrine having an independent juridical foundation, as the positive actions of the parties becomes significant markers of implied consent.
At the same time, Cox and Kings does not authorise an unrestricted expansion of arbitral jurisdiction. The Court expressly distinguished a party from a person “claiming through or under”, rejected the use of alter ego as the foundation of the GoC doctrine, and held that the single economic unit principle cannot, by itself, justify joinder.
The expression “veritable party” should therefore be approached with corresponding caution. It is best understood not as a separate doctrine, but as a conclusion that follows when a recognised legal principle, applied to the facts of the case, establishes that a non-signatory intended to be bound by the arbitration agreement.
This distinction is particularly important because the jurisdiction of an arbitral tribunal cannot be founded merely upon commercial expediency. A company may be part of a corporate group without consenting to arbitration; it may participate in performance without assuming every contractual obligation; and it may receive a benefit without becoming a party to the arbitration agreement. These facts may be relevant to the enquiry, but they cannot substitute for consent.
Ultimately, the legitimacy of binding a non-signatory depends upon preserving the distinction between commercial reality and juridical consent. The former may assist in discovering the latter, but cannot replace it.
Footnotes
1 Cox and Kings vs SAP India, 2023 INSC 1051.
2 Id.
3 Supra note 1.
4 Ajay Madhusudhan Patel v. Jyotindra S. Patel, (2025) 2 SCC 14.
5 Chloro Controls India (P) Ltd v Severn Trent Water Purification Inc (2013) 1 SCC 641.
6 Adavya Projects (P) Ltd v Vishal Structurals (P) Ltd 2025 INSC 507.
7 Hind Offshore Private Ltd v OCS Services (India) Private Ltd 2026 SCC OnLine Bom 3224.
8 HPCL v BCL Secure Premises (P) Ltd 2025 SCC OnLine SC 2746.
9 Supra note 1.
10 Arbitration and Conciliation Act 1996, s 16.
11 Supra note 4.
12 Supra note 8.
13 ASF Buildtech (P) Ltd v Shapoorji Pallonji & Co (P) Ltd (2025) 9 SCC 76.
14 Supra note 4.
15 Arbitration and Conciliation Act 1996, ss 16, 23.
16 Supra note 7.
17 Supra note 1.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
