In Brief
This Constitution Bench clarified the validity and scope of the Group of Companies doctrine in Indian arbitration law. The Court held that non-signatory affiliates within a corporate group can be bound by an arbitration agreement if cumulative factors—including mutual intent, relationship to signatories, commonality of subject-matter, composite transaction nature, and contract performance—are satisfied. The doctrine rests on maintaining corporate separateness while identifying genuine mutual consent, not on piercing the corporate veil or 'single economic unit' alone. The Court rejected Chloro Controls' anchoring of the doctrine in the phrase 'claiming through or under', establishing instead that the doctrine has independent statutory existence under Sections 2(1)(h) and 7. At the referral stage, courts should make only prima facie determinations, leaving complex non-signatory party determinations to arbitral tribunals.
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