In Brief
HPCL issued a purchase order to AGC Networks for a Tank Truck Locking System. AGC sub-contracted the work to BCL Secure Premises without HPCL's consent (violating an explicit contractual prohibition). After disputes, BCL (non-signatory) attempted to invoke the arbitration clause from the main HPCL-AGC contract, claiming it had assigned AGC's receivables. The High Court referred the dispute to arbitration. The Supreme Court reversed this, holding that a non-signatory cannot invoke an arbitration clause unless it is prima facie a 'veritable party' to the agreement. BCL lacked privity with HPCL, had no direct contractual relationship, and the assignment of receivables did not establish arbitral rights. The Referral Court must genuinely examine whether a non-signatory qualifies, not mechanically refer every application."
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