Whether a non-signatory to the arbitration agreement can be impleaded as a party to the proceedings?

Solution

In the case of Mahanagar Telephone Nigam Ltd. v. Canara Bank & Ors. 2019- The Supreme Court held that a valid arbitration agreement is the foundation stone on which the entire edifice of the arbitral process is structured. The arbitration agreement need not be in any particular form. What is required to be ascertained is the intention of the parties to settle their disputes through arbitration. Further, the Court held that the meaning of a contract must be gathered by adopting a common-sense approach, and must not be allowed to be thwarted by a pedantic and legalistic interpretation.  An ‘arbitration agreement’ is a commercial document inters partes and must be interpreted so as to give effect to the intention of the parties, rather than to invalidate it on technicalities. A non-signatory can be bound by an arbitration agreement on the basis of the “Group of Companies” doctrine, where the conduct of the parties evidences a clear intention of the 2 parties to bind both the signatory as well as the non-signatory parties.