Jun 30, 2021

Non-Signatory being Direct Beneficiary and Involved in Contract Can be Compelled to Arbitrate

The Delhi High Court in Shapoorji Pallonji and Co. Private Limited v. Rattan India Power Ltd[1], held that a non-signatory to the arbitration agreement may be held to be the alter ego of a signatory and, accordingly, may be bound by the arbitration agreement in the following circumstances: (i) such non-signatory exercised control over a signatory through shareholding in the signatory; (ii) officials of such non-signatory acted on behalf of and exercise substantial and dominant direct control over the signatory party; (iii) the signatory and non-signatory shared common resources; (iv) such non-signatory was directly involved in the contract; and (v) such non-signatory knowingly accepted the benefits of the agreement.


[1] Shapoorji Pallonji and Co. Pvt. Ltd. v. Rattan India Power Ltd, Arb. P. 716/2019 and I.A. No. 7836/2020.




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