Indiabulls bound by arbitration for BTG Contract, disputes referred to Arbitral Tribunal

The court allowed the petition, holding that Indiabulls was bound by the arbitration agreement for the BTG Contract and should be referred to arbitration. Disputes related to the BoP Contract were not referred to arbitration due to the absence of an arbitration clause in that contract. The court directed the formation of an Arbitral Tribunal to adjudicate the disputes related to the BTG Contract.

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Issues Involved:
1. Existence of an arbitration agreement between the petitioner (Shapoorji) and Indiabulls for the BTG Contract.
2. Whether disputes related to the BoP Contract can be referred to arbitration.
3. Applicability of the Group of Companies doctrine and principles of estoppel to bind Indiabulls to the arbitration agreement.
4. Appointment of an arbitrator for the disputes.

Detailed Analysis:

1. Existence of an Arbitration Agreement Between Shapoorji and Indiabulls for the BTG Contract:
The court examined whether an arbitration agreement existed between Shapoorji and Indiabulls for the BTG Contract. It was noted that the BTG Contract was signed by Shapoorji and Elena, with Elena referred to as the 'Employer'. The General Conditions of the Contract (GCC) defined 'Employer' as Elena Power & Infrastructure Limited, and 'Owner' as Indiabulls. The court highlighted that Indiabulls had invited bids for the BTG Works, Shapoorji submitted its bid directly to Indiabulls, and the bid was accepted by Indiabulls, forming a binding contract. The LoA, issued on Indiabulls' letterhead but signed by Elena, required Shapoorji to enter into a formal contract with Indiabulls. The court found that Indiabulls had a direct involvement in the BTG Contract, including issuing Letters of Credit and making payments to Shapoorji. The court concluded that Indiabulls was a direct beneficiary of the BTG Contract and had participated in its formation, thereby binding Indiabulls to the arbitration agreement.

2. Whether Disputes Related to the BoP Contract Can Be Referred to Arbitration:
Shapoorji argued that the BoP Contract was supplemental to the BTG Contract and thus covered by the arbitration clause in the BTG Contract. However, the court noted that the BoP Contract was awarded to another agency (Gannon Dunkerley & Co. Ltd.) and later offloaded to Shapoorji. The BoP Contract did not include an arbitration clause and was treated separately from the BTG Contract, as evidenced by separate final bills submitted by Shapoorji for the BTG and BoP Works. The court concluded that there was no agreement to refer disputes related to the BoP Contract to arbitration.

3. Applicability of the Group of Companies Doctrine and Principles of Estoppel to Bind Indiabulls to the Arbitration Agreement:
The court discussed various legal principles under which non-signatories could be bound by arbitration agreements, including implied consent, agency, estoppel, and the Group of Companies doctrine. The court found that Indiabulls and Elena shared common resources, office space, and personnel, indicating that Elena was an alter ego of Indiabulls. The court also noted that Indiabulls had directly benefited from and participated in the BTG Contract. The court applied the principles of estoppel, noting that Indiabulls had accepted the benefits of the BTG Contract and was therefore estopped from denying its obligation to arbitrate. The court concluded that Indiabulls was bound by the arbitration agreement under the Group of Companies doctrine and principles of estoppel.

4. Appointment of an Arbitrator for the Disputes:
The court noted that Elena had appointed Justice C.K. Prasad as its nominee arbitrator and directed that he would also be considered the nominee arbitrator of Indiabulls. The court instructed that Justice C.K. Prasad and the arbitrator nominated by Shapoorji should jointly nominate the third arbitrator to constitute the Arbitral Tribunal within two weeks, failing which the parties could approach the court for the appointment of the third arbitrator.

Conclusion:
The court allowed the petition, holding that Indiabulls was bound by the arbitration agreement for the BTG Contract and should be referred to arbitration. However, disputes related to the BoP Contract were not referred to arbitration due to the absence of an arbitration clause in that contract. The court directed the formation of an Arbitral Tribunal to adjudicate the disputes related to the BTG Contract.

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