Group of companies doctrine remains valid, but non-signatories bind only through mutual intent and prima facie referral review.

The group of companies doctrine remains a valid principle in Indian arbitration law, but it is not founded on the phrase "claiming through or under" in Sections 8 and 45 of the Arbitration and Conciliation Act, 1996. That expression covers derivative claims such as succession, assignment, subrogation, or novation, whereas the doctrine is a consensual tool for identifying the real parties to the arbitration agreement from the written record, conduct, relationship, and surrounding transaction. A non-signatory may be bound under Section 7 only if mutual intent to arbitrate is shown expressly or by conduct. At the referral stage under Sections 8 and 11, the court makes only a prima facie review, leaving final joinder issues ordinarily to the arbitral tribunal.

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Issues: (i) Whether the group of companies doctrine is a valid principle in Indian arbitration law and whether it can be grounded in the expression "claiming through or under" in Sections 8 and 45 of the Arbitration and Conciliation Act, 1996; (ii) Whether a non-signatory may be treated as a party to an arbitration agreement under Section 7 of the Arbitration and Conciliation Act, 1996, and what standards govern that determination at the referral stage under Sections 8 and 11.

Issue (i): Whether the group of companies doctrine is a valid principle in Indian arbitration law and whether it can be grounded in the expression "claiming through or under" in Sections 8 and 45 of the Arbitration and Conciliation Act, 1996.

Analysis: The expression "claiming through or under" is directed to derivative claims in the nature of succession, assignment, subrogation, or novation. It does not describe a non-signatory who is sought to be joined as a party in its own right. The doctrine of group of companies is not a doctrine of derivative status; it is a consensual doctrine used to identify the real parties to the arbitration agreement from the conduct, relationship, and surrounding circumstances of the transaction. The earlier approach that traced the doctrine to the phrase "claiming through or under" was therefore incorrect. At the same time, the doctrine itself remains part of Indian arbitration jurisprudence and is retained as a principle for identifying mutual intent in complex multi-party transactions.

Conclusion: The doctrine is valid in law, but it is not anchored in the phrase "claiming through or under".

Issue (ii): Whether a non-signatory may be treated as a party to an arbitration agreement under Section 7 of the Arbitration and Conciliation Act, 1996, and what standards govern that determination at the referral stage under Sections 8 and 11.

Analysis: Section 7 permits an arbitration agreement to arise from a written record of agreement and does not require signature in every case. The decisive inquiry is whether the non-signatory consented, expressly or by conduct, to be bound by the arbitration agreement. The court or tribunal must examine the written record together with surrounding circumstances such as the non-signatory's relationship with the signatory, commonality of subject-matter, composite nature of the transaction, and performance of the contract. Mere membership of the same corporate group or a "single economic reality" is insufficient by itself. At the referral stage, the court is to make only a prima facie determination of the existence of an arbitration agreement and should ordinarily leave the final question of joinder of the non-signatory to the arbitral tribunal under the principle of competence-competence.

Conclusion: A non-signatory may be bound as a party under Section 7 on proof of mutual intent and conduct, and the referral court's role is limited to a prima facie examination.

Final Conclusion: The reference is answered by affirming the continuing validity of the group of companies doctrine, while confining it to Section 7 and rejecting its dependence on the phrase "claiming through or under"; the tribunal remains the primary forum for deciding whether the non-signatory is bound.

Ratio Decidendi: A non-signatory can be treated as a party to an arbitration agreement only when the written record and surrounding circumstances show mutual intent to arbitrate, and the group of companies doctrine operates as an aid to that inquiry rather than as a doctrine of derivative entitlement under Sections 8 or 45.

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