Non-signatory arbitration consent missing, and section 11 petition failed for want of valid invocation against that party.

A non-signatory cannot be compelled to arbitrate merely because it is described as owner or beneficiary; consent to arbitrate must be shown on the record, and the group of companies doctrine will not apply without pleaded and proved factual basis. The Court found that the arbitration clauses were executed only by the petitioner and respondent no. 1, and the materials did not establish respondent no. 2's assent. It also held that there was no valid section 21 invocation or live arbitrable dispute against respondent no. 2, because the notices were directed only to respondent no. 1. The section 11(6) petition against respondent no. 2 was therefore not maintainable.

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Issues: (i) whether respondent no. 2, a non-signatory to the contractual documents, could be referred to arbitration in the absence of demonstrated consent to arbitrate; (ii) whether there was a valid invocation of arbitration and arbitrable dispute between the petitioner and respondent no. 2 so as to sustain a petition under section 11(6) of the Arbitration and Conciliation Act, 1996.

Issue (i): whether respondent no. 2, a non-signatory to the contractual documents, could be referred to arbitration in the absence of demonstrated consent to arbitrate.

Analysis: The contractual documents containing the arbitration clauses were executed only between the petitioner and respondent no. 1. The materials relied upon to connect respondent no. 2 were largely post-contract correspondence and ancillary references to respondent no. 2 as owner or beneficiary. Such material did not establish that respondent no. 2 had agreed to arbitrate or had consented to be bound by the arbitration clauses. The burden to show assent of a non-signatory was not discharged. The invocation of the group of companies doctrine also failed on the facts pleaded and proved.

Conclusion: respondent no. 2 could not be compelled to arbitrate on the basis of the record before the Court.

Issue (ii): whether there was a valid invocation of arbitration and arbitrable dispute between the petitioner and respondent no. 2 so as to sustain a petition under section 11(6) of the Arbitration and Conciliation Act, 1996.

Analysis: The notice invoking arbitration dated 26.10.2020 was addressed only to respondent no. 1 and the claims raised therein were directed only against respondent no. 1. The later notice dated 27.08.2021 did not call upon respondent no. 2 to refer disputes to arbitration, but only sought acceptance of a nominated arbitrator. It did not disclose any independent arbitrable dispute with respondent no. 2. Since a section 11 petition must rest on a valid section 21 invocation and a live arbitrable dispute with the respondent sought to be impleaded, those requirements were not satisfied.

Conclusion: there was no valid invocation of arbitration against respondent no. 2 and no arbitrable dispute was shown to exist between the petitioner and respondent no. 2.

Final Conclusion: the petition for appointment of an arbitrator against respondent no. 2 was not maintainable on the facts found, and the petitioner was left to pursue any other remedies available in law.

Ratio Decidendi: a non-signatory cannot be referred to arbitration under section 11(6) unless consent to arbitrate is shown on the record, and a valid section 21 invocation raising arbitrable disputes against that party is a necessary foundation for such a petition.

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