Broad arbitration clause and corporate veil lifting justified appointing an arbitrator against a non-signatory participant.

A broad arbitration clause covering disputes arising out of or in connection with the contracts supported appointment of an arbitrator when the contractual mechanism failed after notice, so Section 11(6) was attracted. The Court also accepted that a non-signatory could be brought into the arbitral reference where the pleaded facts showed direct involvement in the transaction and justified lifting the corporate veil for the limited purpose of constituting the tribunal. The applications were allowed, and the arbitral process was set in motion against both respondents, including the second respondent.

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Issues: Whether an arbitrator could be appointed under Section 11(6) of the Arbitration and Conciliation Act, 1996 for disputes arising under the agreements, and whether the second respondent, though a non-signatory in substance, could also be brought within the arbitral reference on the basis of the corporate relationship and his involvement in the transactions.

Analysis: The arbitration clauses in the agreements covered disputes arising out of, in connection with, or in relation to the contracts. A dispute had arisen between the parties and the respondents had failed to make the contractual appointment despite notice, thereby attracting the Court's power under Section 11(6). On the facts pleaded, the second respondent was shown to have personally signed and ated the transaction and the petitioner relied on the principle that non-signatory parties may, in appropriate cases, be referred to arbitration. The Court accepted that the role attributed to the second respondent justified lifting the corporate veil for the limited purpose of constituting the arbitral tribunal.

Conclusion: The request for appointment of an arbitrator was accepted, and the reference was extended to both respondents, including the second respondent.

Final Conclusion: The applications were allowed and the arbitral process was set in motion by appointment of an arbitrator on behalf of both respondents.

Ratio Decidendi: Where the arbitration agreement is wide enough to cover the dispute and the surrounding facts justify treating the controlling signatory as the real participant in the transaction, the Court may, in exercise of Section 11(6), appoint an arbitrator even for a non-signatory respondent by lifting the corporate veil.

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