Prima facie referral to arbitration may include a non-signatory where alter ego and veil-piercing issues are left to the tribunal.

At the referral stage for appointment of an arbitrator under a partnership deed, a court should confine itself to a prima facie view on the existence and scope of the arbitration agreement and should not conduct a mini-trial on joinder or corporate separateness. Where pleadings allege that a non-signatory company operates as the alter ego of a signatory partner and uses the same premises, resources, customers, workers, and purchase orders, such objections may be left to the arbitral tribunal. Questions of misjoinder, non-signatory status, estoppel, and veil-piercing can be decided by the tribunal under its jurisdictional competence.

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Issues: Whether, in an application for appointment of an arbitrator arising out of a partnership deed, the dispute could be referred to arbitration by impleading a non-signatory company on a prima facie case of alter ego, commonality of subject matter, and use of the corporate form to carry on competing business.

Analysis: The partnership deed contained a broad arbitration clause governing disputes relating to the partnership affairs. The subsequent memorandum of understanding indicated that the partnership business continued and that the parties' rights under the deed remained relevant. On the pleadings and materials placed, there were specific allegations that the non-signatory company was operating from the same premises, using the same resources, user identification, customers, workers, and purchase orders, and was allegedly functioning as the alter ego of a signatory partner. The referral court noted that it must confine itself to a prima facie examination at the stage of appointment of an arbitrator and should not conduct a mini-trial on joinder or corporate separateness. It further held that objections as to misjoinder, non-signatory status, and the applicability of estoppel or piercing the corporate veil could be raised before the arbitral tribunal, which is competent to decide its own jurisdiction and the party status of those before it.

Conclusion: The non-signatory company could be brought within the arbitration at the referral stage on a prima facie basis, and the application for appointment of an arbitrator was allowed.

Ratio Decidendi: At the stage of appointment under the Arbitration and Conciliation Act, 1996, the referral court should ordinarily restrict itself to a prima facie view on the existence of the arbitration agreement and leave contested questions about binding non-signatories, including alter ego and veil-piercing objections, to the arbitral tribunal under its jurisdictional competence.

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