Arbitration pact binds non-signatories too

The SC ruled that the ‘Group of Companies’ doctrine is applicable to arbitration proceedings in India. The definition of parties under Section 2(1)(h) read with Section 7 of the Arbitration Act includes both signatory and non-signatory parties. The ‘Group of Companies’ doctrine provides that an arbitration agreement entered into by a company within a group may bind non-signatory affiliates. Conduct of non-signatory parties could indicate their consent to be bound.