Now Reading: Supreme Court weekly digest: arbitration, excise rulings
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Supreme Court weekly digest: arbitration, excise rulings
The Supreme Court has held that a non-signatory to a primary agreement can be bound by its arbitration clause if their conduct and performance of obligations under interlinked agreements show a mutual…
The Supreme Court has held that a non-signatory to a primary agreement can be bound by its arbitration clause if their conduct and performance of obligations under interlinked agreements show a mutual intent to be bound. This 'veritable party' doctrine, applied in KKH Finvest Pvt. Ltd. v. Ashiesh Shukla, extends earlier principles from Cox and Kings. The court said where multiple non-signatories execute similar share purchase agreements with identical decoupling clauses, it cannot exclude one from arbitration while referring others.
In National Projects Construction Corporation Ltd. v. Ishvakoo (India) Pvt. Ltd., the court ruled that a Section 9 petition at the post-award stage by an unsuccessful party (award debtor) is maintainable, but the threshold for interim relief is higher. It directed the appellant to deposit Rs 3.5 crore in the registry, holding that retaining encashed bank guarantees without a counter-claim would result in unjust enrichment. The bench found this a rare and compelling case warranting interim deposit to prevent irreparable prejudice.
The digest also covers rulings on Central Excise Act definitions of manufacture and kitting. The judgments were delivered between August 1 and 12, 2026.
Indian Opinion Analysis
The 'veritable party' doctrine now gives arbitration tribunals a clearer test for binding non-signatories: look at conduct, not just signature. This aligns Indian law with the global pro-arbitration trend and reduces litigation over who can be pulled into arbitration. In the post-award interim relief case, the court's willingness to order a deposit even without a counter-claim signals that unjust enrichment can override procedural bars. The next step will be how lower courts apply these standards in Section 34 challenges.
Source: livelaw.in
This brief was synthesised by AI from the source linked above.
