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India: Supreme Court on joining non-signatories to arbitration: consent factors and prima facie referral to tribunal (Ajay Madhusudan Patel v Jyotrindra S Patel, 2024)

Published on: 14 October 2024

Published by a LexisNexis Arbitration expert

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Article summary

Ajay Madhusudan Patel v Jyotrindra S Patel [2024] INSC 710 What are the practical implications of this case?

Although a non-signatory’s failure to “put pen to paper” may suggest an intention not to be bound by an arbitration clause, the judgment stressed that courts and tribunals should take a commercial, practical view when deciding whether that party nonetheless consented to join the arbitration agreement. Factors to weigh include the non-signatory’s role and participation in negotiating and performing the contract; whether they have actively taken on obligations under it; the parties’ mutual intention to regard the non-signatory as a contracting party; and the non-signatory’s relationship with one or more of the signatories. The judgment acknowledged that these assessments are frequently intricate, and courts should not embark on a mini-trial to reach a conclusion. Instead, the court’s remit is limited to determining, at face value, whether a valid arbitration agreement exists, with any detailed inquiry reserved for the arbitral tribunal, which is the proper forum to make that determination...

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