When can a non-signatory be impleaded in arbitration

The Bombay High Court considered a Section 37 petition challenging an arbitral tribunal’s refusal to implead Planet Support Services India Private Limited in an ongoing arbitration between Hind Offshore Private Limited and OCS Services (India) Private Limited.

The petitioner argued that the challenge itself was maintainable and that Planet Support was a necessary party because of its alleged role in the negotiation, finalisation, and continued performance of the charter party arrangements. It was also said to be part of a wider ownership and control structure connected to the claimant.

The Court framed two issues: first, whether a challenge lies against rejection of an impleadment application in arbitration; and second, whether the tribunal’s order warranted interference on merits.

On maintainability, the Court accepted that the petition could be entertained. The real question, however, was whether the tribunal had erred in refusing impleadment.

The Court examined the petitioner’s reliance on the Constitution Bench decision in Cox and Kings, which discusses the circumstances in which a non-signatory may be bound by an arbitration agreement. The judgment notes that the issue is fact-specific and that conduct, participation in negotiation or performance, and the surrounding transaction may be relevant. At the same time, the Court stressed that the existence of a group relationship or common ownership, by itself, does not automatically make a non-signatory a party to the arbitration.

Applying that approach, the Court found no case for interference. It held that the material placed before the tribunal did not justify treating Planet Support as a veritable party. Even the allegation that the services agreement between Planet Support and OCS Services was a sham or surrogate was not supported by a prima facie case. The Court noted that invoices and GST compliance were relied on to show that the arrangement was genuine.

The Court described the tribunal’s order as a sound summary of the law on non-signatory participation in arbitration and found nothing perverse in its reasoning. The petition was therefore dismissed on merits, while the question of costs was left to the arbitral tribunal.

Practical takeaway: a Section 37 challenge to refusal of impleadment can be maintainable, but a non-signatory will be added only on a proper factual foundation showing why it should be bound by the arbitration.