Arbitral Tribunals May Implead Non-Signatories on Their Own Motion – Commentary on the Supreme Court’s Judgment in
ASF Buildtech Pvt. Ltd. v. Shapoorji Pallonji & Co. Pvt. Ltd. (2025 INSC 616)

1. Introduction

The Supreme Court, in a landmark decision dated 2 May 2025, resolved a long-standing doctrinal conflict on whether an arbitral tribunal can itself join a non-signatory to the arbitration agreement. By affirming both the tribunal’s and the Delhi High Court’s orders that had impleaded ASF Buildtech Pvt. Ltd. (hereafter “ABPL”) in an on-going arbitration, the Court has authoritatively:

• Shifted the locus of the “joinder” inquiry from referral courts to arbitral tribunals;
• Clarified the interplay between Sections 7, 11, 16, 19 & 21 of the Arbitration and Conciliation Act, 1996 (“1996 Act”); and
• Harmonised the doctrine of Kompetenz-Kompetenz with the Group of Companies principle after Cox & Kings (Constitution Bench, 2023).

Effectively, the ruling ends the erstwhile view (prevalent in some High Courts) that only a court, at the Section 11 or Section 8 stage, could bind a non-signatory. Henceforth, tribunals may proprio motu determine and record such joinder, subject to later Section 34/37 review.

2. Background & Factual Matrix

1. Shapoorji Pallonji & Co. Pvt. Ltd. (“SPCPL”) entered into civil works and ancillary contracts (2016–2019) for developing “Black Canyon” IT-SEZ in Gurugram with entities belonging to the “ASF Group” – principally Black Canyon SEZ Pvt. Ltd. (“BCSPL”).
2. After disputes on payments, BCSPL invoked arbitration in 2022. A sole arbitrator was appointed by the Delhi High Court under Section 11.
3. SPCPL filed a counter-claim not only against BCSPL but also against ASF Insignia SEZ Pvt. Ltd. (“AISPL”) and ABPL (holding company), relying on the Group of Companies doctrine – alleging common management, comfort letters, unified branding and composite performance.
4. The Tribunal, on Section 16 objections, refused to delete AISPL/ABPL. The Delhi High Court (2024) upheld that view. ABPL alone reached the Supreme Court.

3. Summary of the Supreme Court’s Judgment

The Court (Pardiwala J. speaking for the Bench) dismissed ABPL’s appeal and held:

• The tribunal was competent under Section 16 read with Sections 2(1)(h) & 7 to decide whether a non-signatory is bound and to implead it.
• Section 11(6A) confines courts to a prima-facie check of the existence of an arbitration agreement; questions of “veritable parties” must ordinarily be left to the tribunal.
• Non-service of a Section 21 notice on ABPL was no bar; Section 21 merely fixes the date of commencement for limitation purposes, it is not jurisdictional.
• On merits, ABPL’s deep involvement (comfort letters, shared officials, composite project financing) crossed the Cox & Kings “positive, direct & substantial involvement” threshold, making it a “veritable party”.

4. Analysis

4.1 Precedents Considered

The Court surveyed divergent High Court lines and then harmonised them with recent Supreme Court dicta:

• Restrictive line: ONGC v. Jindal Drilling (Bom 2015); Sudhir Gopi (Del 2017); V.G. Santhosam (Mad 2020) – held tribunals cannot implead non-signatories.
• Expansive line: IVRCL (Guj 2015); IMC v. Deendayal Port (Guj 2018); Cardinal Energy (Bom 2024) – recognised such power.
• Supreme Court: Chloro Controls (2013) introduced the Group-of-Companies doctrine; Cox & Kings (5-J 2023) relocated its statutory basis to Sections 2(1)(h) & 7; Krish Spinning (2024) re-affirmed minimal Section 11 scrutiny; In re Interplay (7-J 2023) curtailed pre-referral judicial interference.

4.2 Legal Reasoning

1. Statutory locus of joinder power – The Court, echoing Cox & Kings, held that Section 2(1)(h) (definition of “party”) read with Section 7 (written arbitration agreement) is “always speaking”. Hence both courts and tribunals may apply consent-based doctrines to fasten jurisdiction on non-signatories.
2. Kompetenz-Kompetenz – Section 16 is an “inclusive repository” of all jurisdictional questions, “who is a party” being central. The tribunal’s authority to “rule” implies an implied power to pass necessary procedural orders – including joinder.
3. Section 11 confined – After the 2015 and 2019 amendments, courts at referral stage cannot engage in “mini-trials”. Determining veritable parties requires extensive factual inquiry (emails, comfort letters, corporate structure) and is best left to the tribunal.
4. Section 21 notice – Its purpose is only to peg limitation and trigger Section 11. It is not a jurisdictional rite. Non-service on a newly added party does not vitiate proceedings; limitation for such party’s claims/counter-claims will run from the date they are first raised before the tribunal.
5. Cumulative factual test – Applying Discovery Enterprises factors, the Court found:
   • One cohesive ASF Group, common directors & address;
   • ABPL’s comfort letter and financial backing;
   • Unified branding/e-mails; and
   • Composite Black-Canyon SEZ project.
   Together they showed “positive, direct & substantial” involvement – satisfying the Cox & Kings yardstick.

4.3 Impact on Future Arbitration Law & Practice

• Closure of High-Court split – The ruling overrules contrary views (Delhi, Bombay, Madras) and gives tribunals clear authority to join non-signatories.
• Reduced Section 11 litigation – Parties can no longer insist that joinder must first be argued before a referral court; Section 11 petitions can be shorter and faster.
• Wider reach of arbitration agreements – Corporate groups can expect that their active affiliates may be dragged or drag others into arbitration even without signing.
• Section 21 reframed – Non-issue of invocation notice is no longer a silver bullet to escape arbitration; but it still governs limitation.
• Legislative nudge – The Court’s concluding remarks virtually invite Parliament to codify a joinder provision in the upcoming Arbitration Bill, 2024.

5. Complex Concepts Simplified

Group of Companies Doctrine

If several companies form one economic reality and a non-signatory company has actively participated in negotiation or performance of the contract, it may be treated as if it had signed the arbitration clause.

Kompetenz-Kompetenz

A German phrase meaning “jurisdiction over its own jurisdiction”. Section 16 empowers an arbitral tribunal to decide whether it can hear a dispute, including who the parties are.

Section 11(6A) “Prima-Facie” Test

Referral courts now check only whether an arbitration agreement exists on the face of the record. They do not conduct detailed factual inquiries.

Section 21 Notice

A procedural step that tells the respondent “I am invoking arbitration”. It fixes the commencement date for limitation; failure to serve it on a later-added party does not negate the tribunal’s jurisdiction.

6. Conclusion

ASF Buildtech cements a pro-arbitration philosophy that privileges efficiency and party autonomy over technicalities. Key takeaways:

• Arbitral tribunals possess an implied statutory power to implead non-signatories on satisfying the Cox & Kings factual test;
• Referral courts should resist deep dives; their mandate ends once an arbitration agreement is prima facie shown;
• Section 21 notice is a limitation marker, not a jurisdictional gateway; absence of notice does not nullify joinder;
• The decision signals to corporate groups that internal structuring will not immunise them from arbitral claims if their conduct shows intent to be bound; and
• Parliament is nudged to codify tribunal joinder powers in the forthcoming Arbitration Bill, ensuring clarity and global confidence in India’s arbitral regime.

Practitioners should henceforth focus their joinder objections on Section 16 applications before the tribunal, reserving Section 37 appeals only for patent errors. Tribunals, in turn, must give robust procedural fairness (notice, opportunity, swift ruling) to added parties – thereby upholding due process while realising the Act’s objective of speedy dispute resolution.