A non-signatory may invoke arbitration when its role and conduct prima facie show consent.

Respondent Nos. 1 and 2 purchased a flat in the “Fortune Township” project under a 2019 deed of conveyance, which incorporated the developer’s 2010 deed of declaration.

The declaration contemplated a developer-promoted maintenance body and contained an arbitration clause covering disputes relating to maintenance and management of the complex.

The petitioner, a company engaged by the developer under a 2017 maintenance agreement, claimed unpaid common-area maintenance charges from the respondents and invoked the conveyance’s arbitration clause. The respondents disputed the petitioner’s status as a party to that arbitration agreement and raised objections concerning its authority, limitation, and the petitioner’s proposed arbitrator.

The petitioner applied under Section 11 of the Arbitration and Conciliation Act, 1996, for appointment of a sole arbitrator.

1. Whether the petitioner, although not a signatory to the deed of conveyance, had made out a prima facie case that it was a “veritable party” entitled to invoke the arbitration agreement.

2. Whether the Section 11 court should refer the dispute to arbitration despite the respondents’ objections concerning the petitioner’s status, authority to levy charges, and limitation.

Under Sections 11(6-A) and 7 of the Arbitration and Conciliation Act, 1996, the referral court conducts a limited prima facie examination of the existence of an arbitration agreement, not a laborious or contested inquiry; the tribunal may rule on its jurisdiction under Section 16.

The term “party” in Section 2(1)(h), read with Section 7, may include a non-signatory whose consent to be bound is inferable from its conduct and relationship with signatories.

The referral court must be prima facie satisfied that the non-signatory is a veritable party; relevant considerations include mutual intent, relationship with signatories, commonality of subject matter, the composite nature of the transaction, and positive, direct and substantial participation in performance. A mere commercial connection is insufficient.

Where the prima facie threshold is crossed but the ultimate determination depends on disputed facts, those questions should be left to the tribunal.

The conveyance incorporated the declaration, which envisaged a maintenance body that would manage the complex and fix maintenance charges; its arbitration clause expressly covered disputes concerning maintenance and management.

The petitioner produced the 2017 agreement with the developer, under which it was appointed to maintain the project and received assigned rights to enforce payment of maintenance charges. The respondents’ alleged payments directly to the petitioner further supported, prima facie, that they dealt with it as the maintenance body.

These circumstances distinguished the case from BCL Secure Premises, where the third party operated on a separate orbit and the governing arrangements did not support a legal relationship with the relevant signatory.

Disputes over whether the petitioner was the maintenance body contemplated by the declaration, whether its authority continued, and the amount or limitation of the claim involved factual questions unsuitable for resolution at the Section 11 stage.

The Court referred the disputes to arbitration and appointed Ms. Srijani Ghosh, Advocate, as sole arbitrator, subject to the statutory disclosure and impartiality requirements.

All objections—including jurisdiction, arbitrability, maintainability, limitation, and the merits of the claim—were left open for determination by the arbitrator.