At the referral stage, clause overlap and non-signatory disputes belong to the arbitrator.

Shubham Equipment Private Limited (“SEPL”) and Rothwell Water Company Limited (“RWCL”) entered into a Technical Collaboration Licence Agreement in 2019.

In 2021, their promoters executed a Joint Venture Agreement (“JVA”) to establish an Indian joint venture; in 2023, SEPL and RWCL entered into a Memorandum of Understanding (“MoU”) concerning services for a Mumbai project.

The JVA and MoU contained arbitration clauses providing for arbitration in Mumbai.

SEPL later alleged, among other matters, that RWCL had breached the JVA and owed amounts under the MoU.

After SEPL issued notices invoking arbitration, RWCL argued that the disputes were governed by the Licence Agreement’s arbitration clause, providing for arbitration in Seoul, and that RBIPL—a non-signatory to the JVA and MoU—could not be bound.

SEPL applied under Section 11 of the Arbitration and Conciliation Act, 1996, for appointment of an arbitrator under the JVA and MoU.

1. Whether the arbitration clause in the Licence Agreement governed disputes arising under the JVA and MoU, such that the disputes should be referred to arbitration in Korea rather than under the arbitration clauses in those agreements.

2. Whether RBIPL’s status as a non-signatory to the JVA and MoU prevented its participation in the arbitration at the referral stage.

Section 11(6-A) of the Arbitration and Conciliation Act, 1996, limits the referral court’s inquiry to the prima facie existence of an arbitration agreement; once that existence is established, the court should refer the parties to arbitration.

The Court relied on In re: Interplay Between Arbitration Agreements under the Arbitration and Conciliation Act, 1996 and the Indian Stamp Act, 1899, (2024) 6 SCC 1, for this principle.

Disputes about the scope of the arbitration agreement and the proper parties to the arbitration may be left to the arbitrator where they require adjudication beyond the referral court’s limited inquiry.

The existence of the arbitration agreements in the JVA and MoU was undisputed.

The Court found that the agreements prima facie dealt with distinct subject matters: the Licence Agreement concerned patent licences, the JVA established an Indian joint venture, and the MoU provided for services by SEPL in connection with a project.

The JVA’s entire-agreement clause and the MoU’s clause superseding prior agreements supported treating their arbitration clauses as applicable to disputes arising under those agreements.

Whether the claims also overlapped with disputes under the Licence Agreement was a matter for the arbitrator, not a basis to refuse referral at the threshold.

Likewise, RBIPL’s non-signatory status raised a contentious issue, particularly given its relationship with RWCL and the allegation that it was incorporated in breach of the JVA; the Court therefore left that issue to the arbitrator.

It did not determine whether RBIPL was ultimately bound by the arbitration agreements or resolve the scope of any overlap with the Licence Agreement; those matters were left for the arbitrator.

There was no order as to costs.