Non-signatory bound by arbitration where actively involved and transaction composite.

Jupicos Entertainment Private Limited (Applicant) sought arbitration against Probability Sports (India) Private Limited (Respondent No.1) and Mumbai Cricket Association (MCA, Respondent No.2) due to disputes regarding participation rights in the T20 Mumbai League.

The MCA conceptualized the league in February 2018 and appointed Respondent No.1 to manage and operate it.

The Applicant and Respondent No.1 executed a Participation Agreement (PA) on March 9, 2018, allowing the Applicant to operate a team in the league for its first five editions.

The PA contained an arbitration clause.

The PA explicitly stated that the terms and decisions related to the league were subject to the final approval of the MCA, which was designated as the sole governing body.

Following the first edition, on April 12, 2019, the Applicant, Respondent No.1, and MCA executed a Supplementary Agreement to the PA.

This agreement supplemented certain terms of the PA, including a guarantee of minimum payments to team owners and granted MCA sole discretion over the schedule, format, and length of league editions.

MCA became a party to this Supplementary Agreement, which specifically referred to the PA.

In January 2020, Respondent No.1 terminated both the PA and Supplementary Agreement, stating that the termination was "endorsed and approved by the MCA".

Despite the termination, MCA continued to invite the Applicant to various meetings concerning the league between 2021 and 2024.

On April 24, 2024, MCA held a meeting with other team owners, excluding the Applicant, to discuss the third edition of the league, prompting the Applicant to protest.

The Applicant invoked the arbitration clause on April 5, 2025, and subsequently filed the present application under Section 11 of the Arbitration and Conciliation Act, 1996 for the appointment of an arbitrator.

Respondent No.2 (MCA) opposed its impleadment, arguing it was a non-signatory to the PA, and Respondent No.1 claimed the Applicant's claims were time-barred.

Whether an arbitration agreement exists between the Applicant and Respondent No.2 (MCA) such that MCA can be made a party to arbitration between the Applicant and Respondent No.1, despite being a non-signatory to the Participation Agreement (PA)?

Whether the reference to arbitration can be made given Respondent No.1's objection that the Applicant's claim is barred by limitation?

The court primarily applied Section 11 of the Arbitration and Conciliation Act, 1996, which deals with the appointment of arbitrators.

It relied heavily on the "group of companies" doctrine and the concept of a "veritable party" as elaborated by the Supreme Court in Cox and Kings Ltd. vs. SAP India Pvt. Ltd. and Anr. (2024) 4 SCC 1.

This doctrine allows a non-signatory to be subjected to arbitration without prior consent if there is mutual intent, a relationship between the non-signatory and signatory, commonality of subject matter, composite nature of the transaction, and performance of the contract.

The court further applied the principle of "composite transaction" from Ameet Lalchand Shah and Ors. vs. Rishabh Enterprises and Anr. (2018) 15 SCC 678, affirmed in Chloro Controls India (P) Ltd. v. Severn Trent Water Purification Inc. (2013) 1 SCC 641, which stipulates that multiple agreements involving several parties can constitute a single commercial project warranting a composite reference to arbitration.

Regarding limitation, the court applied the principle from SBI General Insurance Company Limited vs. Krish Spinning (2024) 12 SCC 1 and Aslam Ismail Khan Deshmukh Versus. ASAP Fluids Pvt. Ltd. Anr. (2025) 1 SCC 502, holding that a referral court under Section 11(6) should not conduct an intricate evidentiary inquiry into time-barred claims but leave it for determination by the arbitrator.

The court analyzed whether MCA, a non-signatory to the PA, could be bound by its arbitration clause.

It found that the PA itself repeatedly referenced MCA's ultimate decision-making authority over the league, indicating that the league was "organised and conducted essentially by MCA and Respondent No.1 is merely an operator".

The execution of the Supplementary Agreement, to which MCA was a principal party, further solidified MCA's involvement.

This agreement "materially alters and supplements the terms and conditions of the PA," making the two agreements "inextricably intertwined" and forming a "single commercial transaction".

Applying the Cox and Kings tests, the court noted MCA's "active and substantial involvement" in the "negotiation, performance, or termination of the contract".

MCA's act of approving the termination of the PA and Supplementary Agreement by Respondent No.1 was a significant indicator of its intent to be bound, making it a "veritable party".

Furthermore, MCA's continued engagement with the Applicant in meetings even after termination clearly demonstrated its participation in the performance of the contract.

The court concluded that MCA's involvement was so extensive that the PA could neither be performed nor terminated without its approval, and thus the prayer for specific performance could not be decided in MCA's absence.

Therefore, the criteria for binding a non-signatory under the "group of companies" doctrine and "composite transaction" principle were met.

Regarding the limitation objection, the court, citing Krish Spinning and Aslam Ismail Khan Deshmukh, held that a Section 11 court should not undertake an "intricate evidentiary enquiry" into whether claims are time-barred.

This issue is best left to the arbitrator.

The Applicant's contention that the termination was not acted upon and its cause of action arose later in April 2024 further supported referring the limitation issue to arbitration.

It held that MCA is a "veritable party" to the arbitration agreement contained in the PA due to its inherent and pervasive role in the league's conduct, its execution of the Supplementary Agreement, and its active involvement in the performance and termination of the contract, thereby establishing a "composite transaction".

The court also held that the objection regarding limitation should be left to the Arbitral Tribunal for determination.

Accordingly, the Commercial Arbitration Application was allowed, and Mr. Justice Nitin Jamdar, former Chief Justice of Kerala High Court, was appointed as the Sole Arbitrator to adjudicate the disputes arising from the PA and Supplementary Agreement.