Financial Interest Is Not Consent: Limits On Impleading Non-Signatories In Arbitration

Introduction

The jurisprudence on impleadment of non-signatories in arbitration has evolved significantly, particularly after the Constitution Bench decision of the Supreme Court in Cox and Kings Ltd. v. SAP India Pvt. Ltd. While Indian courts have moved away from a rigid signatory-only approach, they have simultaneously cautioned against indiscriminate expansion of arbitral jurisdiction. The decision of the Himachal Pradesh High Court in Indian Institute of Technology, Mandi v. Central Public Works Department & Anr.¹ is a clear reaffirmation of this balance. The judgment highlight that mere financial interest or project ownership does not amount to consent to arbitrate.

Factual Background