A company didn't sign the contract. The court still said it must face arbitration.

The company that never signed the contract was told: you're still coming to arbitration.

ONGC had paid ₹55.78 crore in customs duty for a hired vessel. The contractor was supposed to complete the paperwork and get the money back. The vessel left Indian waters. The duty drawback never came. When ONGC tried to bring the entire corporate group to arbitration, one company raised a simple defence: we never signed the agreement. The Supreme Court just answered whether that defence was enough.

The courtroom fell silent as the bench considered the implications. The file on the table was thick with documents, but one thing was missing—a signature from Jindal Drilling & Industries Ltd. (JDIL) on the contract. The smell of old paper and the weight of years of litigation hung in the air.

When the vessel sailed away with ₹55 crore

In March 2006, ONGC awarded a contract to Discovery Enterprises Pvt. Ltd. (DEPL) for operating a vessel. The deal came with a standard clause: ONGC would pay customs duty upfront, and DEPL would handle the duty drawback process—claiming back the duty from the government and reimbursing ONGC. The physical act of the vessel slipping out of Indian waters marked the collapse of that arrangement.

DEPL failed to complete the formalities. Then the vessel left Indian waters. The duty drawback claim collapsed. ONGC was left staring at a loss of ₹55.78 crore.

ONGC invoked arbitration against DEPL. But it also named Jindal Drilling & Industries Ltd. (JDIL) as a co-respondent. ONGC's argument: both companies belonged to the same DP Jindal Group, and JDIL was the real beneficiary of the contract. The group of companies doctrine, ONGC said, meant JDIL couldn't hide behind the fact that its signature wasn't on the dotted line.

The signature that wasn't there

JDIL objected immediately. It filed an application under Section 16 of the Arbitration and Conciliation Act, 1996—the provision that allows an arbitral tribunal to rule on its own jurisdiction. The company's position was simple: the arbitration agreement under Clause 37 of the contract bound only the signatories—ONGC and DEPL. JDIL was not a party to the agreement. The tribunal had no jurisdiction over it.

ONGC pushed back. It filed an application seeking discovery and inspection of documents—asking the tribunal to compel JDIL to produce records that would show the corporate relationship between the two group companies. ONGC wanted to prove that JDIL was so intertwined with DEPL that the group of companies doctrine should apply. The silence in the tribunal room when the discovery application was deferred was palpable—a procedural door had been quietly shut.

The tribunal deferred ONGC's discovery application. It never decided it. Instead, in October 2010, it passed an interim award holding that it lacked jurisdiction over JDIL. The tribunal applied a strict reading of Sections 2(1)(h) and 7 of the Arbitration Act—the definitions of 'party' and 'arbitration agreement'—and concluded that only a signatory could be bound.

Why the High Court said no

ONGC appealed to the Bombay High Court under Section 37 of the Act—which allows appeals against certain orders of the arbitral tribunal. The High Court dismissed the appeal in June 2012. It agreed with the tribunal: JDIL was not a signatory, and the arbitration agreement could not be stretched to cover it.

But there was a complication. Separately, ONGC had withheld payments due to JDIL under four other contracts, claiming adjustment against the ₹55.78 crore loss. JDIL had initiated a second arbitration and won. The two proceedings were now tangled. ONGC approached the Supreme Court.

The group of companies doctrine—what it actually means

The Supreme Court bench—Justice Dr. Dhananjaya Y. Chandrachud, Justice Surya Kant, and Justice Vikram Nath—had to decide a question that has troubled commercial arbitration for years: can a company that never signed an arbitration agreement be forced into arbitration because it belongs to the same corporate group as the signatory?

The group of companies doctrine is not written into the Arbitration Act. It has been developed by Indian courts through a series of judgments. In Chloro Controls India Pvt. Ltd. v. Severn Trent Water Purification Inc. (2013), the Supreme Court held that a non-signatory could be bound by an arbitration agreement if the circumstances showed a mutual intention to bind both signatory and non-signatory parties. In Cheran Properties Ltd. v. Kasturi & Sons Ltd. (2018), the court further clarified that the doctrine applies when the transaction is composite—when the performance of the contract involves multiple entities within a group.

The key factors, the court said, include: the mutual intent of the parties, the relationship of the non-signatory to the signatory, the commonality of the subject matter, the composite nature of the transaction, and the actual performance of the contract.

The evolution of this doctrine is critical. In Indowind Energy Ltd. v. Wescare (I) Ltd. (2010), the court had already begun to recognise that corporate groups could not fragment liability by using separate legal entities as shields. Chloro Controls then crystallised the principle: where the transaction is composite and the non-signatory is intimately involved in the performance, the arbitration agreement can bind them. Cheran Properties reinforced this by holding that the doctrine is not an exception to the principle of privity but an application of the true construction of the parties' intent. The court in MTNL v. Canara Bank (2020) further clarified that the doctrine applies even in cases involving state entities, provided the circumstances demonstrate mutual intent. Other precedents like Ameet Lalchand Shah v. Rishabh Enterprises (2018) and Duro Felguera v. Gangavaram Port Limited (2017) have also shaped the contours of this doctrine, ensuring that procedural fairness does not become a tool for evasion.

What the tribunal got wrong

The Supreme Court identified three specific errors in the tribunal's interim award.

First, the tribunal had failed to decide ONGC's discovery application. ONGC had asked for documents that would show how DEPL and JDIL operated within the DP Jindal Group—shared management, common financial arrangements, intertwined operations. The tribunal deferred this application and then passed its jurisdictional ruling without ever addressing it. The court called this a fundamental procedural error. A tribunal that forecloses discovery relevant to establishing jurisdiction, the court said, vitiates its own jurisdictional finding. The Supreme Court observed that "an arbitral tribunal that forecloses discovery and inspection relevant to establishing jurisdiction under the group of companies doctrine vitiates its own jurisdictional finding"—a direct statement that anchored the court's reasoning in the procedural failure.

Second, the tribunal had applied a rigid, textual interpretation of Sections 2(1)(h) and 7 without considering the group of companies doctrine at all. The court noted that the doctrine had been recognised in Indian law since Chloro Controls (2013)—and even before that, in Indowind Energy Ltd. v. Wescare (I) Ltd. (2010). The tribunal's interim award was passed in 2010, but the Supreme Court was hearing the appeal in 2022. By then, the law had clearly evolved. The tribunal's failure to engage with the doctrine was a legal error.

Third, the tribunal had structured its proceedings in a way that prevented ONGC from making its case. It decided to hear ONGC's applications only after the jurisdiction plea was disposed of. This meant ONGC was forced to argue jurisdiction without the documents that could prove the group relationship.

The Supreme Court's answer

The court allowed ONGC's appeal. It set aside the interim award and directed that the matter be remitted to a fresh arbitral tribunal. The new tribunal, the court said, must decide the jurisdiction issue afresh—after allowing ONGC's discovery application and after properly considering the group of companies doctrine as developed in Chloro Controls and Cheran Properties.

The court also clarified an important point about appeals under Section 37. Parliament, it said, has not restricted the appellate court's powers under Section 37(2)(a) by importing the limited grounds available under Section 34—which governs challenges to final awards. While courts must defer to a tribunal's findings on jurisdiction, that deference is not absolute—especially when the tribunal has made procedural errors or failed to apply settled law. The court noted that the tribunal's decision was "not conclusive" and that appellate courts must examine whether the tribunal properly exercised its jurisdiction.

The judgment did not decide whether JDIL was actually bound by the arbitration agreement. That question will now go back to a new tribunal. But the court made clear that the group of companies doctrine is alive and available—and that a tribunal cannot ignore it simply because the non-signatory's name is missing from the contract.

The implications for commercial arbitration are significant. The judgment reaffirms that the group of companies doctrine is not a marginal exception but a well-established principle of Indian arbitration law. It also sends a clear message to arbitral tribunals: procedural fairness requires that discovery applications relevant to jurisdiction must be decided before jurisdictional rulings. A tribunal that shortcuts this process risks having its award set aside.

For parties seeking to bind non-signatories, the lesson is clear: file your discovery application early and ensure the tribunal rules on it before any jurisdictional determination. For non-signatories, the defence of "we never signed" is no longer automatic—the court will look at the substance of the relationship, not just the form of the contract.

THE PLAY: If you are a party seeking to bind a non-signatory to an arbitration agreement, file your discovery application early—and ensure the tribunal decides it before any jurisdictional ruling.

The vessel had sailed. But the case had not.