A Hong Kong firm won $7M in US arbitration. India's top court just made it enforceable against a company that never signed the deal.

A company that never signed an arbitration agreement was ordered to pay $6,948,100. The Supreme Court just said — yes, that's enforceable.

The fight began in a Kansas City boardroom, the arbitrator's gavel falling on a document that would travel across oceans. But its real end came in a New Delhi courtroom, where the Supreme Court answered a question that has haunted cross-border commerce for decades: can a foreign arbitral award be enforced against a company that never put pen to paper on the arbitration agreement?

The answer, delivered by Justice R.F. Nariman in August 2021, was yes — and it came with a roadmap for every business that has watched a counterparty shift assets to a related entity to avoid paying a debt.

When the Hong Kong firm came calling

Integrated Sales Service Ltd. (ISS), a Hong Kong company, had a straightforward deal with DMC, an Indian company. ISS would help sell DMC's medical transcription services abroad, earning a commission on every deal it brought in. For a while, it worked. Then the commissions stopped flowing.

ISS alleged that DMC's chairman, Upadhyaya, who controlled operations, had deliberately shifted DMC's medical transcription business to new companies — the Gemini Bay entities — that he also controlled. The purpose, ISS claimed, was simple: starve ISS of its earned commissions by making the money disappear into a corporate maze.

ISS initiated arbitration in Kansas City under the agreement. On 28 March 2010, the arbitrator, Alain Frecon, applying Delaware law, pierced the corporate veil (a legal doctrine that allows a court to look past a company's separate legal identity and hold individuals or related companies liable for its obligations). He held Upadhyaya and the Gemini Bay entities jointly and severally liable with DMC, awarding $6,948,100. The award document, thick with findings on corporate control and bearing the arbitrator's signature, was the first anchor in a long legal chain.

The Bombay High Court's split decision

ISS then came to India to enforce this foreign award under Part II of the Arbitration and Conciliation Act, 1996 (the law governing enforcement of international arbitration awards in India). On 18 April 2016, the Single Judge of the Bombay High Court at Nagpur took a narrow view: enforcement was allowed against DMC, the company that had signed the arbitration agreement, but refused against Gemini Bay Transcription (GBT) and Upadhyaya, who had never signed it. The courtroom fell quiet as the judge read out an order that split liability — signatory bound, non-signatories free. The only sound was the rustle of paper as lawyers noted the precise terms of the order.

On 4 January 2017, the Division Bench reversed that decision entirely. It allowed enforcement against all parties — signatory and non-signatory alike. The two judges' differing orders on the same facts created a tension that only the Supreme Court could resolve. GBT and Upadhyaya appealed to the Supreme Court.

The core question: who can be bound?

The Supreme Court framed the issue with surgical precision: can a foreign arbitral award rendered under the alter ego/veil-piercing doctrine against non-signatories to the arbitration agreement be enforced under Part II of the Arbitration Act?

The appellants argued that Section 48(1)(a) of the Act (the provision that allows a court to refuse enforcement if the arbitration agreement was invalid or the parties lacked capacity) protected them. They said they were not "parties" to the agreement, so the award could not bind them. The provision, they insisted, covered their situation.

ISS countered that Section 48(1)(a) uses the word "parties" deliberately — it refers only to those who actually signed the agreement. A non-signatory's objection falls outside this provision entirely. The proper ground, ISS argued, was Section 48(1)(c) (which deals with awards that go beyond the scope of the submission to arbitration), and even there, the alter ego doctrine meant the award was within scope.

Why the Supreme Court read the statute differently

Justice Nariman began with the text. Section 44 of the Act defines a "foreign award" by reference to "persons" — a broader term. Section 48(1)(a) uses "parties" — a narrower one. Reading non-signatories into Section 48(1)(a), the court held, would run contrary to the express language of the statute. As Justice Nariman observed, the use of "persons" in Section 44 and "parties" in Section 48(1)(a) was a deliberate legislative choice — one that could not be ignored. The court's voice, steady and precise, filled the silent courtroom as he read this distinction aloud.

Then the court turned to Section 46, which says a foreign award is "binding on the persons as between whom it was made." Crucially, the Indian Act uses "persons" here, not "parties to the arbitration agreement." This was a deliberate choice. The Australian equivalent uses "parties to the arbitration agreement," but India's Parliament chose different words — words that permit enforcement against non-signatories who are bound by the award through doctrines like alter ego or veil piercing.

The court also clarified what "proof" means under Section 48(1). The appellants wanted to lead oral evidence to show they were not bound. The court shut that door: "proof" means established on the basis of the record of the arbitral tribunal and relevant materials — not a full trial. This, the court said, is consistent with the pro-enforcement bias of the New York Convention (the 1958 international treaty on recognition of foreign arbitral awards, which India has signed) and the objective of speedy disposal. The weight of the arbitral record, not the testimony of witnesses, would decide the matter.

The pro-enforcement bias wins

The Supreme Court drew heavily on its own precedents — Renusagar Power Co. Ltd. v. General Electric Co., Ssangyong Engg. & Construction Co. Ltd. v. NHAI, Vijay Karia v. Prysmian Cavi E Sistemi SRL — to reinforce a principle that runs through all of them: the New York Convention has a pro-enforcement bias, and the grounds for refusing enforcement in Section 48(1)(a) to (e) must be construed narrowly, not expansively. No review on the merits of the award is permissible.

The court also distinguished the UK Supreme Court's decision in Dallah Real Estate and Tourism Co v Ministry of Religious Affairs, Govt of Pakistan, where enforcement was refused against a non-signatory. In Dallah, the arbitral tribunal had no jurisdiction over the non-signatory under the governing law. In this case, the arbitrator had applied Delaware law and found the alter ego doctrine applicable — and the Indian court was not to second-guess that finding on the merits. The silence in the Supreme Court courtroom as Justice Nariman read this distinction was telling: the line between a jurisdictional failure and a merits finding had been drawn. The only sound was the turning of a page.

The appeals by GBT and Upadhyaya were dismissed. The Division Bench's order enforcing the foreign award against all parties was upheld.

THE PLAY: When enforcing a foreign award in India against a non-signatory, argue under Section 48(1)(c) — not Section 48(1)(a) — and rely on the arbitral record, not oral evidence, to prove the alter ego connection.

The $6,948,100 award was enforceable. The company that never signed the agreement was bound. The Supreme Court had drawn a line that will shape Indian arbitration law for years to come.