Supreme Court rules arbitration clause can bind party to another instrument in composite transaction

The case concerns whether an arbitration clause in one agreement can bind a party to another instrument forming part of a composite transaction, specifically regarding the deletion of a non-signatory (respondent no. 2) from arbitral proceedings.

Petitioner: National Skill Development Corporation; Respondents: Surya Wires Private Limited & Ors.; Bench: Alok Aradhe, J.

• The Supreme Court allowed the appeal against the High Court's judgment affirming the deletion of respondent no. 2 from the arbitral proceedings.
• The Court held that an arbitration clause in one instrument can bind a party through another instrument forming part of a composite transaction.
• The Court directed the Sole Arbitrator to reconsider the deletion of respondent no. 2 from the array of parties.
• The Court referred to Section 7(5) of the Arbitration and Conciliation Act, 1996, and the principles laid down in M.R. Engineers and Inox Wind Limited cases.

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