The court determined that non-signatories may be bound by arbitration agreements through their actions and involvement in the contractual relationship, allowing enforcement of arbitral awards.

JUDGMENT :

Somasekhar Sundaresan, J.

Context and Factual Background:

1. The captioned appeals are filed under Section 37 of the Arbitration and Conciliation Act, 1996 (“the Act”) challenging orders passed by the Learned District Court Pune, disposing of challenges to arbitral awards passed by a three-member arbitral tribunal in three separate arbitral awards, in all of which the issues are just the same.

2. In a nutshell, the Appellant, Rajasthan State Co-op Oil Seed Growers Federation Ltd. (“Tilam Sangh”) was desirous of setting up silos for storage and process of mustard seeds in three different locations – a 100-tonnes per day facility at Merta City (Nagaur District); a 50-tonnes per day facility at Gangapur City (Sawaimadhopur District); and a 100-tonnes per day facility at Sri Ganganagar (Ganganagar District) – in the State of Rajasthan. Towards this end, Tilam Sangh engaged National Heavy Engineering Co-operative Ltd. (“NHEC”) as the Project Management Consultant (“PMC”), which in turn engaged Shirke Structurals Pvt. Ltd. (“Shirke”) to carry out the works involved in each of the aforesaid projects. Shirke underwent a name change later.

3. Work was completed, and payment claims were made by Shirke, which filed civil suits. NHEC filed applications under Section 8  of the Act indicating that the disputes are subject matter of an arbitration agreement. These were allowed and an arbitral tribunal was constituted in each matter, and arbitral awards came to be passed.

4. The Learned Advocates for the parties have consented to take up Appeal No. 47 of 2013 as the representative lead matter, indicating that adjudication of issues in that Appeal would be dispositive of all Appeals. By consent of the parties, all references to facts, dates and the record are made to those contained in Appeal No. 47 of 2013, on the understanding that this judgement would cover all the captioned proceedings.

5. A brief overview of relevant facts is set out below:-

a) On November 6, 1987, Tilam Sangh executed an agreement with NHEC as the PMC (“PMC Contract”);

b) PMC executed an agreement dated September 28, 1989 (“Agreement”) appointing Shirke as the contractor to carry out the work. The work was to be commenced by October 5, 1989 and completed by January 20, 1990;

c) Work was completed and a certificate of completion was issued on October 31, 1993;

d) On April 4, 1994, Shirke made a claim for a sum of Rs. ~4.83 lakh;

e) Shirke filed a Special Civil Suit 1734 of 1995 (“Civil Suit”) against Tilam Sangh and NHEC, but it was on an application filed by NHEC, the Civil Suit was rejected, referring the parties to arbitration;

f) On May 20, 2002, Tilam Sangh filed a Written Statement in response to the Statement of Claim and also filed a Counter-claim;

g) On April 4, 2003, Tilam Sangh claimed to have made a mistake, withdrew the Counter-Claim, and claimed that the Learned Arbitral Tribunal had no jurisdiction since there was no privity of contract between Tilam Sangh and Shirke under the Agreement, and the arbitration clause could not bind Tilam Sangh;

h) On June 2, 2003, an arbitral award was passed awarding Rs. ~4.83 lakh coupled with interest at 15% per annum from September 4, 1993 and at 12%  per annum from May 1, 2002 until realisation (“Arbitral Award”). Both Tilam Sangh and NHEC were made jointly liable to pay the amount to Shirke under the Arbitral Award;

i) Special Leave Petition filed in the Supreme Court was disposed of giving leave to Tilam Sangh to raise jurisdictional grounds when pursuing a challenge under