Share Purchase Dispute & Joinder of Non-Signatory Company in Arbitration
Delhi HC – Signal to the Investors – Share Purchase Agreements & Disputes involving corporate acts can be referred to arbitration even if company is not a party to the such agreements and arbitration clause
Delhi HC – Joinder of Non-signatory Company to Arbitration – Arbitral Tribunal, not referral Court, will decide if a company is a “veritable party” to the Share Purchase Agreements and the Disputes
Comments on the post of Bar and Bench and the Judgment dated 2.7.2026 of the High Court of Delhi in ARB.P> 145/2026 of Chirag Jain Vs. Rahul Jain and another with connected petition
Two shares purchase agreements were between investor Chirag Jain and Seller Nos.1 and 2 Promoters & Directors, respectively. Chirag Jain filed two petitions for appointment of Arbitrator. Seller Nos.1 and 2 have consented for appointment of Arbitrator.
The question of impleadment of respondent no.2 Company – non-signatory to the arbitration agreement arose in the matter.
Hence, excluding respondent no. 2 from the arbitral reference, at this stage, would not only be premature but would rather fragment the dispute, leaving a necessary party to the controversy outside the adjudication and render any award incomplete and potentially unenforceable under the Arbitration Act.
- In the overall conspectus of the case, this Court is of the view that the final determination of whether respondent no. 2/non-signatory is bound by the Arbitration Agreement, would be on the basis of full factual evidence and application of legal doctrine, which is a matter that must be, and is accordingly, left to the Arbitral Tribunal to decide.
