The burden to establish that the Respondent had an intention to consent to arbitration agreement was on the Applicant

[Case Brief] Reckitt Benckiser (India) Private Limited v/s Reynders Label printing India Private Limited & Ors

Case name Reckitt Benckiser (India) Private Limited v/s Reynders Label printing India Private Limited & Ors
Case number Arbitration (Civil) Number 65 of 2016
Court Supreme Court of India 
Bench Justice A.M. Khanwilkar and Justice Ajay Rastogi
Author of the judgment Justice A.M. Khanwilkar
Decided on  July 1, 2019
Relevant Act/Sections Arbitration and Conciliation Act, 1996
Author of the case brief  Lavanya Gupta ([email protected]

 

Brief Facts and Procedural History:

The Petitioner and Respondent no. 1 had entered into an agreement on May 1, 2014. However, there arose various disputes between the parties which were referred to arbitration. Respondent no. 2 was impleaded as a party by the Petitioner on the ground that it was one of the group companies of which Respondent no. 1 was also a constituent. The present case is an application filed under Section 11 of the Arbitration and Conciliation Act, 1996, with regards to Respondent no. 2 as a party.

Issues before the Court of Law:

Whether or not there was an intention of Petitioner and Respondent no. 1 to bind the signatory (Respondent no. 1) and non-signatory (Respondent no. 2) parties by the agreement dated May 1, 2014?

Ratio of the Court:

No. The original agreement dated May 1, 2014 was executed between the Application and Respondent no. 1 only. Respondent no. 2 was impleaded in the dispute proceedings just because it was the holding company of Respondent no. 1. The Court examined numerous minutes of meetings, emails and other correspondences exchanged between the parties to determine their intention, if any, to bind a non-signatory party. The burden to establish that the Respondent no. 2 had an intention to consent to arbitration agreement, was on the Applicant. However, the Applicant failed to discharge the same and thus Respondent no. 2 could not be subjected to arbitration proceedings.

Decision Held:

The Respondent no. 2 was never involved in negotiation process concerning the agreement dated May 1, 2014 and was neither a signatory to the arbitration agreement. Thus, application to implead Respondent no. 2 failed.

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