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2021 (12) TMI 968 - DELHI HIGH COURTSeeking appointment of a Sole Arbitrator for adjudication of disputes pertaining to the Facility Agreement - HELD THAT:- Respondent No. 1, which an LLP, has signed the Facility Agreement through its partner Mr. Ajay Yadav. The constitution of Respondent as a limited liability partnership is not in dispute. Mr. Ajay Yadav also does not deny his signatures or the fact that he is a partner of Respondent No. 1. Thus, the execution of the Facility Agreement, his authority being implied, would prima facie bind Respondent No. 1. Respondent No. 1 and 3 cannot wriggle out of the arbitration agreement contained in the Facility Agreement by merely claiming that her partner Mr. Ajay Yadav has acted without consent or concurrence, particularly when the receipt of the sum of ₹ 1,46,00,00,000/- by Respondent No. l has not been denied by any of the Respondents. Further, mere absence of signature of Respondent No. 3 cannot render the agreement ex-facie invalid, since Respondent No. 1 is a limited liability partnership. Reference against her is based on her being a partner of Respondent No. 1 firm, which is not denied - the controversy regarding invalidity of the agreement, as raised by the Respondents can, at the highest, only cast a doubt in the mind of the Court. It is only in rare circumstances, where, the Court is of the opinion that an agreement is ex-facie invalid or non-est, should the Court decline referring the parties to the arbitration. This is certainly not such a case. Prima facie test regarding the existence of the arbitration agreement is met in the instant case. This brings the Court to the question of referring Respondent No. 4 who is undoubtedly a non-signatory to the Facility Agreement. There is no dispute on the proposition that the scope of an arbitration agreement is limited to the parties who entered into it and that those claiming under or through them. However, under exceptional circumstances, a non-signatory or third party can also be subjected to arbitration. Thus, the short question is whether the Petitioner is able to discharge this heavy onus for seeking reference against Respondent No. 4. The obligations under this Agreement also pertain to Respondent No. 4 and to the operation of its business and contractual commitments. The terms of the Facility Agreement, the conduct of the parties, the background leading to execution of the Facility Agreement – all spell out the true intention of the parties, i.e., the successful implementation of the resolution plan which resulted in Respondent No. 1 acquiring Respondent No. 4. Undoubtedly, the performance of Facility Agreement is intrinsically interlinked with the assets of Respondent No. 4 and may not be feasible without its direct involvement. Pertinently, any order/ proceedings relating to the execution of the Facility Agreement would surely and directly impact Respondent No. 4, and therefore the adjudication of any disputes arising thereunder would necessarily require its presence. This Court is also guided by the ‘group of companies doctrine’ as expounded in the case of MAHANAGAR TELEPHONE NIGAM LTD. VERSUS CANARA BANK & ORS. [2019 (8) TMI 576 - SUPREME COURT], where the group company of Canara Bank, being a non-signatory to the arbitration agreement, was also referred to arbitration after considering the composite nature of transaction, the commonality of subject matter, and the fact that final resolution of the disputes would not be feasible without joining of such party. There is no impediment for this Court to allow the petition qua all the Respondents - Petition allowed.
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