Arbitration is a prominent and widely sought mechanism for consensually resolving commercial disputes without court intervention. Since consent is the bedrock of arbitration, a third-party cannot be forcibly joined in the arbitration proceedings as this would undermine the settled principle of party-autonomy and privity of contract. However, in complex, multi-layered, and multi-party commercial disputes, it is often observed that some parties may not explicitly consent by formally executing the arbitration agreement, but their implicit consent can be inferred through their acts and conduct, such as relationship with the contracting parties, commonality of subject-matter, and involvement in the performance of contract, etc. When mutual consent is discernible, a non-signatory may become a party to the arbitration agreement to prevent multiplicity of proceedings and timely adjudication of disputes.

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Authored by our Partner, Abhinav Sharma and Trainee Associate, Mayank Bansal.