Facts
SEPL and RWCL entered into a Technical Collaboration Licence Agreement in 2019. In 2021, they executed a Joint Venture Agreement (JVA) creating RWIPL, and in 2023 SEPL and RWCL entered into a MoU concerning liaison, logistics and related services.
Disputes arose concerning alleged breach of the JVA’s non-compete covenant and amounts allegedly payable under the MoU. SEPL invoked arbitration under the JVA and MoU. RWCL contended that the disputes were governed instead by the arbitration clause in the 2019 License Agreement, which provided for arbitration in Seoul. It also contended that RBIPL, a non-signatory subsidiary, could not be bound by the arbitration agreements.
Issues Framed
- Whether disputes arising under the JVA and MoU were governed by their respective arbitration clauses or by the arbitration clause in the License Agreement.
- Whether the non-signatory RBIPL could be made subject to the arbitration proceedings.
Court’s Reasoning
(a) Scope of inquiry under S.11
S.11(6-A) requires minimal judicial intervention and restricts the Referral Court’s inquiry to the prima facie existence of the arbitration agreement. Once such existence is established, the parties should ordinarily be referred to arbitration.
(b) Independent operation of JVA and MoU
The License Agreement, JVA and MoU operated in different fields. Further, Article 25 of the JVA and Clause 10.8 of the MoU provided that those agreements were exclusive concerning their subject matter and superseded prior agreements.
Accordingly, disputes arising exclusively under the JVA and MoU were prima facie governed by their respective arbitration clauses. Any overlap with disputes under the License Agreement could be considered by the arbitrator and was not a ground to refuse reference at the threshold.
(c) Non-signatory RBIPL
Whether RBIPL, a wholly owned subsidiary of RWCL, was bound by the arbitration agreement was contentious, particularly because it was alleged to have been incorporated in breach of the JVA. The Court held that this issue should also be relegated to the arbitrator.
Held
The arbitration petitions were allowed. Hon’ble Mr. Justice Ramesh Deokinandan Dhanuka, Former Chief Justice of the Bombay High Court, was appointed as the Sole Arbitrator.
Conclusion
At the S.11 stage, once the prima facie existence of an arbitration agreement is established, disputes concerning the scope of that agreement and the involvement of a non-signatory should ordinarily be left to the arbitral tribunal rather than determined at the referral stage.
Relevant Para
19. Section 11(6-A) of the 1996 Act prescribes the principle of minimal judicial intervention by restricting the scope of inquiry to prima facie existence of the arbitration agreement. Once the prima facie existence of an arbitration agreement is adduced before the Referral Court, it ought to appoint an arbitrator and refer the parties to arbitration.
Case Details
Citation: 2026 INSC 1098
Decided on: 08 October 2026
Case Title: Shubham Equipment Private Limited & Anr. v. Rothwell Water Company Limited & Ors.
Court: Supreme Court of India
Bench: Surya Kant, CJI; Joymalya Bagchi, J.; V. Mohana, J.