Can Section 11 of the Arbitration and Conciliation Act, 1996 be Invoked to Appoint an Arbitrator for a Foreign-Seated International Arbitration by Relying on Ancillary Contracts?

LawSikho
November 22, 2025
Category: Supreme Court of India

Summary

Category	Data
Court	Supreme Court of India
Case Number	ARBIT.PETITON No.-000065 – 2023
Diary Number	34759/2023
Judge Name	HON’BLE MR. JUSTICE PAMIDIGHANTAM SRI NARASIMHA
Bench	HON’BLE MR. JUSTICE PAMIDIGHANTAM SRI NARASIMHA HON’BLE MR. JUSTICE ATUL S. CHANDURKAR
Precedent Value	Binding authority reaffirming that Section 11 cannot be invoked for foreign-seated arbitration and that the arbitration clause in the principal (mother) agreement prevails over ancillary India-seated clauses
Overrules / Affirms	Affirms existing precedents (BALCO, Mankastu, BGS SGS SOMA JV, PASL Wind)
Type of Law	International Commercial Arbitration; Interpretation of Arbitration and Conciliation Act, 1996
Questions of Law	Does Section 11 apply where parties have chosen a foreign seat and foreign curial law? Can subsequent independent contracts novate or supersede the arbitration clause of a “mother agreement”? Is a composite reference justified under the group of companies doctrine? Does issue estoppel arise from a prior Section 45 order?
Ratio Decidendi	The Court held that (i) the dispute under the Buyer and Seller Agreement (BSA) was an international commercial arbitration with a clear choice of the seat in Benin and curial law of Benin, excluding Part I of the Act by operation of Section 2(2); (ii) subsequent Sales Contracts and High Seas Sale Agreements (HSSAs) were discrete, ancillary instruments that neither referred to nor novated the BSA, so their India-seated arbitration clauses could not override the mother agreement’s clause; (iii) the Benin-seated tribunal validly exercised kompetenz-kompetenz and rendered an award; (iv) the Delhi High Court’s Section 45 dismissal constituted issue estoppel on the identical jurisdictional facts; and (v) the group of companies doctrine cannot automatically bind non-signatories absent clear common intent.
Judgments Relied Upon	Bharat Aluminium Co. v. Kaiser Aluminium Technical Services Inc. (BALCO) Mankastu Impex Pvt. Ltd. v. Airvisual Ltd. BGS SGS SOMA JV v. NHPC Ltd. Cox & Kings Ltd. v. SAP India (Group of Companies) PASL Wind Solutions v. GE Power Conversion India Balasore Alloys Ltd. v. Medima LLC Hope Plantations Ltd. v. Taluk Land Board Peermade Anil v. Rajendra
Logic / Jurisprudence / Authorities Relied Upon by the Court	Statutory interpretation of Section 2(1)(f) and 2(2) (Part I vs. Part II exclusion) Doctrine of kompetenz-kompetenz Mother agreement principle (principal contract prevails absent clear novation) Territorial principle: supervisory jurisdiction lies with courts at the seat Issue estoppel from final orders on jurisdictional facts Restrictive application of group of companies doctrine
Facts as Summarised by the Court	The petitioner and respondent No. 1 executed a Buyer and Seller Agreement (BSA) on 6 June 2019 (and an Addendum on 9 January 2021) with arbitration in Benin under Benin law. Respondent No. 1 assigned supply obligations via Sales Contracts to respondent No. 2 (arbitration in New Delhi under Act, 1996) and via HSSAs to respondent No. 3 (arbitration under Indian Arbitration Act, 1940). Disputes on quantity and payment arose, respondent No. 1 invoked Benin arbitration and obtained an award on 21 May 2024; petitioner’s anti-arbitration suit in the Delhi High Court under Section 45 was dismissed on 8 November 2024; petitioner filed Section 11 petition in the Supreme Court, which was dismissed.

Practical Impact

Category	Impact
Binding On	All Indian courts and tribunals deciding on arbitrability and appointments under Section 11 of the Act, 1996
Persuasive For	High Courts and parties in arbitration-related litigation, especially on the territorial scope of Part I
Distinguishes	Limited application of the group of companies doctrine for impleading non-signatories
Follows	BALCO; Mankastu Impex; BGS SGS SOMA JV; PASL Wind Solutions; Balasore Alloys

What’s New / What Lawyers Should Note

The Supreme Court reiterates that Section 11 cannot be used to appoint arbitrators for foreign-seated international commercial arbitrations under Part I.
A “mother agreement” with an express foreign seat and governing law cannot be novated or displaced by subsequent ancillary contracts lacking clear substitution language.
An arbitral award rendered by a foreign tribunal precludes a parallel Section 11 petition in India on the same subject-matter.
A prior dismissal of an anti-arbitration injunction under Section 45 creates issue estoppel on the identical jurisdictional facts in subsequent Section 11 proceedings.
The group of companies doctrine will not bind non-signatories absent evidence of a common intention to arbitrate together.

Summary of Legal Reasoning

Characterisation as international commercial arbitration under Section 2(1)(f) triggered exclusion of Part I by Section 2(2) because the seat was in Benin.
The BSA’s Article 11 and the Addendum’s Article 5 collectively designated Benin as both seat and curial law—Mankastu and BGS SGS SOMA JV principles.
Sales Contracts (with respondent No. 2) and HSSAs (with respondent No. 3) were limited-purpose, consignment-based agreements that did not refer to or novate the BSA—Balasore Alloys principle.
The Benin tribunal validly asserted jurisdiction (kompetenz-kompetenz) and issued a final award.
The Delhi High Court’s Section 45 dismissal of the anti-arbitration injunction constituted issue estoppel on the same operative facts—Hope Plantations, Anil v. Rajendra.
The group of companies doctrine requires clear evidence of common intention; shareholding overlap alone is insufficient—Cox & Kings.

Arguments by the Parties

Petitioner

All disputes form a composite transaction under the TGI Group; group of companies doctrine mandates a single reference.
Subsequent Sales Contracts and HSSAs novate the BSA arbitration clause in favour of India-seated arbitration.
Benin was only a venue, not the juridical seat; later agreements show Indian seat and law (Mankastu Impex).
Any Benin award is unenforceable in India as Benin is not a reciprocating territory under Section 44(b).
The Delhi High Court’s Section 45 order has no bearing on Section 11 jurisdiction.

Respondent No. 1

Part I (including Section 11) is inapplicable as the BSA (and Addendum) specify arbitration in Benin under Benin law (international arbitration).
Sales Contracts and HSSAs are independent agreements; respondent No. 1 is not a party and cannot be bound by their Indian arbitration clauses.
There was no novation; the BSA remains the mother agreement with its seat and law.
The Delhi High Court’s final Section 45 dismissal creates issue estoppel on jurisdiction.

Respondent No. 2

Each Sales Contract is a standalone consignment agreement; its arbitration clause is limited to disputes “arising out of or relating to this Agreement.”

Respondent No. 3

Each HSSA is a separate high-seas sale contract; its arbitration clause (under Indian Arbitration Act, 1940) pertains only to that contract.

Factual Background

The petitioner and respondent No. 1 executed a Buyer and Seller Agreement on 6 June 2019 (with an Addendum on 9 January 2021) for cottonseed cake supplies, governed by Benin law with arbitration in Benin. Respondent No. 1 assigned performance via Sales Contracts with respondent No. 2 (arbitration in New Delhi under the Act, 1996) and via HSSAs with respondent No. 3 (arbitration under the Indian Arbitration Act, 1940). Disputes over quantity and payment led respondent No. 1 to invoke Benin arbitration, and the Benin tribunal issued an award on 21 May 2024. The petitioner’s anti-arbitration injunction under Section 45 in the Delhi High Court was dismissed on 8 November 2024. The petitioner then filed a Section 11 petition in the Supreme Court, which was dismissed.

Statutory Analysis

Section 2(1)(f): Defines “international commercial arbitration” to include disputes with at least one foreign party.
Section 2(2): Part I applies only if the seat of arbitration is in India; foreign-seated arbitrations fall under Part II.
Section 11(6), (12)(a): Empowers the Supreme Court to appoint arbitrators under Part I for India-seated arbitrations.
Section 44(b): Allows the Central Government to declare reciprocating territories for award enforcement; Benin is not so declared.

Alert Indicators

✔ Precedent Followed