Bombay High Court
Jupicos Entertainment Private Limited vs Probability Sports (India) Private … on 16 March, 2026
2026:BHC-OS:6638
Neeta Sawant CARAP(L) 18608 of 2025
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
COMMERCIAL ARBITRATION APPLICATION (L) NO. 18608 OF 2025
Jupicos Entertainment Private Limited ..... APPLICANT
: VERSUS :
Probability Sports (India) Private Limited and Anr. ....RESPONDENT
Mr. Prahlad Paranjpe with Mr. Vikramjit Garewal, Ms. Shweta More and
Ms. Rupa Shaw i/b Mr. Atishay Jain for the Applicant.
Mr. Rashmin Khandekar with Mr. Pranav Nair, Ms. Swati Sawant, Mr.
Milind Spose and Mr. Utkarsh Pawar i/b M/s. S.K. Legal Assoicates LLP for
Respondent No.2.
Mr. Devesh Juvekar with Mr. Mithilesh Chalke and Ms. Shivangi Goel i/b
Rajani Associates for Respondent No.1.
Digitally
signed by
NEETA
NEETA SHAILESH
SHAILESH SAWANT
SAWANT Date:
2026.03.16
15:14:01
+0530
CORAM : SANDEEP V. MARNE, J.
JUDG. RESD. ON : 27 FEBRUARY, 2026.
JUDG. PRON. ON: 16 MARCH 2026
JUDGMENT:
1) The disputes relating to right of participation in a cricket
league are sought to be arbitrated by one of the team owners against the
conductor of the league as well against the Mumbai Cricket Association,
under whose aegis the league is conducted.
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2) This is an application filed under Section 11 of the
Arbitration and Conciliation Act, 1996 (Arbitration Act) for appointment
of an arbitrator for adjudication of disputes and differences, which are
said to have arisen between Applicant and Respondents under the
Participation Agreement dated 9 March 2018. The disputes between the
parties relate to Applicant’s right to participate in T20 Mumbai League
(League) organised by Respondent No.1 under the aegis of Mumbai
Cricket Association (Respondent No.2). There is no dispute about the
existence of arbitration agreement between the Applicant and
Respondent No.1, who are signatories to the Participation Agreement
dated 9 March 2018. However, Respondent No.2 has opposed its
impleadment to the arbitration on the ground that it is a non-signatory to
the Participation Agreement. Respondent No.1, though does not dispute
existence of arbitration agreement with the Applicant, opposes
constitution of Arbitral Tribunal on the ground of Applicant’s claim being
hopelessly barred by limitation.
3) Briefly stated, facts of the case are that in February 2018,
Respondent No.2-Mumbai Cricket Association (MCA) conceptualised a
cricket league at the local level in the areas of Mumbai, Navi Mumbai, and
Thane and appointed Respondent No.1 as an agency for management and
operation of the League. Respondent No.1-Probability Sports (India) Pvt.
Ltd. (Probability) issued Invitation to Bid Document in February 2018
inviting interested parties to bid to secure the rights to operate and field
teams to participate in the first five editions of T20 Mumbai League.
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Upon expression of interest, a consortium of Jupiter City Developers
(India) Ltd. (JCDIL) and Cosmos Prime Projects Ltd. (Cosmos) were
confirmed as winning bidders for the team representing the territory of
Mumbai South Central for the first five editions of the League.
Accordingly, Letter of Intent dated 23 February 2018 was executed by
Probability in favour of the consortium, which was amended on 9 March
2018. On 9 March 2018, a Novation Agreement was executed between
Probability, consortium and Applicant-Jupicos Entertainment Pvt. Ltd.
(Jupicos) by which Jupicos was substituted as a winning bidder in the LOI
in place of consortium. Applicant-Jupicos is a Special Purpose Vehicle of
the consortium members, with JCDIL holding 85% shareholding and
Cosmos holding 15% shareholding.
4) On 9 March 2018, the Participation Agreement was executed
between Probability and Applicant-Jupicos, under which the Applicant
was granted right to operate a cricket team named ‘Shivaji Park Lions’
representing Mumbai South Central territory for the first five editions of
the League. According to the Applicant, various clauses of the
Participation Agreement (PA) make it clear that the entire decision-
making power given under the agreement was with the MCA. It is
Applicant’s case that Probability entered into the PA on behalf of MCA
and the entire league is being conducted by MCA.
5) In March 2018, the first edition of the League was held with
total six teams participating in the edition including the team of the
Applicant-Shivaji Park Lions. On 14 March 2019, MCA called upon the
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Applicant and other team owners to execute Supplementary Agreement
and accordingly on 12 April 2019, a Supplementary Agreement to the PA
was executed between the Applicant, Probability and MCA, under which
certain terms of the PA dated 9 March 2018 were supplemented/varied.
Two more teams were agreed to be added to the upcoming editions of the
League. Under the Supplementary Agreement, MCA had the sole
discretion and right to determine the schedule, format, length and
associated aspects of the remaining editions of the League. According to
the Applicant, all the terms of PA dated 9 March 2018 were incorporated
by reference in the Supplementary Agreement. It is also the case of the
Applicant that PA and Supplementary Agreement constitute one
composite transaction. There is arbitration clause in the PA, but there is
no arbitration clause in the Supplementary Agreement. According to the
Applicant however, since the two documents are executed to constitute
one composite transaction and since all the terms of PA are incorporated
in the Supplementary Agreement, there exists valid arbitration agreement
between the Applicant and both the Respondents.
6) In the second edition of the League, Applicant was required
to pay participation fees of Rs.4,56,00,000/- alongwith GST @ 18% of
Rs.82,08,000/- totaling to Rs.5,38,08,000/-. The Applicant was also called
upon to pay player and support staff fees of Rs.50,00,000/- alongwith GST
@ 18% of Rs.9,00,000/- totaling to Rs.59,00,000/-. This is how Applicant
was required to pay total fees of Rs.5,97,08,000/- towards second edition
of the League. On 23 April 2019, Applicant transferred amount of
Rs.1,00,00,000/- to Respondent No.1 towards participation fee and
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Rs.54,00,000/- towards player and support fee. A further amount of
Rs.50,00,000/- towards participation fees was transferred on 9 May 2019.
According to the Applicant, dispute arose between the team owners and
Respondents with regard to securing and protecting financial interests of
the team owners. On 9 May 2019, team owners addressed a joint
communication to the Respondents expressing concerns. On 10 May
2019, MCA sought to deny the allegations and stated that it had inter alia
assured a minimum guaranteed revenue amount of Rs.3,15,00,000/- from
Respondent No.1 towards the second edition of the League. Respondent
No.1 had also assured another Rs.25,00,000/- from one of the sponsors.
Applicant claims that it has received from Respondent No.1 only the
minimum guaranteed income of Rs.3,15,00,000/- alongwith GST@18% of
Rs.56,70,000/- minus TDS @10% of Rs.31,50,000/- amounting to
Rs.3,40,20,000/-. The Applicant transferred the entire amount of
Rs.3,40,20,000/- to Respondent No.1 towards participation fees.
Applicant claims that it has not received the amount assured from the
sponsors. According to the Applicant, it has paid a total amount of
Rs.5,61,91,000/- towards participation fees and player and support fee
(including GST) but has received income of only Rs.3,71,70,000/-
(including GST) from the second edition of the League, causing huge loss
to it. On the other hand, Respondent No.1 alleged that the Applicant
committed default of payment of Rs.35,17,000/- towards participation fee
and had also failed to deposit the amount of TDS in the two financial
years.
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7) In the above background, Respondent No.1 terminated the
PA as well as Supplementary Agreement by letter dated 24 January 2020.
According to the Applicant, despite termination, meetings were
conducted between representatives of Applicant and Respondents.
According to the Applicant, Respondent No.2-MCA directly
communicated with the team owners to resolve the disputes. In the year
2020, third edition of the League was not to be held due to COVID-19
pandemic. Applicant was thereafter invited to take part in the meetings of
the team owners in relation to the League even though the termination
was not formally withdrawn. Thereafter, several meetings were held, and
correspondence was made with MCA, in which the Applicant participated.
On 18 February 2021, the Governing Council of the League presented a
proposal before the team owners, including the Applicant, and they were
called upon to submit their counter proposals. The Applicant gave in-
principal consent to the proposal on 23 February 2021. Thereafter,
correspondence was made by MCA with the team owners including the
Applicant. On 10 November 2021, Respondent No.1 sought audit
confirmation in respect of the due amount of Rs. 35,17,000/- and the
Applicant paid the same to Respondent No.1 on 16 January 2024.
Applicant thereafter demanded No Dues Certificate and withdrawal of
termination vide emails exchanged in January and February 2024.
However, no response was received by the Applicant.
8) On 24 April 2024, Respondents held a meeting with other
team owners excluding the Applicant to discuss the third edition of the
League. Another meeting was held on 10 May 2024. Applicant protested
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against holding of meetings behind its back. On 3 May 2024, Applicant
invoked Clause 11 of Schedule 2 of the PA dated 9 March 2018, calling
upon Respondents to enter into negotiation. On 13 February 2025, one
more meeting was held with other team owners excluding the Applicant
by the MCA. On 27 March 2025, MCA invited the Applicant for a meeting.
However, since the Applicant felt that the meeting was not being
conducted by MCA in good faith, the Applicant filed Arbitration Petition
(L) No.10243/2025 under Section 9 of the Arbitration Act inter alia seeking
injunction against the Respondents from excluding the Applicant from
participating in the team owner meetings of the League. During pendency
of the petition, MCA issued advertisement for auction of teams in respect
of two territories including the territory for which the Applicant’s team
was formed. By order dated 16 April 2025, Single Judge of this Court
rejected ad-interim relief in favour of the Applicant in Arbitration
Petition (L) No.10243/2025. Applicant preferred appeal before the
Division Bench challenging the order dated 16 April 2025. However, by
order dated 7 May 2025, the Division Bench dismissed the appeal of the
Applicant. The Applicant thereafter preferred Special Leave Petition
(Civil) No.14920 of 2025. According to the Applicant, the Supreme Court
while disposing off the SLP, has clarified that observations made by the
Division Bench in paragraph 20 of its order shall have no bearing or
binding effect on the arbitral proceedings.
9) In the meantime, the Applicant invoked arbitration clause
vide notice dated 5 April 2025, which was responded to by Respondent
No.1 on 5 May 2025. Since no agreement could be reached on
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appointment of arbitrator, the Applicant has filed the present application
under Section 11 of the Arbitration Act seeking reference for adjudication
of disputes against both the Respondents.
10) Mr. Paranjpe, the learned counsel appearing for the
Applicant submits that the League is being conducted essentially by
Respondent No.2-MCA, who has full authority even under the PA, to take
all decisions relating to participation by the team owners as well as
conduct of the League. That Respondent No.1 does not have any
independent decision-making power with regard to the conduct of the
League. That the PA is executed by Respondent No.1 at the behest of the
MCA. Additionally, MCA has participated in performance of the PA. That
therefore MCA is a veritable party to the PA containing the arbitration
agreement.
11) Mr. Paranjpe further submits that PA and Supplementary
Agreement constitute one composite transaction. That both the
documents are essentially effected for the purpose of performance of
contractual obligations relating to organisation and holding of the
League. That PA is the principal/master document which contains
arbitration agreement and Supplementary Agreement is merely executed
to give shape to the PA. That Respondent No.2-MCA has specifically
taken over the obligations under the PA. That Supplementary Agreement
cannot exist on a standalone basis. That therefore the case involves
execution of multiple documents to complete same transaction. Mr.
Paranjpe relies upon judgment of Constitutional Bench in Cox and Kings
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Ltd. vs. SAP India Pvt. Ltd. and Anr 1 and ASF Buildtech Pvt. Ltd. vs.
Shapoorji Pallonji and Company Pvt. Ltd.2 in support of his contention
that MCA is a veritable party to the arbitration agreement contained in
the PA.
12) Mr. Paranjpe further submits that the Supplementary
Agreement otherwise incorporates all the terms and conditions of the PA
and that therefore the arbitration clause contained in the PA is
incorporated by reference in the Supplementary Agreement . This is how
Mr. Paranjpe submits, that there is agreement between the Applicant and
both the Respondents for adjudication of disputes through the
mechanism of private arbitration. Relying on judgment of the Apex Court
in Hindustan Petroleum Corporation Ltd. Vs BCL Secure Premises Pvt.
Ltd.3, Mr. Paranjpe submits that the issue of non-signatory being
veritable party to arbitration agreement needs to be decided by referral
court under Section 11 of the Arbitration Act rather than leaving the same
for being adjudicated by the Arbitral Tribunal.
13) Mr. Paranjpe further submits that the objection of limitation
sought to be raised on behalf of Respondent No.1 is baseless since series
of meetings and correspondence have taken place after issuance of the
termination letter dated 24 January 2020. That the cause of action has
actually arisen only on 24 April 2024 when Respondent No. 2 proceeded
to conduct meeting with the other team owners for the third edition of
1
(2024) 4 SCC 1
2
(2025) 9 SCC 76
3
2025 SCC OnLine SC 2746
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the League by excluding the Applicant. On above broad submissions, Mr.
Paranjpe would submit that Arbitral Tribunal be constituted by
appointment of a sole arbitrator for adjudication of disputes and
differences between the parties.
14) Main opposition to the Application is by the MCA. Mr
Khandekar, the learned counsel appearing for Respondent No.2-MCA
opposes the Application, contending that the MCA is not a signatory to
the PA which contains the arbitration clause. That disputes have arisen
purely between Applicant and Respondent No.1. That there is no
arbitration agreement in the Supplementary Agreement. That the claim of
Applicant about MCA being veritable party is based on a premise that
Respondent No.1 is the agent of MCA. That the argument of agency is
already rejected by the Division Bench of this Court in Section 9
proceedings.
15) Mr Khandekar submits that there is no material on record
indicating that Respondent No.1 is acting on behalf of or as an agent of
MCA or that MCA is the principal of Respondent No.1. That all payments
to the Applicant are made by Respondent No.1 and similarly, Applicant
has made all payments to Respondent No.1. That there is no financial
transaction between the Applicant and MCA. So far as the argument of
incorporation of arbitration clause in PA in the Supplementary
Agreement is concerned, Mr Khandekar submits that there is no such
incorporation. That the supplementary agreement merely refers to the
PA. That the Supplementary Agreement is executed only for the purpose
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of recording of varied terms and conditions between Applicant and
Respondent No. 1, to which MCA is a mere conforming party and that
there is nothing on record to indicate that MCA has undertaken any
obligations under the PA onto itself. That there is no clause in the
Supplementary Agreement to suggest that arbitration clause in the PA is
intended to be incorporated in the Supplementary Agreement. That
parties have not intended to incorporate arbitration clause in the PA into
the Supplementary Agreement. He relies on judgments of the Apex Court
in M.R. Engineers and Contractors Private Limited vs. Som Datt
Builders Limited4, NBCC (India) Ltd. vs. Zillion Infraprojects Pvt. Ltd. 5
and Duro Felguera, S.A. vs. Gangavaram Port Ltd. 6 in support of his
contention there is no incorporation of arbitration clause in the
Supplementary Agreement. In support of his contention of MCA not
being veritable party to the arbitration agreement contained in the PA,
Mr. Khandekar also relies on judgment of this Court in Mukesh Patel and
Ors. Vs. Pant Nagar Ganesh Krupa CHS Ltd7. Mr. Khandekar would
accordingly pray for dismissal of the application.
16) Mr. Juvekar, the learned counsel appearing for Respondent
No.1 submits that no reference to arbitration can be made since the
alleged claim of the Applicant is hopelessly barred by limitation. He
relies on judgment of this Court in Graceworks Realty & Leisure Pvt.
Ltd. Vs. Zahid Hussain Khan8 in support of his contention that cause of
4
(2009) 7 SCC 696
5
(2024) 7 SCC 174
6
(2017) 9 SCC 729
7
Commercial Arbitration Application No.389 of 2024, decided on 9 October 2025
8
2022 SCC OnLine Bom 550
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action arises on the date of issuance of termination notice. He also relies
on judgment of the Apex Court in Bharat Sanchar Nigam Limited (BSNL)
& Anr. Vs. Nortel Networks India Private Limited 9 in support of his
contention that ex facie time barred claims cannot be referred to
arbitration. He also relies on judgment of this Court in Kay Vee
Enterprises Engineers and Builders vs. Director & Secretary, Shri. Guru
Gobind Singhji Institute of Engineering & Technology 10. He would
accordingly pray for dismissal of the Application.
17) Rival contentions of the parties now fall for my
consideration.
18) The issue that arises for consideration is whether there exists
arbitration agreement between Applicant and Respondent No. 2 (MCA)
and whether MCA can be a party to arbitration between Applicant and
Respondent No. 1. The other issue is whether reference to arbitration can
be made in the light of objection raised by Respondent No. 1 about the
claim of Applicant being a dead wood.
19) Applicant has claims both against Respondent No. 1 as well
as against MCA and is desirous of adjudication thereof through a common
arbitral reference. However, arbitration agreement is contained only in
the PA executed between the Applicant and Respondent No. 1 and there
is no arbitration clause in the tripartite Supplementary Agreement
executed between the Applicant, Respondent No. 1 and MCA.
9
(2021) 5 SCC 738
10
2022 SCC OnLine Bom 7231
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20) MCA is the governing body for cricket in Mumbai, Thane and
Navi Mumbai. For promoting the sports of cricket, the MCA has decided
to estabish, organise and operate the ‘T-20 Mumbai League’ and has
appointed Respondent No. 1 as the manager of the league.
21) The case involves execution of PA between the Applicant and
Respondent No.1 on 9 March 2018, under which the Applicant has
acquired the rights to operate the cricket team ‘Shivaji Park Lions’ for
representing Mumbai South Central territory in the first five editions of
the League. There is no dispute to the position that there exists an
arbitration clause in the PA dated 9 March 2018. Clause 11 of the PA reads
thus:
11. Governing Law and Dispute Resolution
11.1 This agreement shall be governed by and construed in accordance with the
laws of the Republic of India. Subject to the dispute resolution procedure
provided below, the Courts at Mumbai, India shall have exclusive Jurisdiction in
relation to this Agreement.
11.2 If any dispute arises under this document which cannot otherwise be
amicably resolved between the Parties, such dispute shall be submitted to
negotiation among the senior management of the Parties in the manner
specified herein. Each Party will nominate a negotiator from amongst their
respective Representatives, and such designated negotiators will promptly meet
to discuss and attempt to resolve the dispute in good faith.
11.3 In the event the Parties fail to resolve the dispute through negotiation
under paragraph 11.2, such dispute shall be submitted to arbitration under The
Arbitration and Conciliation Act 1996 or any statutory modification or re-
enactment/replacement thereof then in effect and conclusively resolved by a
single arbitrator appointed by mutual consent or failing which by such process
as is laid down in said Act. All relevant Parties shall share equally the costs, fees
and other expenses of the single arbitrator appointed by them in accordance
with the Arbitration and Conciliation Act 1996.
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11.4 The venue for arbitration shall be Mumbai and the arbitration shall be
conducted in the English language.
11.5 The decision of the arbitrator shall be in writing and shall be final and
binding upon the Parties. Each Party shall bear its own lawyers’ fees and charges
and shall pay one half of the costs and expenses of such arbitration, subject
always to the final award of the arbitrator as to costs.
11.6 Each of the Parties hereby acknowledges and agrees that its failure to
participate in arbitration proceedings in any respect, or to comply with any
request, order or direction of the arbitrator, shall not preclude the arbitrator
proceeding with such arbitration and/or making a valid final award.
22) The PA itself makes it clear that MCA is the governing body
for cricket in Mumbai, Navi Mumbai, and Thane and that it is MCA who
decided to establish, organise, and operate a 20-20 cricket league
sanctioned by the BCCI in the name and style of ‘T-20 Mumbai League’.
The PA further makes it clear that Respondent No.1 was granted rights to
manage the League under the aegis of MCA. There are several clauses in
the PA, which clearly create a picture that the League was being organised
and conducted essentially by MCA and Respondent No.1 is merely an
operator. It would be apposite to extract the relevant clauses of the PA for
facility of reference:
(A) The Mumbai Cricket Association (“MCA”) is the governing body for cricket
in Mumbai, Navl Mumbai and Thane, and is a member of the BCCI (defined
below). In the interests of developing cricket and providing playing
opportunities to a wide variety of talented cricketers, the MCA has decided
to establish, organise and operate a twenty20 cricket league, which
has been sanctioned by the BCCI, for the territory of Mumbai, Navl
Mumbai and Thane, under the name and style of ‘T20 Mumbai
League’.
(B) The MCA has granted the right to manage under its aegis the League
(defined below) to PSIPL.
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2.10 It is understood and agreed by the Participant that the League is being
conducted under the aegis of the MCA in the interests of developing
cricket In Mumbai, Navi Mumbai and Thane districts and providing playing
opportunities to a wide variety of talented cricketers with a view to promote
cricket in its modern formats as known currently or as may be developed in
the future. The terms of this Agreement and all decisions and actions of
PSIPL in relation to and pursuant to this Agreement, are and shall
remain subject to the final and absolute approval of the MCA. The
Participant shall enter into this Agreement on the basis of this
understanding and shall accept the final decision of PSIPL, based on the
approval of the MCA, without demur or protest, recognising that the MCA
is the sole governing body of cricket in Mumbai, Greater Mumbai and Thane
districts, and the sole and absolute authority to finally approve all aspects of
the structure and operation of the League at law and under contract. All
decisions made above shall be final and binding on the Participant, and the
Participant, by entering into this Agreement, waives all claims and no
claims shall lie against MCA and PSIPL in any respect in relation to the
above approval and decision-making process.
3.2 Subject to the MCA’s desire and willingness to continue conducting the
League beyond the Term, PSIPL has received a covenant from the MCA that
the MCA shall undertake a renewal process for the Team, in a manner of
MCA’s choosing, within the last ninety (90) days of the Term, and shall offer
the Participant a right to match the highest qualified bid emerging from
such renewal process for the Territory, provided that this undertaking by
PSIPL shall be subject to the Participant’s continued performance of its
obligations and the consequent applicability of industry standard
termination clauses to this Agreement.
13. MCA Approval
The League is being conducted under the aegis of the MCA in the
interests of developing cricket in Mumbai, Greater Mumbai and Thane
districts and providing playing opportunities to a wide variety of talented
cricketers with a view to promote cricket in its modern formats as known
currently or as may be developed in the future. The terms of this
Agreement and all decisions and actions of PSIPL in relation to and
pursuant to this LoI are and shall remain subject to the final and
absolute approval of the MCA. The Participant shall sign this Agreement
on the basis of this understanding and shall accept that all decisions of
PSIPL shall be subject to the approval of the MCA, recognising that the
MCA is the sole governing body of cricket in Mumbai, Greater Mumbai
and Thane districts, and the sole and absolute authority to finally
approve all aspects of the structure and operation of the League at law
and under contract. All decisions made by MCA shall be final and binding
on the Participant and the Participant waives all claims and no claims shall
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lie against MCA and PSIPL in any respect in relation to the above approval
and decision making process.
(emphasis and underlining added)
23) Thus, MCA had all the decision-making powers relating to
conduct of the League. The clause in the PA that ‘The terms of this
Agreement and all decisions and actions of PSIPL in relation to and pursuant
to this Agreement, are and shall remain subject to the final and absolute
approval of the MCA’ makes it clear that all decisions relating to even the
PA were to be taken by MCA and were binding on the Applicant.
24) Thereafter, the MCA, Respondent No.1, and Applicant
executed Supplementary Agreement dated 12 April 2019. It appears that
the Supplementary Agreement was executed mainly for the purpose of
ensuring the minimum guaranteed payment to the team owners by the
Respondent No. 1. The Supplementary Agreement envisaged payment of
Participation Fee, and Team Purse and Officials Purse towards the
Second, Third, Fourth and Fifth editions respectively by the Applicant to
Respondent No.1. Applicant was supposed to issue cheques and post-
dated cheques towards such fees in respect of the five editions of the
League. Additionally, under the Supplementary Agreement, Respondent
No.1 agreed to pay to the Applicant a minimum guaranteed central rights
income of Rs.3,15,00,000/- for Second Edition, Rs.3,46,50,000/- for Third
Edition, Rs.3,81,15,000/- for Fourth Edition, and Rs.4,19,26,500/- for Fifth
Edition. Thus, the exact purport of execution of Supplementary
Agreement was to essentially guarantee certain payments to the
Applicant in respect of each of the editions of the League. Though the
guarantee was given by Respondent No.1, MCA also became signatory to
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the Supplementary Agreement. The Supplementary Agreement contains
specific reference to the PA dated 9 March 2018, which is clear from
recital (B) which reads thus :
(B) Participant has been granted certain rights to operate a Team in the T20
Mumbai League (“League”) by virtue of the Participation Agreement entered
into between Jupiter City Developers (India) Limited & Cosmos Prime Projects
Limited and PSIPL dated 09/03/2018 (“Agreement”) as novated to Participant by
means of the Novation Agreement entered into between Participant and PSIPL
dated 09/03/2018 (“Novation Agreement”) each as in the form as approved and
confirmed by the MCA.
25) Applicant, Respondent No.1 and MCA also confirmed the
terms and conditions of the PA, in the supplemented form, which is clear
from para-1 of the Supplementary Agreement:
1. Supplement to Agreement. Through this Supplementary Agreement, PSIPL
and the Participant agree, and MCA confirms and approves, with effect from the
date of this Supplementary Agreement (“Supplementary Agreement Effective
Date”), to supplement the terms of the Agreement involving the Participant to
the limited extent as follows:
26) In para-1(b) of the Supplementary Agreement, the Applicant
agreed that MCA shall have the sole discretion and right to determine the
schedule, format, length and associated aspects of the remaining editions
of the League. Clause-1(b) of the Supplementary Agreement reads thus :
b) The Participant agrees and confirms that MCA shall have the sole discretion
and right, subject to BCCI approval where relevant to determine the schedule,
format, length and associated aspects of each remaining Editions of the League
during the Term, and that PSIPL shall retain all control and decision making
over the conduct, promotion, marketing, broadcasting, sponsorship. and
associated aspects of the League.
27) Clauses-2 and 3 of the Supplementary Agreement read thus :
2. Interpretation. As of the Supplementary Agreement Effective Date, PSIPL and
the Participant agree, and MCA confirms and approves, to the variances and
forbearances from the Agreement to the limited extent as specified herein.
Except as expressly provided for herein, the Agreement shall remain unchanged
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and in full force and effect for the Term. The term “Agreement”, as used in the
Agreement and all other instruments and agreements executed thereunder;
shall for all purposes refer to the Agreement as novated to the Participant by
the Novation Agreement and supplemented by this Supplementary Agreement.
All definitions in the Agreement shall continue to apply to this Supplementary
Agreement.
3. General. This Supplementary Agreement has been executed by the Parties as
on the Supplementary Agreement Execution Date, with such execution being
effective as of the Supplementary Agreement Effective Date. This
Supplementary Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, and such counterparts together
shall constitute one instrument. A breach of this Supplementary Agreement
shall constitute a breach of the Agreement in all respects and all contractual
and other remedies available to PSIPL and Participant shall be available in
respect of the rights created herein and hereunder. It is hereby agreed and
understood by the Parties that the provisions of this Supplementary Agreement
shall not limit or restrict nor shall they preclude PSIPL from pursuing such
further and other legal actions against the Participant for any breach or non-
compliance of the terms of the Agreement, read with this Supplementary
Agreement.
28) As observed above, the PA repeatedly makes reference to
MCA and its right to take final and ultimate decisions in respect of
conduct of the League. It is Applicant’s case that after the first edition of
the League was held in March 2018, the team owners experienced lack of
transparency on the part of Respondent No.1 and therefore, Respondent
No.2-MCA called upon the team owners to execute the Supplementary
Agreement. Perusal of the Supplementary Agreement dated 12 April2019
would indicate that MCA is a party of the first part, Respondent No.1 is
party of the second part and Applicant is party of the third part to the
Supplementary Agreement. Recital-(C) states that Supplementary
Agreement is executed ‘to supplement’ the PA. By executing
Supplementary Agreement, MCA confirmed and approved to supplement
the terms of the PA. Under the Supplementary Agreement, Applicant
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agreed and confirmed that MCA had the sole discretion and right to
determine the schedule, format, length and associated aspects of each of
the editions of the League, whereas, Respondent No.1 would retain the
control and decision making over the conduct, promotion, marketing,
broadcasting, sponsorship and associated aspects of the League. Thus, the
Supplementary Agreement defined the roles of MCA and Respondent
No.1 qua conduct of the League. The scope of Respondent No.1 was
restricted to conduct, promotion, marketing, broadcasting, sponsorship
and associated aspects of the League whereas all other decisions relating
to determining the schedule, format, length and associated aspects of the
League remained in the exclusive domain of MCA. This is how MCA has
stepped in and has become part of the contract between the Applicant
and Respondent No.1 and took upon itself some of the obligations under
the PA. Under the Supplementary Agreement, Respondent No.1 agreed
not to enforce its rights to obtain bank guarantee from teams as provided
in the PA until maturity of post-dated cheques and this was made ‘subject
to approval of MCA’. Under Clause 3 of Supplementary Agreement, it was
stipulated that its breach of would constitute breach of PA.
29) As observed above, the scope of the League was also
expanded to 8 teams by MCA and this was agreed upon by the team
owners. Thus, there was give and take between MCA and team owners
under the Supplementary Agreement. The MCA ensured that Respondent
No.1 paid Minimum Guaranteed Central Rights Share to all team owners
for each edition of the League and in lieu of the same, the team owners
permitted the MCA to expand the scope of the League to 8 teams.
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30) Thus, the case involves execution of PA between the
Applicant and Respondent No.1 with references to MCA. Since the League
is ultimately held and controlled by MCA with Respondent No.1 being a
mere conductor/borrower, the MCA had the right to take all the decisions
in regard to the League even as per the PA. While MCA could have kept
itself away from contractual relations between the Applicant and
Respondent No.1, somehow it was advised to become party to the
contract and accordingly executed Supplementary Agreement dated 12
April 2019 with Applicant and Respondent No.1 and took upon itself
certain contractual obligations. MCA essentially acted as a mediator by
executing the Supplementary Agreement and ensured that the team
participants pay their respective dues to Respondent No.1 and team
participants also receive a certain minimum guaranteed amount from
Respondent No.1. For having mediated between the Applicant and
Respondent No.1, MCA extracted for itself the right to expand the scope
of the League by adding two more teams. Ordinarily, adding two more
teams would have had an adverse impact on the bids submitted by the 6
participating teams. However, they permitted MCA to add 2 more teams
because it took upon itself certain contractual obligations arising out of
the PA.
31) Thus, by executing the Supplementary Agreement, MCA has
participated in performance of the PA by Applicant and Respondent No.1.
MCA also took upon itself some of the contractual obligations under the
PA.
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32) Apart from the contractual terms between the parties, the
conduct of MCA again clearly creates an impression that it has
participated in performance of contract between the Applicant and
Respondent No. 1. After the Applicant participated in the first edition of
the League, Respondent No.1 proceeded to terminate both PA as well as
Supplementary Agreement vide notice dated 24 January 2020. However,
post termination, several meetings have taken place between the
Applicant and MCA. On 28 January 2021, MCA invited the Applicant for
introductory meeting with the newly elected Governing Council members
of the League. It appears that team owners, including the Applicant,
submitted a proposal during the course of the meeting held on 29 January
2021 with MCA. Thereafter, another meeting was organised by MCA on 18
February 2021 and the Applicant was invited for the same. In that
meeting, it appears that a proposal was placed by the MCA for approval by
the team owners, including the Applicant. On 19 February 2021,
Applicant received email from MCA calling upon it to send in-principle
approval or denial to the proposal presented by the MCA. The Applicant
expressed its in-principle approval to the proposal by email dated 23
February 2021. Again, a meeting was convened by MCA on 24 March 2021
with team owners, including with the Applicant. Applicant has also
placed on record emails of MCA calling upon the Applicant to remain
present for meetings held on 7 February 2022, 13 February 2023 etc.
33) The above correspondence would clearly indicate
participation by MCA in performance of the PA read with Supplementary
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Agreement by Applicant and Respondent No.1. MCA is thus not a stranger
to the principal contract executed between the Applicant and Respondent
No.1. Whether the decision to terminate the contract is taken by
Respondent No.1 at the behest of MCA or not is something which can be
decided by the Arbitral Tribunal. However, some part of cause of action
for the Applicant has arisen on account of refusal by MCA to permit the
Applicant to participate in the League for the year 2023. It appears that a
meeting of team owners was held by the MCA on 24 April 2024, for which
again the Applicant was not called. Thus, the grievance of the Applicant is
that though it has cleared all the dues of Respondent No.1, which was the
reason for termination and MCA always called Applicant for various
meetings ignoring the termination, the Applicant is essentially aggrieved
by the decision taken by MCA to not permit the Applicant to participate
in the League. Applicant believes that the decision in that regard is taken
not by Respondent No.1, but by MCA. From various clauses of the PA and
Supplementary Agreement, it is more than apparent that the ultimate
decision to permit a team to participate in the League is taken by MCA.
Since the League is held by the MCA, Respondent No.1 cannot allow any
team to participate in the League without the approval of the MCA.
34) The MCA is thus actively involved in execution of PA though
it is not a signatory thereto. It thereafter became signatory to the
Supplementary Agreement, which is executed for giving shape to the PA.
MCA has played an active role and has actively participated in
performance of even PA. The issue for consideration is whether
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Petitioner can be treated as a veritable party to the arbitration agreement
contained in PA?
35) In Cox and Kings (supra), the Constitution Bench has
elaborated and explained the concept of veritable party, especially in
relation to the ‘group of companies’ doctrine. The Apex Court has held
that a non-signatory to the agreement can be subjected to arbitration
without his/her prior consent on the basis of :
(i) mutual intent of parties,
(ii) relationship of non-signatory to a signatory party.
(iii) commonality of subject matter.
(iv) composite nature of transaction, and
(v) performance of contract.
36) It is held in paragraphs 101, 116, 120, and 122 of the
judgment in Cox and Kings as under:
101. A formalistic construction of an arbitration agreement would
suggest that the decision of a party to not sign an arbitration agreement
should be construed to mean that the mutual intention of the parties
was to exclude that party from the ambit of the arbitration agreement.
Indeed, corporate entities have the commercial and contractual freedom
to structure their businesses in a manner to limit their liability.
However, there have been situations where a corporate entity
deliberately made an effort to be not bound by the underlying
contract containing the arbitration agreement but was actively
involved in the negotiation and performance of the contract. The
level of the non-signatory party’s involvement was to the extent of
making the other party believe that it was a veritable party to the
contract, and the arbitration agreement contained under it.
Therefore, the group of companies doctrine is applied to ascertain the
intentions of the parties by analysing the factual circumstances
surrounding the contractual arrangements [Gary Born (n 44) 1568].
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116. Since the group of companies doctrine is a consent based theory, its
application depends upon the consideration of a variety of factual
elements to establish the mutual intention of all the parties involved. In
other words, the group of companies doctrine is a means to infer the
mutual intentions of both the signatory and non-signatory parties to be
bound by the arbitration agreement. The relationship between and
among the legal entities within the corporate group structure and the
involvement of the parties in the performance of the underlying
contractual obligations are indicators to determine the mutual
intentions of the parties. The other factors such as the commonality
of the subject matter, composite nature of the transactions, and
the performance of the contract ought to be cumulatively
considered and analysed by courts and tribunals to identify the
intention of the parties to bind the non-signatory party to the
arbitration agreement. The party seeking joinder of a non-signatory
bears the burden of proof of satisfying the above factors to the
satisfaction of the court or tribunal, as the case may be.
120. In case of multiple parties, the necessity of a common subject-
matter and composite transaction is an important factual
indicator. An arbitration agreement arises out of a defined legal
relationship between the parties with respect to a particular subject
matter. Commonality of the subject matter indicates that the conduct of
the non-signatory party must be related to the subject matter of the
arbitration agreement. For instance, if the subject matter of the contract
underlying the arbitration agreement pertains to distribution of
healthcare goods, the conduct of the non-signatory party should also be
connected or in pursuance of the contractual duties and obligations, that
is, pertaining to the distribution of healthcare goods. The determination
of this factor is important to demonstrate that the non-signatory party
consented to arbitrate with respect to the particular subject matter.
122. The general position of law is that parties will be referred to
arbitration under the principal agreement if there is a situation where
there are disputes and differences “in connection with” the main
agreement and also disputes “connected with” the subject-matter of the
principal agreement [Olympus Superstructures (P) Ltd v. Meena Vijay
Khetan, (1999) 5 SCC 65]. In Chloro Controls (supra), this Court clarified
that the principle of “composite performance” would have to be
gathered from the conjoint reading of the principal and supplementary
agreements on the one hand, and the explicit intention of the parties
and attendant circumstances on the other. The common participation
in the commercial project by the signatory and non-signatory
parties for the purposes of achieving a common purpose could be
an indicator of the fact that all the parties intended the non-
signatory party to be bound by the arbitration agreement. Thus, the
application of the group of companies doctrine in case of composite
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transactions ensures accountability of all parties who have materially
participated in the negotiation and performance of the transaction and
by doing so have evinced a mutual intent to be bound by the agreement
to arbitrate.
(emphasis added)
37) In para-127 of the judgment in Cox and Kings (supra), the
Constitution Bench has clarified that the nature and the standard of
involvement of non-signatory in performance of contract must be such
that it has actively assumed obligations or performance upon itself under
the contract. Mere incidental involvement in the negotiations or
performance of contract is not sufficient to infer consent of non-signatory
to be bound by the underlying contract or its arbitration agreement. It has
held in para-127 of the judgment as under:
127. In Cox & Kings [Cox & Kings Ltd. v. SAP India (P) Ltd., (2022) 8 SCC 1 :
(2022) 4 SCC (Civ) 45] , Surya Kant, J. observed that Reckitt Benckiser [Reckitt
Benckiser (India) (P) Ltd. v. Reynders Label Printing (India) (P) Ltd., (2019) 7 SCC
62 : (2019) 3 SCC (Civ) 453] fixed a higher threshold of evidence for the
application of the Group of Companies doctrine as compared to earlier decisions
of this Court. This Court’s approach is Reckitt Benckiser [Reckitt Benckiser (India)
(P) Ltd. v. Reynders Label Printing (India) (P) Ltd., (2019) 7 SCC 62 : (2019) 3 SCC
(Civ) 453] is indicative of the fact that the mere presence of a group of
companies is not the sole or determinative factor to bind a non-signatory to an
arbitration agreement. Rather, the Courts or tribunals should closely evaluate
the overall conduct and involvement of the non-signatory party in the
performance of the contract. The nature or standard of involvement of the
non-signatory in the performance of the contract should be such that the
non-signatory has actively assumed obligations or performance upon
itself under the contract. In other words, the test is to determine whether
the non-signatory has a positive, direct, and substantial involvement in
the negotiation, performance, or termination of the contract. Mere
incidental involvement in the negotiation or performance of the contract
is not sufficient to infer the consent of the non-signatory to be bound by
the underlying contract or its arbitration agreement. The burden is on the
party seeking joinder of the non-signatory to the arbitration agreement to prove
a conscious and deliberate conduct of involvement of the non-signatory based
on objective evidence.
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(emphasis and underlining added)
38) The judgment of the Apex Court in Cox and Kings has been
further elaborated and built-upon in subsequent judgment in ASF
Buildtech (supra).
39) Applying the tests of Cox and Kings as discussed above to the
facts of the present case, in my view, MCA is clearly a veritable party to
the arbitration agreement contained in the PA. MCA always expressed
intention to effect legal relationship with Applicant and Respondent No.1
as all decisions relating to organising and holding of the League including
participation by a team are ultimately taken by MCA. If conduct and
relationship between the MCA on one hand and Respondent No.1 and the
Applicant on the other is taken into consideration, there can be little
doubt that MCA always exhibited intention to be bound by the PA. If any
doubt was left, MCA stepped in and executed Supplementary Agreement
to which it is a principal party. Though the Supplementary Agreement
essentially governed payment terms between the Applicant and
Respondent No.1, MCA still chose to become party thereto. MCA has also
participated in termination of the contractual arrangement with the
Applicant which is clear from the following statement in the termination
notice:
With this as background, and without prejudice to any of our other legal
and contractual rights and remedies, you are hereby notified that with
reference to Clause 9.1 of the Participation Agreement and Clause 1(g)
of the Supplementary Agreement, the Participation Documents and
all your rights and entitlement thereunder stand terminated with_____________________________________________________________________________
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Neeta Sawant CARAP(L) 18608 of 2025immediate effect. The service of this Notice of Termination has been
endorsed and approved by the MCA.
(emphasis added)
As a matter of fact, while defending Section 9 Petition, MCA took specific
plea before this Court that it approved the termination, and this position
is discussed in greater details in latter part of the judgment. Thus, the
decision to terminate the PA and Supplementary Agreement also could
not be taken by the Respondent No. 1 on its own and it required approval
of the MCA. Furthermore, the source of termination of the PA is also
stated as clause 1(g) of the Supplementary Agreement. Thus, the PA is
terminated by using the power under the stipulation of the
Supplementary Agreement. This would leave no manner of doubt that the
Supplementary Agreement is intrinsically intertwined with the PA. The
contract signed my MCA is used for terminating the PA. Also, MCA has
taken the decision of termination of the PA.
40) Thus, intention on the part of MCA to be bound by the
underlying contract (PA) is writ large. If the test of level of involvement
by MCA in performance of contract is applied, it is seen that without
participation by MCA in performance of PA, no contractual obligations
therein can ever be fulfilled. MCA is fully, completely and absolutely
involved in conduct of the League. Without its approvals, it is not
permissible for any team to participate in the League. The PA cannot
neither be performed nor can be terminated without the approval of MCA.
If conduct of MCA relating to subject matter (League) is taken into
consideration, there can be little doubt that MCA has directly dealt with
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the applicant, thereby exhibiting clear intention of being bound by PA
read with Supplementary Agreement. In my view therefore, after applying
the tests laid down by Constitution Bench in Cox and Kings Ltd (supra),
there can be little doubt to the position that MCA is a veritable party to
the arbitration agreement contained in the PA.
41) It is also contended on behalf of the Applicant that the PA
and Supplementary Agreement execute a composite transaction and that
therefore, the arbitration clause in PA can also be enforced for seeking
performance of contractual obligations by MCA out of the composite
transaction. I do find force in the submission. The Supplementary
Agreement cannot be performed on its own. It is inextricably intertwined
with the PA. Both documents are ultimately executed to complete a
common transaction. In Ameet Lalchand Shah and Ors. vs. Rishabh
Enterprises and Anr11, a sale purchase agreement was executed for
purchase of products, which were to be leased to another company and
which did not contain arbitration clause. A separate equipment lease
agreement was executed between the purchaser of products and the
lessee, under which the lessee agreed to pay rent in respect of the leased
products to the purchaser. The lessee defaulted in payment of rent and
the purchaser filed a suit seeking declaration that the sale purchase
agreement as well as equipment lease agreement were vitiated by fraud
and were void. The seller of the equipment (defendant) filed application
under Section 8 of the Arbitration Act for reference of dispute to
Arbitration. The High Court dismissed the Section 8 application holding
11
(2018) 15 SCC 678
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that the Equipment Lease Agreement, which had arbitration clause could
not be treated as mother/principal agreement. The Apex Court further
held that though there were different agreements involving separate
parties, the same were executed to effect a single commercial project.
The Apex Court referred to its judgment in Chloro Controls India (P)
Ltd. v. Severn Trent Water Purification Inc.12 and held in pars-22, 23 and
24 as under:
22. In Chloro Controls , this Court was dealing with the scope and
interpretation of Section 45 of the Act, Part II of the Act and in that
context, discussed the scope of relevant principles on the basis of which
a non-signatory party also could be bound by the arbitration agreement.
Under Section 45 of the Act, an applicant seeking reference of disputes
to arbitration can either be a party to the arbitration agreement or any
person claiming through or under such party. Section 45 uses the
expression “… at the request of one of the parties or any person claiming
through or under him…” includes non-signatory parties who can be
referred to arbitration provided they satisfy the requirements of Sections
44 and 45 read with Schedule I of the Act.
23. In para 73 of Chloro Controls , this Court held as under: (SCC p. 683)
“73. A non-signatory or third party could be subjected to arbitration
without their prior consent, but this would only be in exceptional cases.
The court will examine these exceptions from the touchstone of direct
relationship to the party signatory to the arbitration agreement, direct
commonality of the subject-matter and the agreement between the
parties being a composite transaction. The transaction should be of a
composite nature where performance of the mother agreement may not
be feasible without aid, execution and performance of the
supplementary or ancillary agreements, for achieving the common
object and collectively having bearing on the dispute. Besides all this, the
court would have to examine whether a composite reference of such parties
would serve the ends of justice. Once this exercise is completed and the court
answers the same in the affirmative, the reference of even non-signatory
parties would fall within the exception afore-discussed.”
12
(2013) 1 SCC 641
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24. In a case like the present one, though there are different
agreements involving several parties, as discussed above, it is a
single commercial project, namely, operating a 2 MWp Photovoltaic
Solar Plant at Dongri, Raksa, District Jhansi, Uttar Pradesh.
Commissioning of the Solar Plant, which is the commercial
understanding between the parties and it has been effected through
several agreements. The agreement — Equipment Lease Agreement (14-
3-2012) for commissioning of the Solar Plant is the principal/main
agreement. The two agreements of Rishabh with Juwi India: (i)
Equipment and Material Supply Contract (1-2-2012); and (ii)
Engineering, Installation and Commissioning Contract (1-2-2012) and
the Rishabh’s Sale and Purchase Agreement with Astonfield (5-3-2012)
are ancillary agreements which led to the main purpose of
commissioning the Photovoltaic Solar Plant at Dongri, Raksa, District
Jhansi, Uttar Pradesh by Dante Energy (lessee). Even though, the Sale
and Purchase Agreement (5-3-2012) between Rishabh and Astonfield
does not contain arbitration clause, it is integrally connected with the
commissioning of the Solar Plant at Dongri, Raksa, District Jhansi, U.P.
by Dante Energy. Juwi India, even though, not a party to the suit and
even though, Astonfield and Appellant 1 Ameet Lalchand Shah are not
signatories to the main agreement viz. Equipment Lease Agreement (14-
3-2012), it is a commercial transaction integrally connected with
commissioning of Photovoltaic Solar Plant at Dongri, Raksa, District
Jhansi, U.P. Be it noted, as per Clause (v) of Article 4, parties have agreed
that the entire risk, cost of the delivery and installation shall be at the
cost of the Rishabh (lessor). Here again, we may recapitulate that
engineering and installation is to be done by Juwi India. What is evident
from the facts and intention of the parties is to facilitate procurement of
equipments, sale and purchase of equipments, installation and leasing
out the equipments to Dante Energy. The dispute between the parties to
various agreements could be resolved only by referring all the four
agreements and the parties thereon to arbitration.
(emphasis added)
42) The judgment of the Apex Court in Ameet Lalchand Shah has
been affirmed in three Judge Bench decision in Cox and Kings Ltd. vs.
SAP India Pvt. Ltd. and Anr.13 while making reference to the larger
bench. The judgment in Ameet Lalchand Shah also finds approval in the
judgment in ONGC Ltd. v. Discovery Enterprises (P) Ltd 14. Finally, the
13
(2022) 8 SCC 1
14
(2022) 8 SCC 42
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Constitution Bench in Cox and Kings has also approved the view taken in
Ameet Lalchand Shah. The Constitution Bench held in paras-36 and 219
in Cox and Kings as under:
36. In Ameet Lalchand Shah v. Rishabh Enterprises [Ameet Lalchand
Shah v. Rishabh Enterprises, (2018) 15 SCC 678 : (2019) 1 SCC (Civ) 308] , a two-
Judge Bench of this Court was dealing with an arbitral dispute arising out of
four interconnected agreements executed towards a single commercial project.
The issue was whether the four agreements were interconnected to refer all the
parties to arbitration. In that case, all the parties were not signatories to the
main agreement containing the arbitration clause. This Court relied on Chloro
Controls [Chloro Controls India (P) Ltd. v. Severn Trent Water Purification Inc.,
(2013) 1 SCC 641 : (2013) 1 SCC (Civ) 689] to hold that a non-signatory, which is
a party to an interconnected agreement, would be bound by the arbitration
clause in the principal agreement. It observed that in view of the composite
nature of the transaction, the disputes between the parties to various
agreements could be resolved effectively by referring all of them to arbitration.
219. The subsequent decision in Ameet Lalchand Shah v. Rishabh
Enterprises [Ameet Lalchand Shah v. Rishabh Enterprises, (2018) 15 SCC 678 :
(2019) 1 SCC (Civ) 308 : 2018 INSC 450] is yet another instance where this Court
has allowed a non-signatory to be party to an arbitration agreement, in
connected contracts, on the ground of business efficacy, noting that all
agreements were executed for a single commercial project. This approach was
noted in the subsequent decision of Discovery Enterprises [ONGC
Ltd. v. Discovery Enterprises (P) Ltd., (2022) 8 SCC 42 : (2022) 4 SCC (Civ) 80 :
2022 INSC 483] , where the learned Chief Justice has noted : (SCC p. 69, para 28)
“28. … In Ameet Lalchand [Ameet Lalchand Shah v. Rishabh Enterprises,
(2018) 15 SCC 678 : (2019) 1 SCC (Civ) 308] , the Court did not explicitly
invoke the Group of Companies doctrine to bind a non-signatory, rather it
relied onChloro Controls [Chloro Controls India (P) Ltd. v. Severn Trent
Water Purification Inc., (2013) 1 SCC 641 : (2013) 1 SCC (Civ) 689] to hold
that a non-signatory would be bound by the arbitration clause in the mother
agreement, since it is a party to an inter-connected agreement, executed to
achieve a common commercial goal.”
(emphasis supplied)
43) This Court in its recent judgment in Mahindra Mangilalji
Jain vs. M/s Radha Construction Co and Ors. 15 has referred to the
15
Commercial Arbitration Petition (L) No. 12427 of 2025 decided on 4 March 2026.
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judgment of Apex Court in Ameet Lalchand Shah and has held in 39 as
under:
39) In my view, the ratio of judgments in Ameet Lalchand Shah and
Cox and Kings Ltd. (supra) would squarely apply in present case where multiple
documents are executed by parties to give effect to a composite transaction. The
MOU is inseparably intertwined with Retirement Deed and does not have its
own legs to stand on. The MOU therefore cannot be separated from the Deed of
Retirement, notwithstanding the ‘entire agreement’ clause. The MOU, on its
own, does not seek to execute any separate transaction and only provides for a
methodology for payment of consideration under the MOU. In my view
therefore, reference to arbitration can be made by invoking arbitration clause in
the Deed of Retirement, even though the Petitioner seeks to enforce the
contractual obligations flowing out of the MOU.
44) In my view therefore, the ratio of the judgment in Ameet
Lalchand Shah would squarely apply to the present case also. In the
present case, the PA is executed between Applicant and Respondent No.
1, but the Supplementary Agreement is executed between MCA,
Respondent No. 1 and Applicant. But both the agreements ultimately
execute a single commercial transaction. The transaction is of composite
nature where performance of the mother agreement (PA) is not feasible
without aid, execution and performance of the Supplementary
Agreement. Can it be said that PA can be performed on its own by
ignoring the stipulations of Supplementary Agreement? The answer is
emphatically in the negative. The Supplementary Agreement materially
alters and supplements the terms and conditions of the PA. The PA can be
performed only in the manner provided for in the Supplementary
Agreement. In my view therefore, the case is squarely covered by the
judgments of the Supreme Court in Chloro Controls and Ameet Lalchand
Shah (supra) and therefore even non-signatory to the PA (MCA) can be_____________________________________________________________________________
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Neeta Sawant CARAP(L) 18608 of 2025roped in the arbitration by following the principle of composite
transaction.
45) Mr. Khandekar has relied on judgment of learned Single
Judge of this Court in Mukesh Patel (supra), which in my view has no
application to the facts of the present case. In Mukesh Patel, there were
disputes between the society and the earlier developer and the society
had appointed new developer to complete the redevelopment process.
The earlier developer sought appointment of arbitrator for adjudication of
disputes not just with the society but also with the new developer. It is in
the light of those peculiar facts that the learned Single Judge of this Court
held that the concept of veritable party discussed in judgment in Cox and
Kings and ASF Buildtech could not be imported to make the new
developer a party to arbitration between the society and the earlier
developer. In redevelopment agreement, the new developer appointed by
the society can never be treated as the one participating in performance
of the terminated development agreement. The two development
agreements together do not form part of a composite transaction as the
two transactions are distinct and different. The second development
agreement is executed not to supplement the first one but because the
first one is terminated. Therefore, the judgment of this court in Mukesh
Patel has no application to the facts of the present case.
46) More recently, in Space Master Realtors Vs. Mulund
Sadhyaprakash CHSL16 this Court has discussed the principles governing
treatment of a non-signatory to the contract as veritable party to the
16
Commercial Arbitration Petition No. 35545 of 2025 decided on 6 March 2025
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Neeta Sawant CARAP(L) 18608 of 2025
arbitration agreement contained in that contract. It is broadly held that
where a non-signatory voluntary participates in performance of contract
and creates an impression on the opposite party that it has taken over
obligations under the contract, such non-signatory can be treated as a
veritable party to the arbitration agreement. This Court has held that
mere factum of the non-signatory being a beneficiary of the contract is
not sufficient but there must be will and intent to be bound by the
contract by a non-signatory.
47) Though not strenuously argued, the Applicant has also
pleaded the ground of incorporation of arbitration clause of PA in the
Supplementary Agreement. In my view, it is not necessary to go into this
aspect since existence of arbitration agreement between the Applicant
and MCA can otherwise be inferred by applying the doctrine of veritable
party and composite transaction. I therefore find it unnecessary to go into
the issue as to whether there is only a reference to the contractual terms
of PA in the Supplementary Agreement or whether parties intended to
incorporate even arbitration clause of PA in the Supplementary
Agreement. It is therefore not necessary to discuss the ratio of the
judgments in M.R. Engineers, NBCC and Duro Felguera (supra).
48) Mr. Khandekar has strongly relied on judgment of this Court
delivered in the Appeal filed by the Applicant against the order refusing
to grant ad-interim measures in Section 9 Petition. As observed above,
the Applicant had filed Arbitration Petition (L) No.10243/2025 seeking
interim measures to restrain the Respondents from conducting the
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Neeta Sawant CARAP(L) 18608 of 2025
League by excluding participation of Applicant’s team. A Single Judge of
this court refused to grant ad-interim relief on the grounds of inordinate
delay, non-challenge of termination notice, ratification of termination
notice by MCA, and PA not creating any proprietary rights in respect of
the territory, the same being a mere conducting agreement. However,
prima facie findings recorded by the learned Single Judge in para-21(c) of
the order dated 16 April 2025 are in favour of the Applicant, which read
thus :
(c) I also find no merit in the contention that the Termination Notice dated 24th
January 2020 was not ratified by the MCA. Firstly, the Termination Notice itself
expressly records that the same was issued under instructions and with the
approval of the MCA, and secondly, clause 1(g) of the Supplemental Agreement,
upon which reliance has been placed by the Petitioner vested the sole power to
terminate both agreements with Respondent No. 1. Thus, the Petitioners
contention that the termination lacked approval of the MCA is plainly
untenable.
(emphasis added)
49) Thus, MCA itself took a position before this Court in Section
9 Petition that it has participated in termination of the PA between the
Applicant and Respondent No.1. This is clear from following submissions
made on behalf of MCA:
16. Mr. Kamat then submitted that the contention of the Petitioner that
the termination was not ratified by the MCA was plainly misconceived
since (i) the termination notice specifically recorded ‘the service of notice of
termination has been endorsed and approved by the MCA and that (ii) Clause
1(g) of the Supplemental Agreement gave Respondent No. 1 the sole discretion
to terminate the Supplemental Agreement and other agreements previously
executed by and between the Petitioner and Respondent No. 1, including the
Participation Agreement. He then pointed out that the Termination Notice
was issued by Respondent No. 1 specifically under clause 1(g) of the
Supplemental Agreement. He also then pointed out that the email dated 22nd
November 2019 addressed by Respondent No. 1, calling upon the Petitioner to
cure the material breach, also expressly stated that it was issued under
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Neeta Sawant CARAP(L) 18608 of 2025instructions from and approved by the MCA. It was thus that he submitted
that the Petitioner’s contention that the termination was not ratified by
MCA was factually misconceived.
(emphasis added)
The above stand taken by the MCA before this Court that it has approved
the termination of Applicant’s contract would again make the MCA a
veritable party to the arbitration agreement contained in the PA.
50) After the Single Judge of this Court refused to grant ad-
interim measures in Section 9 Petition, Applicant filed Arbitration Appeal
(L) No.12967/2025 before the Division Bench of this Court. It appears that
for claiming interim measures before the Appeal Court, the Applicant
raised the plea of Respondent No.1 acting as agent of MCA. The Appeal
court did not prima facie find substance in the contention and held that
the PA was entered into between the Applicant and Respondent No.1 on
principal to principal basis. It also appears that in the Appeal preferred by
the Applicant, the Division Bench has recorded a contradictory finding
than the one recorded by the leaned Single Judge about termination
notice having approval of MCA. However, it is not necessary to delve
deeper into that aspect. Ultimately, the findings recorded by the Division
Bench are only prima facie in nature and are recorded for the purpose of
examining whether the ad-interim measures deserved to be granted at
that stage. While dismissing the appeal, the Division Bench of this Court
held in para-20 as under:
20. So far as irreparable loss is concerned, Jupicos participated in two editions
till 2019. It is almost after four years that the entire outstanding payments were
made by Jupicos to Probability Sports in January 2024. Jupicos has already_____________________________________________________________________________
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Neeta Sawant CARAP(L) 18608 of 2025invoked the arbitration clause and therefore the remedy of claiming damages in
case the termination notice is held to be illegal and bad in law is available.
Having perused the order of the learned Single Judge we find no reason to
interfere with the same in the limited jurisdiction that we have in this Appeal
under Section 37 of the said Act.
51) When Applicant approached the Supreme Court challenging
the judgment of the Division Bench, by order dated 21 May 2025, it has
clarified that the Court dealing with petition under Section 9 of the
Arbitration Act cannot decide about scope and extent of claim to be put
forth in the course of arbitrator. The Supreme Court accordingly clarified
that the observations made by the Division Bench in para-20 of the
judgment would not have any bearing or binding effect on arbitration
proceedings. The order of the Supreme Court reads thus :
We find no good ground and reason to interfere with the impugned order.
However, we may clarify that it is not for the Court dealing with a petition
under Section 9 of the Arbitration and Conciliation 1 SLP(C) No. 14943/2025
Act, 1996, to decide as to what should be the scope and extent of the claim to be
put forth in the course of the arbitration. To that extent, the observation in
paragraph 20 of the impugned order shall have no bearing or binding effect on
the arbitration proceedings, as and when initiated.
Subject to the above observation, the special leave petition is dismissed.
52) Thus, it is clarified by the Supreme Court in order dated 21
May 2025 that the observations made by the Division Bench in para-20 of
the judgment about availability of another remedy shall not have any
bearing or binding effect on the arbitral proceedings. Applicant contends
that the clarification would mean that Applicant can claim all reliefs_____________________________________________________________________________
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Neeta Sawant CARAP(L) 18608 of 2025including the relief of performance of contract before the arbitrator. This
issue can be decided by the arbitral tribunal.
53) In my view therefore, reliance by MCA on the judgment of
Division Bench does not assist it for establishing that it cannot become
party to arbitration initiated between the Applicant and Respondent No.1.
54) In addition to applicability of principle of veritable party and
composite transaction for roping in MCA to arbitral proceedings between
the Applicant and Respondent No.1, there is one more aspect which
would make MCA a necessary party to the arbitral proceedings. By seeking
specific performance of the PA read with Supplementary Agreement, the
Applicant would claim right to participate in the remaining editions of
the League. The League is ultimately held by MCA and no team can
participate in the League without MCA’s nod. Respondent No.1 does not
have any discretion in the matter and cannot, on its own, permit the
Applicant to participate in the League without the approval of MCA.
Therefore, the prayer of specific performance of PA and Supplementary
Agreement cannot be decided in absence of MCA. Such is the extent of
participation by MCA in performance of the contract and even in
termination thereof, that without its consent Applicant cannot
participate in the League. This again makes MCA bound by the arbitration
agreement contained in the PA.
55) Coming to the objection of limitation sought to be raised by
Mr. Juvekar on behalf of Respondent No.1, the law on the subject has
been developed in SBI General Insurance Company Limited vs. Krish
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Neeta Sawant CARAP(L) 18608 of 2025
Spinning17, in which the Supreme Court has held that while exercising
reference jurisdiction under Section 11(6) of the Arbitration Act must not
conduct an intricate evidentiary enquiry into the question whether the
claims raised by the applicant are time barred and should leave that
question for determination by the arbitrator. It has held in paras-136 and
137 as under :
136. Thus, we clarify that while determining the issue of limitation in exercise
of the powers under Section 11(6) of the 1996 Act, the Referral Court should
limit its enquiry to examining whether Section 11(6) application has been filed
within the period of limitation of three years or not. The date of
commencement of limitation period for this purpose shall have to be construed
as per the decision in Arif Azim [Arif Azim Co. Ltd. v. Aptech Ltd., (2024) 5 SCC
313 : (2024) 3 SCC (Civ) 358 : 2024 INSC 155] . As a natural corollary, it is
further clarified that the Referral Courts, at the stage of deciding an application
for appointment of arbitrator, must not conduct an intricate evidentiary enquiry
into the question whether the claims raised by the applicant are time-barred
and should leave that question for determination by the arbitrator. Such an
approach gives true meaning to the legislative intention underlying Section
11(6-A) of the Act, and also to the view taken in Interplay Between Arbitration
Agreements under the Arbitration Act, 1996 & the Stamp Act, 1899, In
re [Interplay Between Arbitration Agreements under the Arbitration Act, 1996 &
the Stamp Act, 1899, In re, (2024) 6 SCC 1 : 2023 INSC 1066] .
137. The observations made by us in Arif Azim [Arif Azim Co. Ltd. v. Aptech Ltd.,
(2024) 5 SCC 313 : (2024) 3 SCC (Civ) 358 : 2024 INSC 155] are accordingly
clarified. We need not mention that the effect of the aforesaid clarification is
only to streamline the position of law, so as to bring it in conformity with the
evolving principles of modern-day arbitration, and further to avoid the
possibility of any conflict between the two decisions that may arise in future.
These clarifications shall not be construed as affecting the verdict given by us in
the facts of Arif Azim [Arif Azim Co. Ltd. v. Aptech Ltd., (2024) 5 SCC 313 : (2024)
3 SCC (Civ) 358 : 2024 INSC 155] , which shall be given full effect to
notwithstanding the observations made herein.
17
(2024) 12 SCC 1
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56) The principle is reiterated by the Apex Court in Aslam Ismail
Khan Deshmukh Versus. ASAP Fluids Pvt. Ltd. & Anr. 18 in which it has
held in paras-43, 44 and 45 as under:
43. Therefore, while determining the issue of limitation in the exercise of
powers under Section 11(6) of the 1996 Act, the referral Court must only
conduct a limited enquiry for the purpose of examining whether the Section
11(6) application has been filed within the limitation period of three years or
not. At this stage, it would not be proper for the referral Court to indulge in an
intricate evidentiary enquiry into the question of whether the claims raised by
the petitioner are time-barred. Such a determination must be left to the
decision of the arbitrator.
44. After all, in a scenario where the referral Court is able to discern the frivolity
in the litigation on the basis of bare minimum pleadings, it would be incorrect
to assume or doubt that the Arbitral Tribunal would not be able to arrive at the
same inference, especially when they are equipped with the power to undertake
an extensive examination of the pleadings and evidence adduced before them.
45. As observed by us in Krish Spg. [SBI General Insurance Co. Ltd. v. Krish Spg.,
(2024) 12 SCC 1 : 2024 SCC OnLine SC 1754] , the power of the referral Court
under Section 11 must essentially be seen in light of the fact that the parties do
not have the right of appeal against any order passed by the referral Court under
Section 11, be it for either appointing or refusing to appoint an arbitrator.
Therefore, if the referral Court delves into the domain of the Arbitral Tribunal
at the Section 11 stage and rejects the application of the claimant, we run a
serious risk of leaving the claimant remediless for the adjudication of their
claims.
57) The above principles are also enunciated by the Apex Court
in In Re : Interplay between Arbitration Agreements under the
Arbitration Act, 1996 and the Stamp Act, 1899 19. In the light of the
above judgments, it is not necessary to discuss the judgments relied upon
by Mr. Juvekar in BSNL and Grace Works (supra). Even otherwise, it is the
case of the Applicant that the termination notice dated 24 January 2020
18
(2025) 1 SCC 502
19
(2024) 6 SCC 1
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was never acted upon and the Applicant was called for meetings by MCA
for participating in the League. It is Applicant’s case that the cause of
action arose in April 2024 when it was denied participation in the meeting
held by MCA.
58) Considering the above position, it would not be possible for
Reference Court to finally rule as to whether the claim sought to be raised
by the Applicant are within the limitation or time barred. This court
would adopt hands-off approach and leave the issue of limitation to be
decided by the Arbitral Tribunal.
59) The conspectus of the above discussion is that there exists
arbitration agreement between the Applicant and both the Respondents.
It would therefore be appropriate to constitute Arbitral Tribunal
comprising of a sole arbitrator.
60) I accordingly proceed to pass the following order:
A) Mr. Justice Nitin Jamdar, former Chief Justice of Kerala High Court
is appointed as the Sole Arbitrator to adjudicate upon the disputes
and differences between the parties arising out of the PA and
Supplementary Agreement referred to above. The contact details of
the Arbitrator are as under :
Mobile No. :- 9819829319
Email ID :- [email protected]
B) A copy of this order be communicated to the learned sole Arbitrator
by the Advocate for the Applicant within a period of one week from_____________________________________________________________________________
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Neeta Sawant CARAP(L) 18608 of 2025the date of uploading of this order. The Applicant shall provide the
contact and communication particulars of the parties to the
Arbitral Tribunal alongwith a copy of this order.
C) The learned sole Arbitrator is requested to forward the statutory
Statement of Disclosure under Section 11(8) read with Section
12(1) of the Act to the parties within a period of 2 weeks from
receipt of a copy of this order.
D) The parties shall appear before the learned sole Arbitrator on such
date and at such place as indicated by him, to obtain appropriate
direction with regard to conduct of the arbitration including fixing
a schedule for pleadings, examination of witnesses, if any, schedule
of hearings etc.
E) The fees of the sole Arbitrator shall be as prescribed under the
Bombay High Court (Fee Payable to Arbitrators) Rules, 2018 and the
arbitral costs and fees of the Arbitrator shall be borne by the parties
in equal portion and shall be subject to the final Award that may be
passed by the Tribunal.
61) All rights and contentions of the parties are expressly kept
open to be raised before the Arbitral Tribunal.
62) With the above directions, the Commercial Arbitration
Application is allowed and disposed of. There shall be no order as to
costs.
[SANDEEP V. MARNE, J.]
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