Do Courts Comply with S. 11(8) While Appointing Arbitrators?

 Section 11(8) of the Arbitration and Conciliation Act, 1996 ("Act"), as it exists now, reads:

"(8) The Supreme Court or, as the case may be, the High Court or the person or institution designated by such Court, before appointing an arbitrator, shall seek a disclosure in writing from the prospective arbitrator in terms of sub-section (1) of section 12, and have due regard to—

(a) any qualifications required for the arbitrator by the agreement of the parties; and

(b) the contents of the disclosure and other considerations as are likely to secure the appointment of an independent and impartial arbitrator."

This provision contemplates that before appointing a person as arbitrator, the Supreme Court or the High Court should seek a disclosure in writing in terms of S. 12(1) of the Act and have due regard to qualifications requirement for the arbitrator under the arbitration agreement and the contents of the disclosure and other conditions which are likely to secure and independent and impartial arbitrator.

This provision was introduced through the 2015 amendments and is effective from 23.10.2015. However, rarely does the Supreme Court or the High Courts mention compliance of S. 11 in their orders appointing arbitrator under Section 11. See, for instance, the order of the SC dt. 02.02.2026 in OT Technology Inc. v. HDFC Bank Ltd., Arb. Pet. 8/2026, which makes no mention of S. 11(8) explicitly or impliedly. 

Likewise, see this Order dt. 03.02.2026 of the Delhi High Court in Paramjit Singh v. FITTJEE Limited, Arb. Pet. 2/2026, which also does not make any reference to S. 11(8) nor complies with it. Worse, the High Court appoints the arbitrator and postpones compliance with S. 11(8) to after the appointment. It also states: 

"13... iv) The Sole Arbitrator is requested to furnish a declaration in terms of Section 12 of the Arbitration Act prior to entering into the reference. In the event of any impediment to the Arbitrator’s appointment on that count, the parties are given liberty to file an appropriate application before this Court."

The effect of this is to cast the burden on the parties for non-compliance by the High Court of the statutory mandate provided in S. 11(8)! That is not the correct approach. 

Contrarily, a perusal of the recent orders of the MP High Court, reveals compliance by the High Court of the mandate under S. 11(8). For instance, in JVS Foods Pvt. Ltd. v. MP State Agro Industries Development Corporation Ltd., 2026:MPHC-JBP:42122, the High Court observes in its Order dt. 17.06.2026:

"19. Considering the list of empanelled Arbitrators issued by the M.P. Arbitration Centre, Jabalpur, following order is passed : (i) Shri Alok Verma, Former Judge, High Court of M.P., AddressAkar, HIG, 1/463, Arvind Vihar, Baghmogaliya, Bhopal (MP)-462043, Mobile No. 79748-54407, 94250-07479, Tel. No.0755-4930600, Email - alokver55@gmail.com, who has consented in terms of Section 11(8) of the Act of 1996, is appointed as sole Arbitrator to resolve the dispute between the parties in the case." (emphasis added).

Whether this amounts to a complete compliance of S. 11(8) is not apparent from the aforesaid observations. However, the attempt to comply with the statutory mandate is at least clear from this Order, in contrast with the orders of the Supreme Court and the Delhi High Court.

Readers may throw more light on whether High Courts and the Supreme Court complies with the statutory mandate under S. 11(8).

Can the Arbitrator Lift the Corporate Veil? Yes, No & But Wait(!)

Can the Arbitrator Lift the Corporate Veil? Yes and No. Yes, if you are in Delhi and Gujarat. No, if you are in Maharashtra and Tamil Nadu. 

In this post, we are not concerned with lifting the corporate veil for extending an arbitration agreement to a non-signatory or at the stage of execution/ enforcement of an arbitral award, but whether an arbitral tribunal has the power to lift the corporate veil. 

The Delhi High Court has decided in a case that the arbitrator could. The Bombay and the Madras High Courts have held that they cannot. Below is a table that summarises this position:

This helpful article of 2021 summarises the legal position. Luckily, this point has been settled by the Supreme Court at least to a limited extent. Sugesan Transport, a decision of the Madras High Court is a recent addition to this list of cases where courts have held that an arbitral tribunal does not have the power to lift the corporate veil. 

In this post, we are not going to do a detailed critique of Sugesan Transport. Our objective is very limited: the purpose is to point out that precedents rendered on this aspect between Chloro Controls, 2012 INSC 436 and Cox & Kings (I), 2023 INSC 1051 should not be relied on, given the recent judgment of the Supreme Court in ASF Buildtech Private Limited vs. Shapoorji Pallonji and Company Private Limited, 2025 INSC 616. 

In ASF Buildtech, the Supreme Court cautioned against relying on the decisions rendered further to Chloro Controls:

"31. The aversion or misconception that loomed before the various High Courts as regards the inhibition of an arbitral tribunal to resort to the principles of 'group of companies', 'alter-ego', agency etc. or to put it more simply, to implead a non-signatory to the arbitration proceedings on its own accord can be deftly traced to two pertinent observations that were made in Chloro Controls (supra).

40. Thus, due to the aforesaid, a misconception plagued the position of law that an arbitral tribunal does not have the authority or power to implead a non-signatory to the arbitration proceedings, and that only the courts are empowered to do so. It was largely in this backdrop that the decisions of Oil and Natural Gas Corporation Ltd. (supra), Balmer Lawrie & Co. Ltd. (supra), Sudhir Gopi (supra), V.G. Santhosam (supra) and other decisions of various different High Courts came to be rendered."

The purpose of this post, as stated before, is not to examine whether Sugesan Transport was wrongly decided, but to tentatively suggest that Sugesan Transport's reliance on pre-Cox & Kings decision in Sudhir Gopi v. Indira Gandhi National Open University, 2017 SCCOnLine Delhi 8345, on this issue was not the "direct answer" (Para 20, Sugesan Transport) to the question. Perhaps, the point was not even raised by counsels. ASF Builders does not even seem to be cited in Sugesan Transport. On the broader issue of impleadment of non-signatories by the arbitral tribunal, the Supreme Court went on to hold in ASF Builders that after Cox & Kings I, even arbitral tribunals could rely on various principles laid down to extend arbitration agreements to non-signatories: 

"However, as discussed, the decision of Cox and Kings (I) (supra) has made it abundantly clear that the legal basis for the application of the 'Group of Companies' doctrine or any other principle for determining mutual consent is in the definition of "party" Under Section 2(1)(h) read with the meaning of "arbitration agreement" Under Section 7 of the Act, 1996. Since both the aforesaid provisions are not confined in their scope to either the courts or the arbitral tribunal, and rather exists ubiquitously on the statute book and is common or indifferent to both the courts and arbitral tribunals, there cannot be any gainsaying that even the arbitral tribunal now after the decision of Cox and Kings (I) (supra) could be said to be clothed with the power to take recourse to the various principles for determining mutual consent, and thereby implead a non-signatory to the arbitration, if such person is found to be bound to the arbitration agreement." (emphasis added)

In ASF Builders, the Supreme Court cited Cox & Kings (I) on the test of the Group of Companies doctrine:

"... it held that the test for determining applicability of the ‘Group of Companies’ doctrine envisages a cumulative and holistic determination of the factual aspects such as the relationship between and among the legal entities within the corporate group structure, their underlying contractual obligations, the commonality of the subject matter and the composite nature of the transactions undertaken, and their overall participation in the project / subject-matter for achieving a common purpose."

The doctrine cannot be applied casually due to "mere incidental involvement in the negotiation or performance of the contract" but the inquiry must "involve a comprehensive and holistic assessment of the composite relationship among the entities concerned, the underlying transactions, and the attendant circumstances evincing mutual intention to be bound by the arbitration agreement. The evaluation mustbe indicative that the involvement of the non-signatory was of such manner which was sufficient to lead the other parties to legitimately believe that the non-signatory was a veritable party to the contract."

ASF Builders went several steps further: Step 1: it held that these questions need not be decided by a court exclusively and could be decided by an arbitral tribunal:

"Thus, the archaic understanding that an arbitral tribunal is incapable or incompetent to identify and implead a non-signatory to the arbitration agreement on its own accord, is not the correct position of law, in view of the decisions of this Court in In Re: Interplay (supra) and Krish Spinning (supra).We find, that the limited nature and scope of inquiry which the referral courts are expected to undertake as regards the “existence” of the arbitration agreement, would as a logical sequitur obligate the arbitral tribunal also to look into this question. Such a question, by no stretch, can be regarded as falling within the exclusive domain or jurisdiction of the referral courts, so as to render any examination of it by the arbitral tribunal a usurpation of the referral courts authority and duty."

Step 2: It also held that the arbitral tribunal was better placed to decide the question:

"76. Owing to the intrinsic character of the test — being one that entails a fact-intensive inquiry involving a mixed question of fact and law — and further, given the extensive standard it demands, requiring a comprehensive and holistic appraisal of all material facts and attendant circumstances, it may be safely concluded that the arbitral tribunal is the more appropriate and competent forum to adjudicate upon the issue of whether a non-signatory is bound by the arbitration agreement, as the arbitral as it has the innate advantage of going through all the relevant evidence and pleadings in greater depth and detail than the referral court at the pre-reference stage, and as such is uniquely positioned to undertake such a nuanced determination."

Step 3: ASF Builders made a distinction between existence of an arbitration agreement and binding nature vis-a-vis a non-signatory and held that question of determining whether the non-signatory was a veritable party should be left to the tribunal. Pardon the lengthy quote:

"86. Once, the “existence” of the arbitration agreement is said to have been established, the condition stipulated in terms of Section 11 sub-section (6A)of the Act, 1996, is said to have been fulfilled, and the referral courts have no option but to refer the dispute to arbitration, notwithstanding whether the intention of a non-signatory as a veritable partly to such agreement is established or not. Apart from the pre-condition of examining the “existence” of an arbitration agreement, Section 11 of the Act, 1996 does not either contemplate or require determination of the "defined legal relationship" in terms of Section 7, nor does it mandate an assessment of the futuro intention of the parties, whether signatories or non-signatories, from the "express words" of the arbitration agreement. This limited inquiry does not extend to the substantive legal consequences or implications of such arbitration agreement. The question of whether a non-signatory is bound by the arbitration agreement is entirely separate from the question of its "existence." The latter is a relatively straightforward, procedural determination based onthe formal presence of the agreement, whereas the former involves a substantive and contextual inquiry into the mutual intent of the parties, which may be examined by the arbitral tribunal."

Step 4: ASF Builders stated that even if this was a question of existence of an arbitration agreement, it should be left to the arbitral tribunal to decide, in line with Cox & Kings (II), 2024 INSC 670, but that the arbitral tribunal should give the non-signatory a fair opportunity (Para 107). 

Step 5: ASF Builders held that the arbitral tribunal has the power to implead non-signatories so long as "such impleadment is undertaken upon a consideration of the applicable legal principles — including, but not limited to, the doctrines of ‘group of companies’, ‘alter ego’, ‘composite transaction’, and the like —the arbitral tribunal is fully empowered to summon the non-signatory to participate in the arbitration."  (Para 109). ASF Builders also relied on Adavya Projects Pvt. Ltd. v. Vishal Strcturals Pvt. Ltd., 2025 INSC 507 on this point. 

Step 6: The jurisdiction of the arbitral tribunal includes questions as to who is the party to the arbitration agreement. (Para 137).

Step 7: Even if notice of arbitration is not given to a non-signatory, such a non-signatory could be impleaded subsequently (Paras 158, 160). 

Now, let's come to the heart of the matter. Assume that if a person or an entity falls within the test for impleadment of a non-signatory as per Cox & Kings (I), there seem to be no reason to proscribe an arbitrator from lifting the corporate veil to see if that other person or entity is inside the veil. The inquiry into applying the Group of Companies doctrine and that of lifting the corporate veil, although not identical, could be similar in certain situations/ circumstances (See, for instance, Para 163, ASF Builders).

Disortho SAS v. Meril Life Sciences Private Limited, 2025 INSC 352: A Critique

This post critiques of the decision of Supreme Court in Disortho SAS v. Meril Life Sciences Private Limited, 2025 INSC 352. This critique is done in two parts. This post discusses how the judgment falls in error in failing to clarify the distinction between the law of arbitration and the law of the arbitration agreement. The next post will address the remaining portion of this judgment.

This decision takes me back to the almost 20 years back when arbitration practitioners and students in India used to track all arbitration judgments of Indian courts and post in various law blogs such as India Corp Law Blog, etc. critiquing those judgments. All those students and practitioners were young at that time have now become experts. All those critique played an important role in leading to the BALCO judgment ([2012] 12 SCR 327) in September 2012, which is a watershed moment for Indian arbitration law and was viewed as correcting the divergence from international position.  

After a long time, we see a decision of Supreme Court in Disortho, which requires such critique. The judgment in Disortho runs to 26 pages with only a five-line paragraph, that is, Para 2, devoted to summarising the arguments for both parties. What is missing in that decision is a counterpoints or arguments provided by each party.  

The judgment virtually starts with the arbitration clause in question and goes on to analyze the the legal position. Anyway, this is a petition filed under Section 11 of the Arbitration and Conciliation Act, 1996 before the Supreme Court directly. Two points are noteworthy: One Courts have traditionally regarded decisions under Section 11 as fact specific and not as precedents. Secondly, this decision notes at Para 34 that parties came to a consensus to appointment as sole arbitrator.  

“34. However, during the course of the hearing, the learned counsel for both parties, Meril and Disortho, unanimously stated that, should the present application under Section 11(6) of the Arbitration and Conciliation Act, 1996, be allowed, the parties are agreeable to the arbitration being held in India. Furthermore, the parties have consented to the appointment of a sole arbitrator to adjudicate and decide the disputes in question.”  

All the same, there is a caveat: “… should the application… be allowed…” In any case, given the status of Section 11 applications as facts specific, this decision should not be taken as a precedent, although they generally are. 

Let us look at the concerned arbitration clause in the agreement: 

“16. Miscellaneous 

16.5. This Agreement shall be governed by and construed in accordance with the laws of India and all matter pertaining to this agreement or the matters arising as a consequence of this agreement with be subject to the jurisdiction of courts in Gujarat, India.” 

18. Direct Settlement of Disputes 

The Parties mutually agree and pact that any dispute, controversy or claim arising during this Agreement related to subscription, execution, termination, breach, as well as noncontractual relationships, related to the clauses mentioned above; They may be submitted to conciliation in accordance with the Rules of Arbitration and Conciliation of the Chamber of Commerce of Bogota DC., or instead. of this city, where the Director of the Centre so determine.  

Similarly, the Parties mutually agree and pact that if the dispute or difference has not been settled in conciliation, or to the extent that has not been resolved; it will be committed to Arbitration by either party for final settlement in accordance with the Arbitration and Conciliation Center of the Chamber of Bogota DC. The Arbitral Tribunal shall consist of one (1) arbitrator in cases of minor or no value E according to the Rules of Conciliation and Arbitration Center of the Chamber of Commerce of Bogota DC. Also, in the event of greater amount, the Court of conformity shall comply with the Regulations of the Center for Conciliation and Arbitration of the Chamber of Commerce of Bogota DC… The arbitration will take place in Bogota DC… On the premises of Center for Conciliation and Arbitration of the Chamber of Commerce of Bogota DC., or at the place where the Director of the Centre as determined in this city. The award shall be in law and standard will be applicable Colombian law governing the mailer, Expenditure in the conciliation and arbitration proceedings shall be borne equally.” 

A bare perusal of this arbitration clause would lead to some of the following conclusion: 

• Place/ Seat is Bogota. Law of the arbitration would generally be the law of the seat, that is, Columbian Law.
• Law Governing the Contract would be Indian law and Indian courts would have exclusive jurisdiction over the subject-matter, subject of course to the arbitration clause.
• Traditionally, where there is an exclusive jurisdiction clause and an arbitration clause, the exclusive  jurisdiction clause has been regarded as subject to the arbitration clause.
• Drafters usually place the exclusive jurisdiction clause subsequent to the arbitration clause and use the phrase “subject to Clause ___” at the beginning of the exclusive jurisdiction clause for this purpose.
  Coming back to the agreement, Arbitration would have been as per the Regulations of the Centre for Conciliation and Arbitration of the Chamber of Commerce, Bogota.

This question is fairly straightforward but for the court, the issue was complicated for two reasons, in the court’s own words: 

“3. What initially appeared to be a straightforward question has, in fact, become a vexed one, primarily for two salient reasons. First, there exists a divergence of opinion, both internationally and domestically, on the appropriate test to determine jurisdiction in a case of trans-border arbitration. This divergence stems from the interaction between three distinct legal systems which come into play when a dispute occurs: (i) lex-contractus, the law governing the substantive contractual issues; (ii) lex arbitri, the law governing the arbitration agreement and the performance of this agreement; and (iii) lex-fori, the law governing the procedural aspects of arbitration. These legal systems may either differ or align, depending on the parties’ choices. Furthermore, there may be internal splits within these legal systems, such as for lex arbitri. Secondly, when contractual clauses conflict, as is the case here, the resolution becomes legalistic and complicated.” 

There are two problems with this observation by Court.

• One, Indian jurisprudence as settled by various Supreme Court judgments clearly provide that where the place of arbitration is foreign, then Indian courts do not have jurisdiction under Part I of the Arbitrtion and Conciliation Act. In Indian law, the term “place” has meant “seat”.
• Two, lex arbitri is not the law of the arbitration agreement. The court wrongly observed: “lex arbitri, the law governing the arbitration agreement and the performance of this agreement”. 

Lex arbitri is not the law of the arbitration agreement. It is the law of arbitration. Redfern & Hunter, the popular commentary on international commercial arbitration, quote Paul Smith Ltd. v. H & S International Holding Co. Inc., [1991] 2 Lloyd‘s L.Rep. 127, the English Commercial Court, made certain observations. This has been dealt with by Redfern & Hunter in their commentary under the heading “What is the lex arbitri?”. Note that this portion of Paul Smith was quoted by Disortho: 

“What then is the law governing the arbitration? It is, as Martin Hunter and Alan Redfern, International Commercial Arbitration, p. 53, trenchantly explain, a body of rules which sets a standard external to the arbitration agreement, and the wishes of the parties, for the conduct of the arbitration. The law governing the arbitration comprises the rules governing interim measures (e.g. Court orders for the preservation or storage of goods), the rules empowering the exercise by the Court of supportive measures to assist an arbitration which has run into difficulties (e.g. filling a vacancy in the composition of the arbitral tribunal if there is no other mechanism) and the rules providing for the exercise by the Court of its supervisory jurisdiction over arbitrations (e.g. removing an arbitrator for misconduct).” 

In various portions of Disortho the SC is confused between lex arbitri and the law governing the arbitration agreement. Some of the places where this confusion is apparent are given here: 

“This divergence stems from the interaction between three distinct legal systems which come into play when a dispute occurs: (i) lex-contractus, the law governing the substantive contractual issues; (ii) lex arbitri, the law governing the arbitration agreement and the performance of this agreement…” (emphasis added) (p.3) 

“Lex arbitri might be split into two components if the parties so desire – (i) law governing the agreement to arbitrate or the proper law of arbitration and (ii) the law governing the arbitration…” (emphasis added) (p.3, foot note) 

“8. While parties may elect to differentiate between the lex arbitri — the law governing the agreement to arbitrate and the law governing the arbitration itself — such a distinction warrants caution…” (emphasis supplied). 

Despite the caution by Steyn, J. the SC got confused lex arbitri between the proper law of the arbitration agreement. 

However, there are parts of the judgment which make important points on the convergence between the law of arbitration and the law of the arbitration agreement. For instance, the SC held: 

“They are inherently intertwined as a part and parcel of the lex arbitri. This is particularly apparent in matters such as the filling of vacancies within the arbitral tribunal or the removal of an arbitrator for misconduct. In these situations, the law governing the arbitration agreement and the law governing the arbitration overlap, as both are essential to the functioning and integrity of the arbitral process. Consequently, unless the parties have provided otherwise, it is prudent not to divide lex arbitri.” 

Often, by finding the law of the arbitration agreement, courts usurp jurisdiction when they might not even have one. The Sulamerica decision is an example of this. Pl. see a comment on the Sulamerica judgment written about 13 years back which is relevant to this. Disortho is no less. 

While the SC may be correct in identifying the common aspects of lex arbitri and the law governing the arbitration agreement, lex arbitri is the law governing the arbitration and Lex loci arbitri refers to the law of the place of arbitration.   

More on the judgment in the next post.