India: India—Supreme Court Holds Non-Signatory Cannot Be Impleaded Without Establishing An Intention To Be Bound By Arbitration (Reckitt India v Reynders India)

Last Updated: 23 September 2019
Article by Siddharth Ratho and Sahil Kanuga

Arbitration analysis: On an application to implead a foreign affiliate of one of the parties to an arbitra-tion agreement, the Supreme Court of India held that the burden was upon the party seeking to im-plead a non-signatory to show its intention to consent to the arbitration agreement. A non-signatory without any causal connection with the process of negotiations preceding the arbitration agreement could not be made party to the arbitration. Circumstances and correspondence post execution of an arbitration agreement could not bind a non-signatory. Sahil Kanuga, leader, international litigation and dispute resolution practice, and Siddharth Ratho, associate in the practice, at Nishith Desai As-sociates, Mumbai, discuss the decision.

Reckitt Benckiser (India) Private Limited v Reynders Label Printing India Private Limited & Anr

Case: Reckitt Benckiser (India) Private Limited v Reynders Label Printing India Private Limited & Anr, 1 July 2019, Petition for Arbitration (Civil) No 65 of 2016

What was the background to the decision?

An application under Section 11 of the Arbitration and Conciliation Act, 1996 ('Act') was filed by Reckitt India for appointment of an arbitrator pursuant to an agreement between Reckitt India and Reynders India ('Agreement'). Reckitt India also impleaded a Belgian based affiliate of Reynders India (Reynders Belgium) despite it being a non-signatory to the Agreement. Both Reynders India and Reynders Belgium were constit-uents of the same group of companies known as Reynders Label Printing Group (Reynders Group). The ap-plication was accordingly filed before the Supreme Court on the premise that Reynders Belgium was an enti-ty incorporated in a country other than India and consequently, this was an international commercial arbitra-tion.

In deciding the application, the Court had to, inter alia, consider whether it was manifest from the corre-spondence exchanged between the parties, culminating in the Agreement, that the relationship envisaged in the Agreement was between Reckitt India and the Reynders Group and whether it was a clear intention of the parties to bind both the signatory as well as non-signatory party ie Reynders Belgium.

Reckitt India referred to a clause in the Agreement whereby Reynders Belgium agreed to indemnify Reckitt India in case of any loss or damage caused on account of acts and omissions by Reynders India, therefore arguing that Reynders Belgium formed an integral party to the Agreement which contained an arbitration clause. Reckitt India further argued that Reynders Belgium was a part of the exhaustive negotiations in rela-tion to execution of the Agreement. To further this point, it pointed to correspondence from a Mr Frederik Reynders, purportedly a promoter of Reynders Belgium, and who was allegedly acting for and on behalf of Reynders Belgium while the Agreement was being finalised; therefore, indicating Reynders Belgium's con-sent to arbitration. Reckitt India argued that Reynders Belgium was the disclosed principal on whose behalf Reynders India had executed the Agreement.

Reynders Belgium submitted that it had no presence or operation in India and was not involved in the nego-tiation, execution and/or performance of the Agreement; neither was there any privity of contract between itself and Reckitt India. It further argued that Reynders India and Reynders Belgium were only part of the Reynders Group, which was an internationally operating group of seven printing companies, each with their own separate legal entities operating from different offices. Both Reynders India and Reynders Belgium had a common holding company being Reynesco NV. Reckitt Belgium also clarified that Mr Frederik Reynders wasn't the promoter of Reynders Belgium and was only an employee of Reynders India.

What did the Court decide?

Having considered the submissions of both sides, the Court held that the burden was on Reckitt India to es-tablish that Reynders Belgium had an intention to consent to the arbitration agreement and be a party there-to, even if it was for the limited purpose of its obligations to indemnify Reckitt India for damages and loss caused due to acts and omissions of Reynders India. This burden, the Court found, had not been successful-ly discharged by Reckitt India.

The Court found that Reynders Belgium was neither the signatory to the arbitration agreement nor did it have any causal connection with the process of negotiations preceding the Agreement or the execution thereof. From the facts placed before it, it found that Mr Frederik Reynders was only an employee of Reynders India, who acted in that capacity during the negotiations preceding the Agreement, and was in no way associated with Reynders Belgium.

Having considered the facts on record, it therefore held that Reynders Belgium was neither a party to the Agreement nor had it given its assent to the arbitration agreement and that the fact of Reynders Belgium and Reynders India belonging to the same group of companies made no difference.

Having held that Reynders Belgium could not be made party to the arbitration, technically, the Court could therefore no longer grant reliefs under the application filed on the premise of an international commercial ar-bitration. However, in the interest of justice and possibly by virtue of the consent of Reynders India, it went ahead and appointed an arbitrator to conduct domestic commercial arbitration between Reckitt India and Reynders India.

What are the practical implications of the decision?

While it was important that the Supreme Court added further clarity to the principles about non-signatories that were expounded in Chloro Controls India Private Limited vs Severn Trent Water Purification Inc. and Ors (2013) 1 SCC 641 (not available on LexisNexis UK), going ahead and appointing the arbitrator to pursue domestic arbitration saves parties the cost and time in having to file a fresh Section 11 petition, in a court of appropriate jurisdiction. This is very much in keeping with the recent trend of Courts not allowing technicali-ties to get in the way of the larger picture of expediting arbitration.

However, with this judgment in place, parties should take care while seeking to implead such non-signatory affiliates and must only do so if facts show a clear intention on their part to consent to arbitration.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions