Reportable  IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.3874. OF 2010 [Arising out of SLP [C] No.27330 of 2008]

Indowind Energy Ltd. … Appellant

Vs.

Wescare (I) Ltd.  & Anr. … Respondents

J U D G M E N T

R.V.RAVEENDRAN, J.

Leave granted.

2. The appellant  and respondents 1 and 2 are companies incorporated  

under the Companies Act, 1956. Wescare Care (I) Ltd., the first respondent  

(for  short  ‘Wescare’),  is  in  the  business  of  setting  up  and  

operating/managing windfarms and generation of power from Wind Electric  

Generators. Subuthi Finance Ltd - second respondent (‘Subuthi’ for short) is  

a promoter of the appellant company – Indowind Energy Ltd., (referred to as  

‘Indowind’). On 24.2.2006 an agreement of sale was entered into between  

Wescare  and  Subuthi.  The  agreement  described  “Wescare  (India)  Ltd.  

including  its  subsidiary  RCI  Power  Ltd”  as  the  “seller/Wescare”.  It  

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described  Subuthi  Finance  Ltd.  and  its  nominee  as  “buyer”  and  as  the  

“promoters of Indowind Energy Ltd.” Under the said agreement, the seller  

agreed to transfer  to  the buyer  certain  business  assets  of  the  seller  for a  

consideration of Rs.98.19 crores, of which Rs.24.19 crores was payable in  

cash and Rs.74 crores  by issue of  74 lakhs shares  (of  the  face  value of  

Rs.10/-  at  a  premium of  Rs.90/-  per  share).  Clause  10  of  the  agreement  

relates to arbitration. Clause 11 of the agreement relates to approval. The  

said clauses are extracted below :

“10. Governing Law and Jurisdiction.

This AGREEMENT shall be governed by and interpreted in accordance  with the laws of India. The Parties submit to the exclusive jurisdiction of  the court  in  the city of Chennai,  Tamil  Nadu. Any dispute,  difference,  claims or questions arising under this agreement or concerning any matter  covered by this Agreement or touching upon this Agreement,  the same  shall be referred to arbitration before a sole arbitrator to be appointed by  consent of Seller,  Buyer/IW. The decision/award of the Sole Arbitrator  shall be final and binding on all parties. The provisions of the Arbitration  and  Conciliation  Act,  1996,  with  such  amendments  thereto  as  may  be  applicable,  shall  apply to the proceedings.  The venue of the arbitration  shall be Chennai and the language of the Arbitration shall be English.”

“11. Approval.    Notwithstanding  anything  to  the  contrary  herein  contained  in  this  AGREEMENT this agreement is expressly subject to the approval of the  respective Boards of Directors/Shareholders by the Seller, the Buyer and  Indowind Energy Limited and if such approval is not obtained either by  the  Seller,  the  Buyer  or  IW  on  or  before  30th June  2006  this  AGREEMENT shall be null and void and of no effect whatsoever and all  transactions done under the agreement shall be reversed with all the costs  and damages to the defaulting party.”

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3. The Board of Directors of Wescare at its meeting held on 28.2.2006  

accorded approval to the agreement dated 24.2.2006. The Board of Directors  

of  Subuthi  at  its  meeting held on 1.3.2006 approved the said agreement.  

There was however no such approval by the Board of Directors of Indowind.

4. According to Indowind, Wescare sold 31 Wind Electric Generators  

(WEGs) to Indowind  on 15.3.2006 for a consideration of Rs.13,48,00,700/-,  

out of which Rs.4.5 crores was paid in cash and Rs.8.84 crores by allotment  

of 884,000 shares of Indowind to Wescare. Further, towards the purchase of  

another 8 WEGs from Wescare, Indowind allotted 58,000 shares.

5. According to Wescare, certain disputes arose between Wescare on the  

one hand and Subuthi  and Indowind on the other,  in  respect  of  the  said  

agreement. Wescare filed three petitions under section 9 of the Arbitration  

and  Conciliation  Act,  1996  (‘the  Act’,  for  short)  against  Subuthi  and  

Indowind seeking the following interim measures :  

(i) OA No.641/2007 to restrain Subuthi and Indowind from alienating,  

encumbering  or  otherwise  disposing  of  the  31  WEGs  and  the  land  

appurtenant thereto.

(ii) OA NO.642/2007 to restrain Subuthi and Indowind from operating or  

running the WEGs pending completion of arbitration proceedings.

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(iii) OA NO.975/2007 to restrain Indowind from proceeding with the issue  

of initial public offer, proposed under the Red Herring Prospectus issued by  

it, pending final disposal of the arbitration proceedings.  

6. The said applications were dismissed by a learned Single Judge of the  

Madras High Curt on 21.8.2007, holding as follows :

(a) As  Indowind  has  not  signed  nor  ratified  the  agreement  dated  

24.2.2006, the maintainability of the applications under section 9 of  

the Act was doubtful.

(b) As the WEGs were purchased by Indowind after paying the entire sale  

consideration, Wescare  was not entitled to an injunction restraining  

Indowind from alienating the WEGs.

The order however clarified that whatever had been stated therein was in the  

context  of  disposal  of  the  applications  seeking  interim  measures  under  

section 9 of the Act and nothing contained therein should be construed as  

findings  on  merits  and the  Arbitrator  should  determine  the  issues  raised  

before him uninfluenced by the observations made in the said order.

7. Wescare filed a petition under section 11(6) of the Act against Subuthi  

and  Indowind  for  appointment  of  a  sole  arbitrator  to  arbitrate  upon  the  

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disputes  between them in  respect  of  agreement  dated  24.2.2006.  Subuthi  

resisted the said petition alleging that as the agreement dated 24.2.2006 did  

not contemplate any transaction between Wescare and itself (Subuthi) and as  

no transaction took place between Wescare and Subuthi under the agreement  

dated 24.2.2006, there  was  no cause  of  action nor  any arbitrable  dispute  

between them.  Indowind resisted the petition on the ground that it was not a  

party to the agreement dated 24.2.2006 entered into between Wescare and  

Subuthi; that it had not ratified the agreement dated 24.2.2006 or acted upon  

it; that there was no arbitration agreement between Wescare and Indowind;  

that the transactions of purchase of 31 WEGs were neither covered by nor in  

pursuance of the agreement dated 24.2.2006 and therefore the petition was  

liable to be dismissed.

8. The learned Chief Justice of the Madras High Court allowed the said  

application  under  section  11  of  the  Act,  by  the  impugned  order  dated  

1.8.2008 and appointed a sole arbitrator. The learned Chief Justice held that  

Indowind  was  prima facie a  party  to  the  arbitration  agreement  and  was  

bound by it,  even though it  was  not  a  signatory  to  the  agreement  dated  

24.2.2006. His conclusion was based on the following findings :

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(a) Execution  of  the  agreement  dated 24.2.2006 between Wescare  and  

Subuthi containing the arbitration agreement, was not in dispute.  

(b) Subuthi  is  one of  the  promoters  of  Indowind.  Both of  them had a  

common registered office and common Directors. The correspondence  

emanating from Indowind was signed by Raja Sukumar who was the  

signatory on behalf of Subuthi in the agreement dated 24.2.2006. By  

lifting the corporate veil, it could be seen that Subuthi and Indowind  

was one and the same party.

(c) The agreement dated 24.2.2006 described Subuthi as the promoter of  

Indowind and also described Indowind as the  nominee  of  Subuthi.  

Subuthi had entered into an agreement for purchase of the business  

assets  of  Wescare  for  its  nominee  Indowind.  The  signatory  to  the  

agreement on behalf of Subuthi was also a Director of Indowind.

(d) The  agreement  dated  24.2.2006 contemplated  Indowind purchasing  

the  assets  of  Wescare  including  the  WEGs.  and  making  payment  

therefor, both in cash and by allotment of shares. Indowind had in fact  

purchased from Wescare 39 WEGs. in March, 2006, the consideration  

for which was paid partly in cash and partly by allotment of shares,  

thereby  indicating  that  Indowind  acted  in  terms  of  the  agreement  

dated 24.2.2006.  

(e) The Red Herring Prospectus issued by Indowind in connection with  

the public issue of equity shares gives  a clear indication that it  is  

bound  by  the  agreement  dated  24.2.2006  between  Wescare  and  

Subuthi (vide Risk Factor Nos.30 and 31).   

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(f) Signature  of  a  party  is  not  a  formal  requirement  of  an  arbitration  

agreement either under sub-section (4)(b) and (c) or under sub-section  

(5) of section 7 of the Act. Therefore, Indowind could be held to be a  

party to the agreement dated 24.2.2006, even if it had not executed the  

said agreement.  

9 The said judgment is challenged in this appeal by special leave. On  

the contentions urged the following two questions arise for consideration:

(i) Whether  an  arbitration  clause  found  in  a  document  (agreement)  between  two  parties,  could  be  considered  as  a  binding  arbitration  agreement on a person who is not a signatory to the agreement?

(ii) Whether  a  company  could  be  said  to  be  a  party  to  a  contract  containing an arbitration agreement, even though it did not sign the  agreement  containing  an  arbitration  clause,  with  reference  to  its  subsequent conduct?                     

10. Section 7 defines an arbitration agreement and it is extracted below :

“7.  Arbitration  agreement.—(1)  In  this  Part,  “arbitration  agreement”  means an agreement by the parties to submit to arbitration all or certain  disputes which have arisen or which may arise between them in respect of  a defined legal relationship, whether contractual or not.

(2) An  arbitration  agreement  may  be  in  the  form of  an  arbitration  clause in a contract or in the form of a separate agreement.

(3) An arbitration agreement shall be in writing.

(4) An arbitration agreement is in writing if it is contained in—

(a) a document signed by the parties’

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(b) an exchange of letters, telex, telegrams or other means of  telecommunication which provide a record of the agreement; or

(c) an exchange of statements of claim and defence in which  the  existence  of  the  agreement  is  alleged  by one  party  and not  denied by the other,

(5) The reference in a contract to a document containing an arbitration  clause constitutes an arbitration agreement if the contract is in writing and  the  reference  is  such  as  to  make  that  arbitration  clause  part  of  the  contract.”  

The term ‘party’  is  defined in  section  2(h)  as  referring  to  a  party  to  an  

arbitration  agreement.  The  term  arbitration  agreement  is  defined  under  

section  2(b)  as  an  agreement  referred  to  in  section  7.  An  analysis  of  

sub-sections (2), (3) and (4) of section 7 shows that an arbitration agreement  

will  be considered to be in writing if  it  is contained in :  (a) a document  

signed by the parties; or (b) an exchange of letters, telex, telegrams or other  

means of telecommunication which provide a record of the agreement; or (c)  

an exchange of statements of claim and defence in which the existence of the  

agreement is  alleged by one party  and not  denied by the  other,  or  (d)  a  

contract  between  the  parties  making  a  reference  to  another  document  

containing an arbitration clause indicating a mutual intention to incorporate  

the arbitration clause from such other document into the contract.

11. It  is  fundamental  that  a  provision  for  arbitration  to  constitute  an  

arbitration  agreement  for  the  purpose  of  section  7  should  satisfy  two  

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conditions : (i) it  should be between the parties to the dispute; and (ii) it  

should  relate  to  or  be  applicable  to  the  dispute.  [See:  Yogi  Agrawal  v.   

Inspiration Clothes & U & Ors.  - 2009 (1) SCC 372].  

12. Wescare has not entered into any agreement with Indowind, referring  

to the agreement dated 24.2.2006 containing the arbitration agreement, with  

the  intention  of  making  such  arbitration  agreement,  a  part  of  the  their  

agreement. Nor is it the case of Wescare that there has been any exchange of  

statements of claim and defence in which it had alleged the existence of an  

arbitration agreement and the same had been accepted and not denied by  

Indowind in the defence statement. It is also not the case of Wescare that  

any  exchange  of  letters,  telex,  telegrams  or  other  means  of  

telecommunication  referred  to  and  provided  a  record  of  any  arbitration  

agreement between the parties. It therefore follows that neither sub-section  

(5) nor clauses (b) and (c) of sub-section (4) of section 7 applies. Therefore,  

what  remains  to  be  seen  is  whether  there  is  any  ‘document  signed  by  

parties’, as provided in clause (a) of sub-section (4) of section 7.  

13. Wescare puts forth the agreement dated 24.2.2006 as an agreement  

signed  by  the  parties  containing  an  arbitration  agreement  but  the  said  

agreement is signed by Wescare and Subuthi and not by Indowind. It is not  

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in dispute that there can be appointment of an arbitrator if there was any  

dispute between Wescare and Subuthi. The question is when Indowind is not  

a signatory to the agreement dated 24.2.2006, whether it can be considered  

to be a ‘party’ to the arbitration agreement. In the absence of any document  

signed by the parties as contemplated under clause (a) of sub-section (4) of  

section 7, and in the absence of existence of an arbitration agreement as  

contemplated in clauses (b) or (c) of sub-section (4) of section 7 and  in the  

absence  of  a  contract  which  incorporates  the  arbitration  agreement  by  

reference as contemplated under sub-section (5) of section 7, the inescapable  

conclusion is that Indowind is not a party to the arbitration agreement. In  

the absence of an arbitration agreement between Wescare and Indowind, no  

claim against  Indowind or  no dispute  with Indowind can be the subject-

matter of reference to an arbitrator. This is evident from a plain, simple and  

normal reading of section 7 of the Act.

14. Learned  counsel  for  Wescare  referred  to  various  clauses  in  the  

agreement dated 24.2.2006 to contend that it  should be deemed to be an  

agreement executed/signed by Indowind. Firstly it  was submitted that the  

agreement was entered into by Subuthi as promoter of Indowind and also  

described Indowind as its nominee and the agreement was signed on behalf  

of Subuthi by a person who was also a Director of Indowind. It is submitted  

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that  the  agreement  also  specifically  stated  that  Subuthi  was  desirous  of  

purchasing certain assets of Wescare for its nominee Indowind, and in fact,  

Indowind  purchased  the  said  assets  of  Wescare.  This  according  to  the  

learned counsel for Wescare, led to an irresistible conclusion that Indowind  

was acting in terms of the agreement dated 24.2.2006 and therefore, it would  

be bound by the arbitration clause therein.  

15. It is not in dispute that Subuthi and Indowind are two independent  

companies incorporated under the Companies Act, 1956. Each company is a  

separate and distinct legal entity and the mere fact that two companies have  

common shareholders or common Board of Directors, will not make the two  

companies a single entity. Nor will  existence of common shareholders or  

Directors lead to an inference that one company will be bound by the acts of  

the  other.  If  the  Director  who  signed  on  behalf  of  Subuthi  was  also  a  

Director of Indowind and if the intention of the parties was that Indowind  

should be bound by the agreement, nothing prevented Wescare insisting that  

Indowind  should  be  made  a  party  to  the  agreement  and  requesting  the  

Director who signed for Subuthi also to sign on behalf of Indowind. The  

very fact that parties carefully avoided making Indowind a party and the fact  

that the Director of Subuthi though a Director of Indowind, was careful not  

to sign the agreement as on behalf of Indowind, shows that the parties did  

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not intend that Indowind should be a party to the agreement. Therefore the  

mere fact that Subuthi described Indowind as its nominee or as a company  

promoted by it or that the agreement was purportedly entered by Subuthi on  

behalf  of  Indowind,  will  not  make Indowind a party  in the absence of a  

ratification,  approval,  adoption  or  confirmation  of  the  agreement  dated  

24.2.2006 by Indowind.  

16. Clause 11 of the agreement dated 24.2.2006 categorically states that  

the agreement shall be null and void and of no effect whatsoever unless it is  

expressly  approved  by  the  respective  Board  of  Directors/shareholders  of  

Wescare, Subuthi and Indowind. It is admitted that the Board of Directors of  

Wescare and Subuthi approved the agreement. But the Board of Directors or  

the shareholders of Indowind did not approve the agreement. In the absence  

of such approval by Indowind, and in the absence of Indowind being a party  

or signatory to the agreement dated 24.2.2006, it is ununderstandable as to  

how Indowind can be deemed to be a party to the agreement dated 24.2.2006  

and consequently a party to the arbitration agreement contained therein.

17. Wescare referred to several acts and transactions as also the conduct  

of Indowind to contend that an inference should be drawn that Indowind was  

a party to the agreement or that it had affirmed and approved the agreement  

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or  acted  in  terms  of  the  agreement.  An  examination  of  the  transactions  

between the parties to decide whether there is a valid contract or whether a  

particular party owed any obligation towards another party or whether any  

person had committed  a breach of  contract,  will  be possible  in  a  suit  or  

arbitration proceeding claiming damages or performance. But the issue in a  

proceeding under section 11 is not whether there was any contract between  

the parties or any breach thereof. A contract can be entered into even orally.  

A  contract  can  be  spelt  out  from  correspondence  or  conduct.  But  an  

arbitration agreement is different from a contract. An arbitration agreement  

can come into existence only in the manner contemplated under section 7. If  

section 7 says that an arbitration agreement should be in writing, it will not  

be sufficient for the petitioner in an application under section 11 to show that  

there  existed  an  oral  contract  between  the  parties,  or  that  Indowind  had  

transacted  with  Wescare,  or  Wescare  had  performed  certain  acts  with  

reference to Indowind, as proof of arbitration agreement.  

18. A  Constitution  Bench  of  this  Court  in  Economic  Transport   

Organisation v. M/s. Charan Spinning Mills (P) Ltd. – 2010 (2) SCALE 427  

pointed out that court examines a document from different perspectives in  

different types of cases. This Court observed:             

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“20. In  this  context,  it  is  necessary  to  remember  that  the  nature  of  examination of a document may differ with reference to the context  in  which  it  is  examined.  If  a  document  is  examined  to  find  out  whether  adequate stamp duty has been paid under the Stamp Act, it will not be  necessary  to  examine  whether  it  is  validly  executed  or  whether  it  is  fraudulent or forged.  On the other hand, if a document is being examined  in a criminal case in the context of whether an offence of forgery has been  committed, the question for examination will be whether it is forged or  fraudulent, and the issue of stamp duty or registration will be irrelevant.  But if the document is sought to be produced and relied upon in a civil  suit,  in  addition  to  the  question  whether  it  is  genuine,  or  forged,  the  question whether it  is  compulsorily registrable or not,  and the question  whether  it  bears  the  proper  stamp  duty,  will  become  relevant.  If  the  document is examined in the context of a dispute between the parties to  the document, the nature of examination will be to find out that rights and  obligation  of  one  party  vis-à-vis  the  other  party.  If  in  a  summary  proceedings by a consumer against a service provider, the insurer is added  as a co-complainant or if the insurer represents the consumer as a power of  attorney, there is no need to examine the nature of rights inter-se between  the consumer and his insurer.”  

19. The scope of examination of the agreement dated 24.2.2006, by the  

learned Chief Justice or his Designate under section 11(6) is necessarily to  

be  restricted  to  the  question  whether  there  is  an  arbitration  agreement  

between  the  parties.  The  examination  cannot  extend  to  examining  the  

agreement to ascertain the rights and obligations regarding performance of  

such  contract  between  the  parties.  This  Court  in  SBP  &  Co.  v.  Patel   

Engineering Limited [2005 (8) SCC 618] and in National Insurance Co. Ltd.   

v.  Boghara Polyfab Pvt.  Ltd.  [2009 (1) SCC 267] has held that when an  

application is filed under section 11, the Chief Justice or his Designate is  

required to decide only two issues,  that  is  whether  the party  making the  

application has approached the appropriate  court  and whether  there  is  an  

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arbitration agreement and whether the party who has applied under section  

11 of the Act,  is  a party to such agreement.  Therefore,  the Chief Justice  

exercising  jurisdiction  under  section  11  of  the  Act  has  to  only  consider  

whether  there  is  an  arbitration  agreement  between the  petitioner  and the  

respondent/s  in  the  application  under  section  11  of  the  Act.  Any  wider  

examination in such a summary proceeding will not be warranted.

20. In so far as the issue of existence of arbitration agreement between the  

parties, the learned Chief Justice or his Designate is required to decide the  

issue finally and it is not permissible in a proceeding under section 11 to  

merely hold that a party is  prima facie a party to the arbitration agreement  

and that a party is prima facie bound by it. It is not as if the Chief Justice or  

his Designate will  subsequently be passing any other final decision as to  

who are the parties to the arbitration agreement. Once a decision is rendered  

by the Chief Justice or his Designate under section 11 of the Act, holding  

that  there  is  an  arbitration  agreement  between the  parties,  it  will  not  be  

permissible  for  the  arbitrator  to  consider  or  examine  the  same issue  and  

record  a  finding  contrary  to  the  finding  recorded  by  the  court.  This  is  

categorically  laid down by the Constitution Bench in  SBP.  Therefore the  

prima facie finding by the learned Chief Justice that Indowind is a party to  

the arbitration agreement is not what is contemplated by the Act.

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21 It is no doubt true that if Indowind had acknowledged or confirmed in  

any correspondence or other agreement or document, that it is a party to the  

arbitration agreement dated 24.2.2006 or that it is bound by the arbitration  

agreement  contained  therein,  it  could  have  been  possible  to  say  that  

Indowind is a party to the arbitration agreement. But that would not be under  

section 7(4)(a) but under section 7(4)(b) or section 7(5). Be that as it may.  

That is not the case of Wescare. In fact, the delivery notes/invoices issued by  

Wescare do not refer to the agreement dated 24.2.2006. Nor does any letter  

or  correspondence  sent  by  Indowind  refers  to  the  agreement  dated  

24.2.2006, either as an agreement executed by it or as an agreement binding  

on it. We may now refer to the several documents referred to and relied on  

by Wescare.  

22. The first is in regard to the sale of WEGs by Wescare to Indowind.  

The letter dated 15.3.2006 enclosing the invoice, the delivery notes dated  

15.3.2006 given by Wescare to Indowind, the confirmation dated 15.3.2006  

by Wescare to Indowind relating to the sale of WEGs, relied on by Wescare,  

very significantly do not refer to the agreement dated 24.2.2006. They are  

straight and simple delivery notes and an invoice in regard to the sale of  

goods.  They can be independent  transactions which do not  depend on or  

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relate to the agreement dated 24.2.2006. If they were with reference to the  

agreement dated 24.2.2006, it is strange that Wescare did not choose to refer  

to the said agreement in any of these documents.  

23. Strong reliance is placed on the Red Herring Prospectus issued by the  

Indowind in connection with the public issue of its shares. We extract below  

the relied upon portions of the prospectus :  

“30. We have agreed to takeover the assets of Wescare (India) Limited,   subject to approval of owners of assets and statutory formalities, but only   a portion of acquisition has been completed.

Our  Company  agreed  to  takeover  wind  mills  along  with  land,  infrastructure  and spares  from Wescare  India  Limited.  But  due  to non  receipt of approvals from the lenders/lessors, only a part of the total being  6.49  MW  has  been  acquired  by  us.  The  Company  is  not  certain  of  completing the remaining acquisition. We had paid the total amount for 39  windmills, however only 28 windmills were delivered to us representing  nearly 72% of the total money paid by us.

31. One of our Promoters, Subuthi Finance Limited, has entered into an   agreement dated February 24, 2006 with Wescare (India) Limited for the   acquiring wind mills  and other  assets  in  the  name of  its  nominee  viz.   Indowind Energy Limited for a consideration aggregating approximately   Rs.9819 lacs.

The consideration for the above was to be partly settled in partly in cash  (Rs.2419 lacs) and partly by way of shares (74 lacs) of Indowind Energy  Limited.

Wescare (India) Limited has filed the following applications before the  Hon’ble  High Court  of Madras under Section 9 of the Arbitration and  Conciliation Act, 1996 :

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SNo. Application No. Applicant Respondents 1 O.A.No.641 of 2007 Wescare  India  

Limited  (i)  Subuthi  Finance  Limited (ii)  Indowind  Energy  Limited

2 O.A.No.642 of 2007 -same as above- -same as above- 3 Appl. No.3808 of 2007 -same as above- -same as above- 4 Appl. No.3808 of 2007 -same as above- -same as above-

All  above  applications  are  pending  before  the  Hon’ble  High  Court  of  Madras.  For  further  details  of  the  same,  please  refer  section  titled  “Outstanding Litigations and Material Developments” on page 190 of this  Red Herring Prospectus.”

Para 30 of the Prospectus merely refers to Indowind agreeing to take over  

the wind mills along with land, infrastructure and spares from Wescare. It  

does not refer to the agreement dated 24.2.2006 nor does it state that the  

takeover of the wind mills etc., was in pursuance of the agreement dated  

24.2.2006.  Para  31 of  the  Prospectus  specifically  states  that  Subuthi  had  

entered into an agreement dated 24.2.2006 with Wescare to acquire WEGs  

and other assets in the name of its nominee Indowind. This has never been  

disputed  by  anyone.  But  what  is  significant  is  that  there  is  no  

acknowledgement or statement that the said agreement was authorized to be  

entered on its behalf by Indowind or Indowind had ratified or approved the  

said agreement.  Para 31 also refers to the applications under section 9 filed  

by Wescare and the interlocutory applications filed in such applications. But  

then that also does not help as in fact in the said application under section 9  

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the  High  Court  has  held  that  Indowind  is  not  a  party  to  the  agreement  

dated 24.2.2006 and therefore not a party to an arbitration agreement.

24. Wescare relied upon two decisions of the US Court  of  Appeals  to  

contend that  a  person to  be bound by an arbitration  agreement need not  

personally sign the written arbitration agreement. [FISSER v. International   

Bank - 282 F.2d 231 (1960) and  J.J.Ryan & Sons, Inc. v. Rhone Poulene   

Textile, S.A. - 863 F.2d 315]. These decisions are of no assistance as they do  

not relate to a provision similar to section 7 of the Indian Act.

25. In view of the above, we allow this appeal, set aside the order of the  

High Court  appointing  an  Arbitrator  in  regard  to  the  claims of  Wescare  

against Indowind and dismiss the application under section 11(6) of the Act  

filed by Wescare in so far as Indowind is concerned. The appointment of  

Arbitrator in so far as Subuthi is concerned, is not disturbed. It is however  

open to Subuthi to raise all contentions including the contention relating to  

absence of arbitral dispute, before the Arbitrator.   

………………………….J. (R V Raveendran)

New Delhi; ………………………….J. April  27, 2010. (K S Radhakrishnan)                

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