What is the core question in Indowind v. Wescare?

Whether a person who did not sign the contract can still be bound by its arbitration clause.

What did the Supreme Court hold?

A non-signatory was not bound here. Without clear consent or legal basis, arbitration cannot be forced on a non-signatory.

Which provisions were important?

Sections 7 and 11 of the Arbitration and Conciliation Act, 1996—definition of arbitration agreement and appointment power.

Can an arbitrator revisit the High Court’s Section 11 finding?

No. Once the High Court decides under Section 11 who are parties to the arbitration agreement, the arbitrator cannot contradict it.

What is the exam takeaway?

Consent rules arbitration. Non-signatory is bound only if a recognized doctrine or express assent clearly applies.

Indowind Energy Ltd. v. Wescare (India) Ltd.

Easy English explainer of the Supreme Court ruling on whether a non-signatory can be bound by an arbitration clause.

AIR 2010 SC 1793 Supreme Court of India India Arbitration Law 6 min read

Author: Gulzar Hashmi | Published: 2 November 2025 | Primary: arbitration agreement, non-signatory | Secondary: Section 7, Section 11

Quick Summary

The Supreme Court held that a non-signatory cannot be pushed into arbitration just because others signed an agreement. Without clear consent or a recognized legal link, the person is not bound. The case limits who can be forced to arbitrate.

Consent first Section 7 Section 11

Issues

Can an arbitration clause bind a person who did not sign the contract?

Rules

Section 7 (1996 Act): Requires a written arbitration agreement showing consent. Mere references are not enough to rope in a non-signatory.
Parties to the agreement: Without a clear acknowledgment or authorized approval by the alleged party (company/board), the clause does not bind them.
Section 11 (appointment): The High Court decides who are parties to the arbitration agreement; that finding controls the arbitral tribunal.

Facts (Timeline)

Wind power business: Wescare operated wind farms and generated power.

2006 agreement: Subuthi Finance (promoter of Indowind) agreed with Wescare to transfer assets worth ₹981.9 million to Subuthi and its nominee, Indowind.

Arbitration clause: Present in the Subuthi–Wescare agreement.

Approvals: Boards of Wescare and Subuthi approved. No approval from Indowind’s board.

Dispute & court: Wescare sought relief. High Court appointed a sole arbitrator to decide disputes among Wescare, Subuthi, and Indowind.

Stand of parties: Subuthi questioned transactions; Indowind said it was not a party to the agreement and not bound.

Timeline card showing steps in Indowind v Wescare dispute

Arguments

Wescare (Applicant)

Agreement had an arbitration clause for disputes.
Indowind, as nominee/beneficiary, should be treated as bound.
Sought appointment of arbitrator for all parties.

Subuthi & Indowind (Respondents)

Subuthi questioned existence/extent of transactions.
Indowind argued it never approved or signed; not a party.
Non-signatory cannot be forced into arbitration without consent.

Judgment

The Supreme Court held that Indowind, a non-signatory without board approval, was not bound by the arbitration clause in the Subuthi–Wescare agreement. The Court emphasized consent and proper authorization.

Ratio Decidendi

Arbitration rests on agreement. A non-signatory is not bound unless a recognized doctrine or explicit assent clearly links them.
Under Section 11, the High Court must decide who are parties to the arbitration agreement; that decision binds the tribunal.

Why It Matters

The case protects corporate entities from being dragged into arbitration without authorization. It guides promoters and nominees: being connected is not the same as consenting. Always secure clear approvals.

Key Takeaways

Consent controls: No consent, no compulsion to arbitrate.
Board approval matters: Company authorization is key for being bound.
Section 11 clarity: High Court’s view on parties binds the arbitrator.

Mnemonic + 3-Step Hook

Mnemonic: C-A-N — Consent-Authorization-Non-signatory not bound.

Consent? Is there written assent by the party?
Authorization? Any board resolution or signature?
Non-signatory? If no clear link, not bound.

IRAC Outline

Issue

Can Indowind, a non-signatory without board approval, be forced to arbitrate under a clause in the Subuthi–Wescare agreement?

Rule

Section 7 needs a written agreement showing consent; Section 11 empowers the High Court to determine parties to the agreement.

Application

Indowind never signed or approved. No evidence of assent or recognized doctrine to bind it as a non-signatory.

Conclusion

Indowind is not bound by the arbitration clause; appointment decisions must respect party status under Section 11.

Glossary

Non-signatory: A person/company that did not sign the main agreement.
Section 7: Defines “arbitration agreement”; requires writing and consent.
Section 11: Allows appointment of arbitrators; court decides who are parties to the agreement.
Nominee: A person/entity named to receive rights; does not equal consent unless authorized.