Non-Signatory, Non-Existent LLP Cannot Invoke Arbitration Protection Through Group Of Companies Doctrine: Meghalaya High Court

The Meghalaya High Court has dismissed an appeal filed by Suraksha Salvia LLP against the State Government's termination of a Public-Private Partnership (PPP) for a diagnostic centre in Shillong, ruling that a company that was not even in existence on the date of agreement execution cannot seek protection under section 9 of the Arbitration and Conciliation Act. The Division Bench comprising of Chief Justice Soumen Sen and Justice H.S. Thangkhiew, on Tuesday, upheld the Commercial Court's decision to reject the interim relief stating that for the Group of Companies doctrine to be applicable, a “party” to an arbitration agreement and a one specifically in existence at the time of signing the agreement is necessary to claim interim reliefs. In 2019, in lieu of enhancing public healthcare by establishing a diagnostic centre, the Meghalayan government's Department of Health and Family Welfare and a Private enterprise, Suraksha Salvia Global LLP had signed a Memorandum of Understanding (MOU) to establish and operate a diagnostic centre in Meghalaya. The said centre was being operated at Pasteur Hills, Shillong until the State Government identified the Pasteur site as a suitable centre for a full-fledged medical college, ultimately leading the government to terminate the diagnostic centre's MOU in January 2025. Claiming to have invested money into the competition of the project, Suraksha Salvia LLP had petitioned under Section 9 of the Arbitration Act, to the Commercial Court for securing interim reliefs against termination. Initially granted, the interim injunction was later revoked on the grounds that Suraksha Salvia LLP had not signed the Memorandum of Understanding, leading to appeal the matter before the High Court Division Bench. Senior Advocate Jishnu Saha arguing on behalf of the LLP contended that Suraksha Salvia LLP, which was created on July 26, 2019, was the actual executing entity and that the MoU's reference to "Suraksha Salvia Global LLP" was only a misrepresentation. Citing Cox and Kings v. SAP India, he relied on the Group of Companies doctrine and also referenced the theories of misnomer, adoption by action, and substantial performance. Learned Advocate General A. Kumar, on behalf of the State of Meghalaya contended that only a "party" to the arbitration agreement is eligible for Section 9 relief and that the Memorandum of Understanding was expressly signed with Suraksha Salvia Global LLP. According to the State, arbitration protection cannot be invoked by a third party or stranger, particularly if the LLP was created after the MoU. The Division Bench comprising of Chief Justice Soumen Sen and Justice H.S. Thangkhiew, on 9th December, 2025, noted that the State Government and Suraksha Speciality LLP, in collaboration with Salvia Global LLP, executed the MOU and Suraksha Salvia LLP was not incorporated until July 2019—more than a month after the deal was signed. The Court highlighting that only parties to the agreement are entitled to arbitration remedy under Section 9, held that Suraksha Salvia LLP could not be a signatory or assert any claims under the MoU as it did not exist on the date of the agreement. Regarding the Group of Companies doctrine, the Court referred extensively to the Supreme Court rulings in Cox & Kings v. SAP India and OPG Power v. Enexio, but firmly held that even under this doctrine, existence of the non-signatory at the time of execution of the agreement is a pre-requisite condition. The Court said: “the doctrine of group of companies would apply, provided there is an intention of a non-signatory to be a party to the arbitration agreement. For the purpose of a non-signatory to be a party to the arbitration agreement, the said non-signatory should be in existence on the date when the agreement was entered into. Admittedly, on the date of the MOU was entered into, the present appellant/petitioner was non-existent and hence the ratio of the aforesaid decisions would have no application in the instant case”. Accordingly, the Meghalaya High Court upheld the Commercial Court's order of revocation of the interim protection and dismissed the appeal as unmaintainable, ruling that the appellant could not claim interim relief as it was not a party to the arbitration agreement. Case Title: Suraksha Salvia LLP v. State of MeghalayaCase No.: FA No. 3 of 2025 with connected matters Coram: Chief Justice Soumen Sen and Justice H.S. Thangkhiew Date of Judgment: 09 December 2025 Appearances: Counsel for Appellant - Mr. J. Saha, Senior Advocate; Counsel for State - Mr. A. Kumar, Advocate General Click Here To Read/Download OrderCitation: 2025 LiveLaw (Megh) 16

Non-Signatory, Non-Existent LLP Cannot Invoke Arbitration Protection Through Group Of Companies Doctrine: Meghalaya High Court

Shivani Ps

This is a premium content
Available exclusively to
Our subscribers

INR 1099+GST

Tags

Shivani Ps

Non-Signatory, Non-Existent LLP Cannot Invoke Arbitration Protection Through Group Of Companies Doctrine: Meghalaya High Court

Shivani Ps

This is a premium content Available exclusively to Our subscribers

INR 1099+GST

Tags

Shivani Ps

This is a premium content
Available exclusively to
Our subscribers