It should be noted that the Indian courts have held that the assignment of rights is not permissible. However, the assignment is allowed during the arbitration process. This is contradictory because the pending arbitration procedure is considered only a claim. This should be addressed by the courts or by the legislature. In some other jurisdictions, the corporate veil was annulled in the context of arbitration in the so-called „business group“ doctrine following the decision of the ICC dow Chemical/Isover Saint Gobain, which was later approved by the Paris Court of Appeal. One of the characteristics of the claim in this case was that the third parent company was effectively and individually involved in the conclusion, performance and termination of the corresponding contract that included the arbitration agreement. There are cases where parties were bound by arbitration agreements to which they were not originally parties. We provide an overview of some of the most common scenarios and examples, including the „business group“ doctrine, divestment, universal succession and third-party rights. Section 8 of the Act provides only limited provisions under which arbitration agreements have a binding effect on the rights of third parties. A third party is required to sue through arbitration to enforce its obligations under one of the parties. However, if the third party is a defendant, it is entitled to decide whether to submit to the jurisdiction of an arbitration tribunal or the jurisdiction of the court. The application of the law to third parties in arbitration contracts was confirmed to Nisshin Shipping Co Ltd against Cleaves – Co Ltd and others.
While a general succession cannot take place under English law, English law recognizes the effects of a merger by universal succession vis-à-vis foreign companies domiciled in jurisdictions that apply the term. In Eurosteel Ltd/Stinnes AG, the High Court considered the impact of a merger of a German party by universal succession on the arbitration proceedings currently under way at the time.