Plaintiff and Defendant 1 had entered into Shareholders Agreement, Share Purchase Agreement and Memorandum of Understanding, which are to be read together in order to ascertain the aforesaid outstanding consideration. A

The facts of the given situation are similar to the case Magic Eye Developers Pvt. Ltd. vs. Green Edge Infra Pvt. Ltd. & Ors. decided by Delhi High Court on 21st May, 2020. The relevant part of the case is discussed as under: The two main grounds on which plaintiff contests the present application seeking reference of disputes to arbitration is firstly that in the suit besides the recovery of the acknowledged unsecured liability the plaintiff has also sought a decree of damages, which is not an arbitrable dispute and the suit would be thus maintainable as held by the Supreme Court in the decision Sukanya Holdings Pvt. Ltd. v. Jayesh H. Pandya reported as 2003 (5) SCC 531. Secondly, it is urged that the defendant Nos. 2 and 3 not being party to the Shareholders Agreement (SHA), Share Purchase Agreement (SPA) and the Memorandum of Understanding (MOU) and thus not party to the clauses agreeing to refer the dispute to the arbitration, the application filed by the defendant No. 1 is liable to be dismissed. The first plea of learned counsel for the plaintiff that since the plaintiff has sought the relief of damages for which there is no arbitration agreement and the reliefs in the present suit cannot be bifurcated, hence the dispute cannot be referred to arbitration deserves to be rejected. A perusal of the claim for damages from the plaint is evidently based on the failure of defendant No. 1 to perform its contractual obligations as entered into vide the SHA, SPA and MOU is an arbitrable dispute duly governed by the arbitration clauses in the SHA, SPA and MOU. The two reliefs sought in the plaint are not required to be bifurcated as held in Sukanya Holding (Supra) and can be very well decided by arbitration. Plea of the plaintiff that defendant Nos. 2 and 3 are not parties to the SHA, SPA and MOU and thus being third parties to the arbitration agreement, the disputes cannot be referred to arbitration is also liable to be rejected. In the plaint case of the plaintiff itself is that defendant Nos. 1, 2 and 3 companies are the companies of one family and defendant No. 1 company with an authorized share capital of ₹1,00,000/- has no work and has been incorporated to perpetrate financial jugglery of funds with defendant Nos. 2 and 3 companies with a motive to defraud innocent third parties. The plaintiff itself claims that the corporate veil of the three companies deserves to be pierced in view of the manner of transfer of funds and siphoning thereof. Thus, according to the plaint itself defendant Nos. 1, 2 and 3 are group companies of a single family. Thus Supreme Court in Cheran Properties Limited vs. Kasturi & Sons Limited 2018 (16) SCC 413, came to the conclusion that even if the third party was not impleaded as a party to the arbitral proceedings, the said party would be bound by the award and the award can be enforced against it, once the tests embodied under Section 35 of the Arbitration and Conciliation Act are fulfilled. Though defendant Nos. 2 and 3 have filed separate written statements claiming mis-joinder of parties and causes of action in the suit by the plaintiff and that the suit was liable to be dismissed against the plaintiff and in favour of defendant Nos. 2 and 3 for the reason there was no privity of contract between the plaintiff and defendant Nos. 2 and 3 since the SHA, SPA and MOU were executed between the plaintiff and defendant No. 1, however, in response to the cause of action paragraph-29 of the plaint wherein it is stated that the subject matter of the suit cannot be referred to arbitration as there is no provision under the Arbitration and Conciliation Act, 1996 for splitting the cause or the parties and referring the subject matter of the suit to the arbitrator, defendant Nos. 2 and 3 in their written statements have simply rebutted the said paragraph as denied for want of knowledge and that it did not pertain to defendant Nos. 2 and 3. It may be also noted that during the course of arguments the defendant Nos. 2 and 3 never opposed the plea of defendant No. 1 that the disputes are liable to be referred to arbitration. Considering the fact that there are valid agreements between the plaintiff and defendant No. 1 containing clauses for reference of disputes to arbitration and defendant Nos. 2 and 3 being group companies of defendant No. 1, from the intent of the parties as noticed from the agreements as also the averments in the plaint it is evident that not only would defendant No. 1 but also the defendant Nos. 2 and 3 companies be amenable to the jurisdiction of the arbitrator as per the arbitration clauses is the SHA, SPA and MOU. Consequently, the present application is disposed of holding that the present suit is not maintainable and the disputes between the parties are required to be referred to the arbitration. In view of the above mentioned case, it may be said that the arbitration application will be allowed.