Supreme Court Overturns High Court’s Arbitration Referral, Highlights Key Aspects of Privity of Contract

Case Name: Hindustan Petroleum Corporation Ltd. v. BCL Secure Premises Pvt. Ltd.
Citation: 2025 INSC 1401
Date of Judgment/Order: 9th December 2025
Bench: J.B. Pardiwala, K.V. Viswanathan

Held: The Supreme Court allowed the appeal and set aside the High Court’s judgment, ruling that there was no arbitration agreement between the parties, and therefore, the dispute was not arbitrable under the Arbitration and Conciliation Act, 1996.

Summary: This case arose from a dispute between Hindustan Petroleum Corporation Ltd. (HPCL) and BCL Secure Premises Pvt. Ltd. (BCL) over the performance of a tender involving the Tank Truck Locking System (TTLS). BCL sought arbitration under Section 11 of the Arbitration and Conciliation Act, but the High Court had referred the matter to arbitration, ruling that an agreement existed. The Supreme Court found that there was no direct privity of contract between HPCL and BCL, and the arbitration agreement could not be invoked by a non-signatory. The Court emphasized the importance of privity of contract and the lack of sufficient evidence linking BCL to the arbitration agreement.

Decision: The appeal was allowed, and the Supreme Court set aside the High Court’s order referring the dispute to arbitration. The Court concluded that BCL was not a party to the arbitration agreement and could not claim the benefits of the agreement made between HPCL and AGC. The dispute was dismissed with no further action directed in the arbitration process.