WHOSE CONTRACT GOVERNS IN A COMPOSITE TRANSACTION?
IDENTIFYING THE PRINCIPAL AGREEMENT AND RESOLVING SEAT CONFLICTS IN TRIPARTITE PLATFORM ARRANGEMENTS
AUTHOR – HARSHA SUTHAR, NALSAR UNIVERSITY OF LAW, HYDERABAD
BEST CITATION – HARSHA SUTHAR, WHOSE CONTRACT GOVERNS IN A COMPOSITE TRANSACTION? IDENTIFYING THE PRINCIPAL AGREEMENT AND RESOLVING SEAT CONFLICTS IN TRIPARTITE PLATFORM ARRANGEMENTS, INDIAN JOURNAL OF LEGAL REVIEW (IJLR), 6 (10) OF 2026, PG. 203-209, APIS – 3920 – 0001 & ISSN – 2583-2344.
ABSTRACT
Indian courts have long permitted non-signatories to be impleaded in arbitration where a dispute forms part of a “composite transaction.” This principle is tested most acutely in tripartite platform arrangements, where an end-user contracts with an intermediary platform, which in turn contracts with an independent service provider, and the arbitration clause, if any, resides only in the second, back-end agreement. This article examines two connected questions arising from that structure: which of the layered agreements qualifies as the “principal” agreement for the purposes of the composite transaction doctrine, and, where both agreements contain arbitration clauses naming different seats, which seat should prevail in a consolidated proceeding. Drawing on Chloro Controls India (P) Ltd. v. Severn Trent Water Purification Inc., Ameet Lalchand Shah v. Rishabh Enterprises, Cox and Kings Ltd. v. SAP India (P) Ltd., and the line of authority on consolidation beginning with P.R. Shah, Shares & Stock Brokers Pvt. Ltd. v. B.H.H. Securities Pvt. Ltd., this article argues that the back-end agreement between the platform and the service provider is properly the principal agreement, that an arbitration clause located there can in principle draw in the end-user, and that the seat named in that agreement should take primacy over a differing seat in the end-user’s own contract. The article then identifies a structural lapse that survives this analysis: the threshold requirement of proving composite-transaction status is fact-intensive and litigation-heavy, and disproportionately burdens the end-user, the party least equipped to bear that cost. The doctrine, designed as a shield against contractual fragmentation, can accordingly still function as a sword in the hands of the party that drafted the fragmented agreements in the first place.
Keywords: composite transaction doctrine, non-signatories, seat of arbitration, tripartite agreements, platform contracts, Arbitration and Conciliation Act 1996