Full Judgment Text
REPORTABLE
2025 INSC 1342
IN THE SUPREME COURT OF INDIA
CIVIL ORIGINAL JURISDICTION
ARBITRATION PETITION NO. 65 OF 2023
BALAJI STEEL TRADE ...PETITIONER (S)
VERSUS
FLUDOR BENIN S.A. & ORS. …RESPONDENT(S)
J U D G M E N T
1. For the sake of convenience and ready reference, this judgment
contains the following parts: -
Table of Contents
I. : .......................................................................................................... 2
Introduction
II. Facts : ..................................................................................................................... 3
(i) Buyer and Seller Agreement between Petitioner and Respondent No.1: ................... 4
(ii) Execution of Sales Contracts with Respondent No. 2 ................................................ 5
(iii) Execution of the Addendum ....................................................................................... 6
(iv) HSSAs executed between Petitioner and Respondent No. 3 ..................................... 6
(v) Respondent No.1’s invocation of Benin Arbitration ..................................................... 7
(vi) Petitioner’s institution of Anti-Arbitration Injunction Suit ............................................. 8
(vii) Filing of the Present Petition ...................................................................................... 9
Signature Not Verified
Digitally signed by
KAPIL TANDON
Date: 2025.11.21
18:32:07 IST
Reason:
(viii) Culmination of Benin Arbitration: ............................................................................... 9
1
III. Submissions : ....................................................................................................... 9
(i) Submissions on behalf of the Petitioner ................................................................. 9
(ii) Submissions on behalf of Respondent No. 1 ....................................................... 11
(iii) Submissions on behalf of Respondent No. 2 ....................................................... 13
(iv) Submissions on behalf of Respondent No. 3 ....................................................... 14
IV. Analysis : ............................................................................................................ 14
(i) Maintainability of the Section 11(6) Petition in International Commercial
Arbitration………………………………………………………………………………...15
(ii) Inapplicability of Arbitration Clauses in Sales Contracts and HSSAs to dispute
arising from BSA and Addendum ......................................................................... 17
(iii) No novation or supersession of BSA by Sales Contracts and HSSAs .................. 18
(iv) Initiation and Culmination of Benin Arbitration: ..................................................... 21
(v) Dismissal of Anti-Arbitration Injunction by High Court of Delhi ............................. 22
(vi) Findings of High Court of Delhi as ‘Issue Estoppel’ .............................................. 25
(vii) Misplaced reliance on Group of Companies Doctrine .......................................... 28
V. Conclusion and Decision : ................................................................................. 29
I. Introduction:
2. The Arbitration Petition under Section 11 of the Arbitration and
1
Conciliation Act, 1996 is an attempt by the petitioner to anchor an
international commercial arbitration, arising out of Buyer and Seller
Agreement (BSA), and its Addendum which is governed by laws of
Republic of Benin, into the domestic framework of the Act, 1996 by placing
reliance on dispute resolution clauses contained in subsequent
contractual arrangements, namely Sales Contracts executed with
respondent no. 2 and High Seas Sales Contracts (HSSAs) executed with
1
Hereinafter, “Act, 1996”.
2
respondent no. 3. The prayer is for constitution of an Arbitral Tribunal and
a composite reference of the alleged disputes including within the
embrace the three respondents as its parties by invoking the group of
companies doctrine. We have considered issue of jurisdiction, concluded
decision between the parties, and also the propriety of the present petition
and dismissed the petition. We have held that as the primary contract
(BSA) incorporates (i) international commercial arbitration, question of
application of Section 11 contained in Part I does not arise, (ii) BSA with
respondent no. 1 is the “mother agreement’' to which respondents no. 2
and 3 are aliens, (iii) the petitioner is barred by issue estoppel arising
owing to dismissal of anti-arbitration injunction suit and also that, (iv) there
is no compositeness of the transaction so as to attract group of companies
doctrine.
II. Facts:
3. The petitioner, Balaji Steel Trade, has approached this Court under
Section 11(6) read with Section 11(12)(a) of the Act 1996 praying for
appointment of sole arbitrator to adjudicate and decide upon dispute that
has arisen between the parties owing to the alleged breach of Buyer and
Seller Agreement (hereinafter, “BSA”) dated 06.06.2019 executed
between the present petitioner and respondent no.1, Fludor Benin S.A.
Petitioner prays for a composite reference to arbitration by seeking the
3
inclusion of respondent no. 2, M/s Vink Corporations DMCC, a company
incorporated in Dubai, UAE, and respondent no. 3, Tropical Industries
International Pvt. Ltd., a private limited company registered in New Delhi,
India. As per the petitioner, all three respondents are owned and controlled
by Tropical General Investments Ltd. Group (“TGI Group”) whereby TGI
Group holds 100% shares in respondent no.1, 51% shares in respondent
no. 2 and 99.73% shares in respondent no.3.
4. Buyer and Seller Agreement between Petitioner and Respondent
No.1: The petitioner, Balaji Steel Trade, is a partnership firm engaged in
the business of steel trading as well as in the trade of various agricultural
commodities. Respondent No. 1, Fludor Benin S.A., is a private limited
company incorporated under the laws of Republic of Benin, a country in
West Africa. According to the petitioner, in the year 2018, respondent no.
1 made representations to the petitioner with respect to the supply of
cotton seeds. Consequent thereto, both parties entered into negotiations
with a view to explore a business arrangement for the manufacture and
sale of cottonseed cakes.
5. In furtherance of the aforesaid discussions, the parties executed a
Collaboration and Buy Back Agreement (“Collaboration Agreement”)
dated 10.12.2018. Under the said agreement, the petitioner undertook to
provide the requisite machinery and establish a manufacturing unit at
4
Bohicon, a city in Benin, for the manufacture of cottonseed cake.
Respondent no. 1, on its part, assumed the obligation to manufacture the
2
said product and supply it to the petitioner in India. Clause 20 of the
Collaboration Agreement contained an arbitration provision stipulating
that disputes thereunder would be referred to arbitration before CAMEC-
3
CCIB in Benin.
6. Subsequently, and in supersession of the Collaboration Agreement,
the petitioner and respondent no. 1 entered into a Buyer-Seller Agreement
(“BSA”) dated 06.06.2019, for a term of five years, governing the supply
and sale of the product. The said BSA also incorporated an arbitration
clause this time providing for ad hoc arbitration to be conducted in Benin.
Article 11 of the BSA incorporating arbitration agreement is as follows:
“ 11. Arbitration: All the disputes will be resolved by discussions and
if Arbitration becomes only option then it will take place in Benin and
decision will be binding on both the parties and Arbitration fee will be
borne by the losing party.”
7. Execution of Sales Contracts with Respondent No. 2: After having
executed the BSA, on 17.10.2019 respondent no. 1 assigned its obligation
for supply of product to respondent no. 2, M/s. Vink Corporations DMCC.
In order to give effect to the said assignment and to facilitate supply of the
2
20. Arbitration: All the disputes shall be settled amicably and if arbitration becomes the sole option
to settle a crises, it shall take place in Benin before CAMEC-CCIB and the decision shall be binding on
both parties. The arbitration costs shall be borne by the losing party.
3
“Centre d’Arbitrage, de Médiation et de Conciliation de la Chambre de Commerce et d’Industrie du
Bénin”
5
product, the petitioner and respondent no. 2 entered into a series of Sales
Contracts providing for reference of dispute to sole arbitrator in
accordance with the Act, 1996, with the place of arbitration at New Delhi.
The relevant portion of the dispute resolution clause is as follows:
“ Dispute Resolution: Any dispute arising out of or relating to this
agreement, including any question regarding its existence, validity, or
termination, which cannot be amicably resolved by the Parties, shall
be settled before a sole arbitrator in accordance with the Indian
Arbitration and Conciliation Act, 1996. The sole arbitrator shall be
appointed mutually by the parties. In the event the Parties fail to agree
on a sole arbitrator within Thirty (30) days from the date of notice of
arbitration, then appointment of such sole arbitrator shall take place
as per the provisions of the Indian Arbitration and Conciliation Act,
1996. The place of arbitration should be New Delhi and language shall
be English. The resulting arbitral award shall be final and binding
without right of appeal, and judgment upon such award may be
entered in any court having jurisdiction thereof. A dispute shall be
deemed to have been arisen when either Party notifies the other Party
in writing to that effect.”
8. Execution of the Addendum: The terms of BSA were modified on
09.01.2021 by signing an Addendum, terms of which eliminated
petitioner’s exclusive rights of purchase of the product thereby allowing
respondent no. 1 to sell the product to third parties also. The petitioner
contends that, following the execution of the Addendum, there was a
shortfall in the quantity of the product supplied to it.
9. HSSAs executed between Petitioner and Respondent No. 3: In
order to address the said shortfall, respondent no. 3, Tropical Industries
International Pvt. Ltd., was introduced to the petitioner. Consequent
thereto, the petitioner and respondent no. 3 entered into a series of High
6
Sea Sale Contracts (“HSSA”), which, inter alia, delineated the respective
rights and obligations of respondent no. 3 as the seller and the petitioner
as the purchaser of the product. Said HSSAs also contained arbitration
clause providing that:
“g) Dispute if any, between the parties arising in relation to this
agreement of HIGH SEAS SALE shall be referred to the arbitration
under the Indian Arbitration Act 1940. In witness whereof, the parties
have said and subscribe their hands at DELHI, INDIA, the day and
year first hereinabove written.”
10. Disputes arose between the parties with respect to quantity of
supply and payments inter-se which led to petitioner serving a notice
dated 15.07.2022 served on all party respondents. Respondent nos. 2 and
3 replied to said notice shrugging their responsibility on the ground of lack
of privity and separateness from respondent no. 1. Petitioner then issued
termination notice dated 06.09.2022 under which BSA and the Addendum
were terminated.
11 . Respondent No.1’s invocation of Benin Arbitration: Things took a
turn when the petitioner received a notice from Chamber of Commerce,
Benin - CAMEC dated 12.04.2023 apprising the petitioner that respondent
no. 1 has requested for settlement of disputes by arbitration in terms of
the BSA before it in Benin and called upon the petitioner to nominate its
arbitrator. Petitioner refuted to the said arbitration by sending its objections
vide letter dated 15.05.2023. Thereafter, respondent no.1 on 31.05.2023
sent notice invoking arbitration under the laws of Benin to the petitioner to
7
which the petitioner replied on 30.06.2023 denying the contents of the
notice and resisting to Benin as seat of arbitration. Further objection of the
petitioner was with regard to the non-joinder of respondent no. 2 and
respondent no. 3, who were, as per petitioner, proper and necessary
parties.
12. Instead of submitting to the Benin arbitration, the petitioner issued
its own notice invoking arbitration to all the three respondents purportedly
in terms of Section 21 of the Act, 1996 referring the disputes arising out of
the BSA, Sales Contract and HSSAs to arbitration and proposed the name
of sole arbitrator. Respondent no. 1 however continued to proceed with
Benin arbitration and filed an application before the Commercial Court of
Cotonou, Benin (“Benin Court”) seeking appointment of arbitrator which
was allowed on 26.07.2023, whereby the Benin Court appointed one Dr.
Gilbert Ahouandjinou as the sole arbitrator for determination of disputes
between the petitioner and respondent no. 1.
13. Petitioner’s institution of Anti-Arbitration Injunction Suit: Petitioner
however proceeded to institute Anti-Arbitration Injunction Suit (CS
(Comm) No. 544 of 2023) before the High Court of Delhi on 10.08.2023,
inter alia praying for a decree of permanent injunction restraining the
respondent no. 1 from proceeding/continuing with the Benin Arbitration.
8
14. Filing of the Present Petition: Pending disposal of anti-arbitration
injunction suit, more or less around the same time, petitioner on
23.08.2023 filed the present application under Section 11(6) read with
Section 11(12)(a) of the Act, 1996 for appointment of sole arbitrator for
adjudication of the disputes.
15. Culmination of Benin Arbitration: Pending disposal of the anti-
arbitration injunction suit, and the application under Section 11(6) of the
Act, 1996 for constitution of arbitral tribunal before this Court, the ad hoc
arbitration in Benin got concluded and the sole arbitrator rendered its
award on 21.05.2024.
16. Further fact having a bearing on the present proceeding is the
dismissal of the anti-arbitration injunction suit (Comm) No. 544 of 2023 by
High Court of Delhi on 08.11.2024.
III. Submissions:
17. Submissions on behalf of the Petitioner Mr. Devadatt Kamat, senior
:
counsel assisted by Ms. Shruti Sabharwal, Mr. Nishant Doshi and others,
appearing on behalf of the petitioner has made the following submissions:
(i) Disputes against all respondents arise from a composite transaction,
as the series of agreements are interlinked and founded on a common
commercial objective under the TGI Group. Respondents nos. 2 and 3
9
supplied goods on the instructions of respondent no. 1, thereby
performing obligations under the BSA by conduct. This, coupled with
contemporaneous correspondence and the common legal notice dated
15.07.2022 issued to all respondents, shows that the disputes are
inseparable and require a composite reference under the group of
4
company doctrine .
(ii) The dispute resolution clause in the BSA stands novated by the
arbitration clauses contained in the subsequent Sales Contracts and
HSSAs executed with respondent nos. 2 and 3. Reference in this regard
has been made to Sales Contract between the petitioner and respondent
no. 2, the arbitration clause of which is framed as, “ appointment of such
sole arbitrator shall take place as per the provisions of the Indian
Arbitration and Conciliation Act, 1996 ”.
(iii) Alternatively, even if the BSA clause is given effect, it is submitted that
Benin was indicated only as the venue, not the juridical seat, since Article
11 merely states that arbitration “ will take place in Benin .” In contrast, the
later contracts evince a clear intention to adopt Indian law as the
governing law of arbitration. Relying on Mankastu Impex Pvt. Ltd. v.
5
Airvisual Ltd. , it is argued that the seat must be inferred from the parties’
4
Cox & Kings Ltd. v. SAP India (P) Ltd., 2023 SCC OnLine SC 1634. (hereinafter, Cox & Kings )
5
(2020) 5 SCC 399. (hereinafter, Mankastu Impex)
10
conduct and the governing law, which unmistakably points to India as the
seat.
(iv) Arbitral proceedings in Benin and the consequent award are non-est
in law, having been unilaterally invoked by respondent no. 1 to pre-empt
petitioner’s claims under Indian law. Benin is not a reciprocating territory
6
under Section 44(b) of the Act, 1996, and any award rendered there
would be unenforceable in India.
(v) Lastly, it is argued that the Delhi High Court’s findings in the anti-
arbitration injunction suit have no bearing on these proceedings, as the
inquiry under Section 45 (before the High Court) and Section 11 (before
this Court) operate in distinct spheres. The limited scrutiny is only to
enquire about the existence of a valid arbitration agreement, and all other
questions can be raised and contested before the arbitral tribunal itself.
18. Submissions on behalf of Respondent No. 1: Mr. Nakul Dewan,
senior counsel, assisted by Mr. Susshil Daga, Mr. Pallav Mongia and
others made the following submissions opposing the maintainability of the
petition. He would strongly urge for dismissal of the present petition on the
ground that it is abuse of process for the following reasons:
6
Section 44. Definition -…
(a) …
(b) in one of such territories as the Central Government, being satisfied that reciprocal provisions have
been made may, by notification in the Official Gazette, declare to be territories to which the said
Convention applies.
11
(i) It is urged that Part I of the Act, 1996, including Section 11, has no
application since the dispute arises solely under the BSA, which expressly
stipulates that arbitration “ shall take place in Benin ” and that the governing
law shall be the laws of Benin (Article 5 of the Addendum). Hence, the
arbitration under BSA is international commercial arbitration, governed by
the Benin Arbitration Act.
(ii) The legal notice issued by the petitioner on 15.07.2022 virtually seeks
specific performance of the BSA on the ground that the respondent has
breached the agreement by not supplying the contracted quantity of
goods. On the other hand, his client invoked arbitration on 31.05.2023
under the BSA, on the ground that the petitioner had defaulted in
accepting delivery, resulting in losses. Under these circumstances, the
dispute arises out of rights and obligations under BSA, for which the
7
governing law is that of Republic of Benin, the Benin Arbitration Act being
the curial law.
(iii) Respondent no. 1 is not bound by the arbitration clauses in the Sales
Contracts or HSSAs, which were executed independently between the
petitioner and respondent nos. 2 and 3 as the BSA neither refers nor
incorporates these subsequent contracts. The principles of group of
7
Uniform Act on Arbitration of the Organisation for the Harmonisation of Business Law in Africa
(OHADA).
12
companies doctrine as laid down in Cox & Kings , has no application to the
facts of the present case.
8
(iv) Placing reliance on Balasore Alloys Ltd. v. Medima LLC , respondent
no. 1 argues that the BSA is the principal or “mother” agreement, and
therefore its arbitration clause prevails over those in any ancillary or
subsequent contracts. Having consciously accepted Benin as the seat of
arbitration, the petitioner cannot now resile from its contractual
commitment or seek parallel proceedings in India.
(v) Lastly, the contention that the BSA stood novated or assigned through
the Sales Contracts and HSSAs is denied. Even if such assignment were
assumed, respondent nos. 2 and 3 would merely step into respondent 1’s
contractual position, leaving no ground for a separate or parallel
arbitration. In any event, all such issues fall within the jurisdiction of the
arbitral tribunal constituted under the BSA. The respondents further rely
on the Delhi High Court’s findings in the petitioner’s anti-arbitration
injunction suit, which, having attained finality, bar re-litigation of identical
issues.
19. Submissions on behalf of Respondent No. 2: Ld. Counsel for
respondent no. 2, M/s. Vink Corporations DMCC, submitted that the
multiple Sales Contracts that they have entered into with the petitioner
8
(2020) 9 SCC 136.
13
were standalone limited term contracts concluding with the delivery of the
goods. The arbitration clause is limited to, “ any dispute arising out of or
relating to this Agreement ”.
20. Submissions on behalf of Respondent No. 3: Similarly, Ld. Counsel
for respondent no. 3 submits that it and petitioner entered into four HSSAs
for delivering a specified quantity of the products detailed in each HSSAs.
The arbitration clause in each HSSA provided that “ Dispute if any,
between the parties arising in relation to this agreement of HIGH SEAS
SALE shall be referred to the arbitration under the Indian Arbitration Act
1940 ”. Hence, the said clause was limited to disputes arising out of the
specific HSSA between the petitioner and respondent no. 3.
21. Thus, respondent nos. 2 and 3 have submitted that no dispute has
arisen with respect to Sales Contracts or the HSSAs and that the disputes
raised by the petitioner are limited to BSA and the Addendum, with respect
to which they are aliens.
IV. Analysis:
22. At the outset, it is to be noted that the present application has been
filed under Section 11(6) read with Section 11(12)(a) of the Arbitration and
Conciliation Act, 1996 seeking appointment of a sole arbitrator for a
composite reference of disputes arising out of the (i) BSA, (ii) the Sales
Contracts, and (iii) the HSSAs. At this stage, the Court is required to advert
14
to the foundational question of whether there exists a valid and
enforceable arbitration agreement between the parties, which can form
9
the basis of an arbitral reference. Equally material is the principle that the
Court at this stage does not engage in a roving enquiry into merits but
10
confines itself to the existence and validity of an arbitration agreement.
23. Maintainability of the Section 11(6) Petition in International
Commercial Arbitration: However, before touching upon the merits of the
matter, we must first concern ourselves with the seminal question whether
the present petition is proper in the sense that whether this Court, in
exercise of jurisdiction under Section 11(6) read with Section 11(12)(a) of
the 1996 Act, can at all entertain a request for appointment of an arbitrator
in respect of a dispute which, as contended by respondent, is an
international commercial arbitration. This issue assumes foundational
importance because, if Part I of the 1996 Act stands excluded by virtue of
the parties’ choice of the seat of arbitration and the governing law, the
jurisdiction of this Court to entertain the application is ousted at the
threshold.
24. Section 2(1)(f) of the Act, 1996 defines ‘international commercial
arbitration’ as arbitration relating to disputes arising out of legal
9
SBI General Insurance Co. Ltd. v. Krish Spinning, 2024 SCC OnLine SC 1754.
10
Interplay between Arbitration Agreements under Arbitration and Conciliation Act, 1996 and Stamp Act,
1899, In Re, (2024) 6 SCC 1.
15
relationships, whether contractual or not, considered as commercial under
the law in force in India and where at least one of the parties is a foreign
national, whether that party is an individual, a body corporate, an
association or body of individuals or a foreign Government. Respondent
no. 1 being a company incorporated under the laws of Benin, the present
dispute squarely falls within the ambit of international commercial
arbitration. Once this characterisation is made, Section 2(2) of the Act
becomes immediately relevant, for it stipulates that Part I shall apply only
where the place of arbitration is in India, thereby mandating that Part I
stands excluded where the parties have chosen a foreign seat. This Court
has consistently held, beginning with Bharat Aluminium Co. v. Kaiser
11
Aluminium Technical Services Inc. (BALCO) , that Part I of the 1996 Act
has no application to arbitrations seated outside India. The seat has a
juridical significance in arbitration law: it determines the courts that
exercise supervisory jurisdiction over the arbitral proceedings.
25. Respondent no. 1 has urged that Part I, including Section 11 is not
applicable to the BSA dated 06.06.2019. At the threshold, it is common
ground that the relationship between the petitioner and respondent no. 1
was crystallised in the BSA and its Addendum dated 09.01.2021. These
agreements constitute the principal arrangements between the two
11
(2012) 9 SCC 552.
16
contracting entities. The arbitration clause contained in Article 11 of the
BSA explicitly provides that in the event of disputes, arbitration shall “ take
place in Benin ,” while Article 5 of the Addendum makes it further explicit
that the BSA shall be “ construed, governed and interpreted in accordance
with the laws of Benin .” In Mankastu (supra), this Court emphasised that
the seat of arbitration is to be ascertained from the intention of the parties
as gathered from the agreement as a whole. Further, in BGS SGS SOMA
12
JV v. NHPC Ltd. this Court observed that;
“ It will thus be seen that wherever there is an express designation
61.
of a “venue”, and no designation of any alternative place as the “seat”,
combined with a supranational body of rules governing the arbitration,
and no other significant contrary indicia, the inexorable conclusion is
that the stated venue is actually the juridical seat of the arbitral
proceeding. ”
26. Article 11 of BSA read with Article 5 of the Addendum unequivocally
shows that the parties not only indicated the geographical location of
arbitration but also selected the governing law. The dual indications
together leave little scope for doubt that Benin was intended to be the
juridical seat with laws of Benin as the curial law.
27. Inapplicability of Arbitration Clauses in Sales Contracts and HSSAs
to dispute arising from BSA and Addendum : The petitioner has sought to
place reliance on arbitration clauses contained in Sales Contracts and
HSSAs to argue that it was the intention of the parties to arbitrate in India.
12
(2020) 4 SCC 234.
17
Petitioner argued that mere mention in BSA that arbitration shall take
place in Benin does not by itself make Benin the juridical seat especially
in light of contrary indica in terms of arbitration clauses in Sales Contracts
and HSSAs. To buttress this proposition, petitioner further argued that
BSA stood novated or superseded by the Sales Contracts and HSSAs
which provide for arbitration in India. This argument is equally
unmeritorious. It is well settled that novation of a contract must be
established by clear and unequivocal intention of the parties to substitute
the earlier agreement with a new one. The BSA dated 06.06.2019
constituted the principal or “mother” contract between the petitioner and
respondent no. 1, defining their long-term commercial relationship,
specifying supply obligations, pricing structure, risk allocation, and a self-
contained dispute resolution clause providing for arbitration “to take place
in Benin” under Benin law.
28. No novation or supersession of BSA by Sales Contracts and
HSSAs: By contrast, the Sales Contracts executed between the petitioner
and respondent no. 2, and the HSSAs executed with respondent no. 3,
were subsequent, limited-purpose instruments. They were entered into
only to facilitate execution of individual shipments once respondent no. 1
assigned part of its performance to other group entities. Each Sales
Contract and HSSA were confined to a specific consignment or
18
transaction, contained its own commercial terms such as quantity, price
and delivery schedule, and had separate arbitration clauses, one referring
disputes to arbitration under the Act, 1996 (for Sales Contracts) and the
other under the Indian Arbitration Act, 1940 (for HSSAs). None of these
contracts incorporate or refer to the BSA or its arbitration clause, nor did
they expressly substitute, novate, or supersede the BSA. Their scope
ended upon completion of delivery and payment under the respective
consignment.
29. The absence of cross-references or language of substitution makes
13
it impossible to infer novation under Section 62 of the Indian Contract
Act, 1872. The BSA continued to subsist independently and governed the
broader supply arrangement, while the Sales Contracts and HSSAs
merely operated as implementing or ancillary arrangements for discrete
transactions. As this Court observed in Balasore Alloys Ltd. , where
several contracts coexist, the arbitration clause of the mother agreement
governs the dispute unless a later contract unequivocally replaces it. The
petitioner has shown no such intention of substitution. Consequently, any
alleged default by respondent no. 1, such as short-supply or failure to
deliver contracted quantities, emanates from obligations under the BSA,
13
Section 62. Effect of novation, rescission, and alteration of contract : If the parties to a contract
agree to substitute a new contract for it, or to rescind or alter it, the original contract, need not be
performed.
19
not from the Sales Contracts or HSSAs, which stand concluded.
Therefore, the arbitration agreements in the Sales Contracts or HSSAs
cannot displace or override the arbitration clause in the BSA, and disputes
rooted in the BSA must be resolved exclusively through the arbitration
agreed therein, namely, arbitration seated in Benin and governed by Benin
law. Owing to the separateness of the three contractual instruments, it
cannot be said that there were any contrary indica in BSA in respect of
any other law.
30. In view of the aforesaid discussion, both the legal position and the
factual matrix converge to a single, inescapable conclusion. The very
nature of the present dispute is that of an “international commercial
arbitration” as defined under Section 2(1)(f) of the 1996 Act, respondent
no. 1 being a corporation incorporated under the laws of Benin. This
statutory characterisation necessarily triggers the application of Part II of
the 1996 Act when the arbitration is foreign-seated, and not Part I. Section
2(2) makes the position explicit by providing that Part I applies only where
the place of arbitration is in India; consequently, recourse to Section 11,
located within Part I, is available solely in respect of India-seated
arbitrations. As this Court explained in BALCO , reaffirmed in Mankastu ,
BGS SGS SOMA JV , and emphatically reiterated in PASL Wind
20
14
Solutions , Indian Courts have no jurisdiction to appoint an arbitrator for
a foreign-seated arbitration, irrespective of the nationality or domicile of
the parties. On the facts as well, the BSA and its Addendum constitute the
mother agreement, containing a clear and deliberate choice of Benin as
the juridical seat of arbitration and Benin law as the governing and curial
law. The subsequent Sales Contracts and HSSAs are merely ancillary,
facilitating performance of isolated shipments, and cannot override the
dispute resolution framework of the BSA. Thus, both in principle and in
the factual circumstances of the case, the arbitration agreement in the
BSA prevails. The disputes raised by the petitioner arise squarely from the
BSA, and the parties’ chosen forum for their adjudication is arbitration in
Benin. Accordingly, the invocation of Part I and the present request under
Section 11(6) of the 1996 Act is fundamentally misconceived, legally
untenable, and contrary to the statutory scheme as well as the autonomy
of the parties’ contractual design.
31. Initiation and Culmination of Benin Arbitration: It is significant to
note, even prior to the institution of the present proceedings, respondent
no. 1 had already invoked arbitration in terms of Article 11 of the BSA in
Benin. As already indicated, the Benin Commercial Court, vide order
dated 26.07.2023, appointed a sole arbitrator, Dr. Gilbert Ahouandjinou,
14
PASL Wind Solutions Pvt. Ltd. v. GE Power Conversion India Pvt. Ltd, 2021 SCC OnLine SC 331.
21
in exercise of powers available under the Benin Arbitration Act, thereby
constituting a tribunal under the parties’ chosen curial law. The arbitral
tribunal, after considering the objections, ruled affirmatively on its own
jurisdiction in accordance with the doctrine of kompetenz–kompetenz and
proceeded to adjudicate the substantive disputes arising out of the BSA.
32. The Benin-seated arbitral tribunal thereafter rendered a final and
reasoned award dated 21.05.2024. The consequence of this development
is twofold. First, the arbitral process agreed to by the parties in the BSA
has already culminated in an adjudication on the very disputes which the
petitioner now seeks to re-agitate through the present Section 11
proceedings. Second, once the tribunal has asserted and exercised its
jurisdiction and delivered a final award, the petitioner cannot seek to
initiate a parallel arbitral process in India in respect of the same subject
matter. Allowing such an endeavor would be wholly antithetical to the
principles of finality of arbitral proceedings, undermine the doctrine of
kompetenz–kompetenz, and would defeat the territorial principle that the
courts of the seat (Benin) exercise supervisory jurisdiction over the
arbitration.
33 . Dismissal of Anti-Arbitration Injunction by High Court of Delhi :
Another consideration which cannot be lost sight of is that petitioner’s
attempt to resist the Benin arbitration before the Delhi High Court failed in
22
light of the judgment dated 08.11.2024 whereby the High Court allowed
respondent no. 1’s application under Section 45 and dismissed the anti-
arbitration injunction suit filed by the petitioner. Although proceedings
under Section 45 of the 1996 Act are distinct in scope from an application
under Section 11, the reasoning adopted by the High Court, particularly
its interpretation of the BSA, the Addendum, and the inter-relationship of
the subsequent Sales Contracts and HSSAs, bears directly upon the
factual architecture that underlies the present petition. The High Court,
after a detailed examination of the contractual framework, arrived at a
categorical finding that the BSA and its Addendum form the principal and
operative contractual matrix between the petitioner and respondent no. 1,
and that the arbitration clause contained therein represents the parties’
deliberate and binding choice of dispute resolution. It held that the Sales
Contracts and HSSAs, being independent and self-contained
arrangements with respondent nos. 2 and 3 respectively, do not, and
cannot, supersede, modify, or dilute the arbitration agreement in the BSA,
nor do they create a composite dispute capable of attracting a unified
arbitral mechanism under Indian law. To this effect, it was observed:
Defendant No. 1 is not a party to either the Sales Contracts or
“ 52.
HSSAs. Thus, there is no question of it being bound by the arbitration
clause contained in the Sales Contracts and/or HSSAs. It is an
admitted fact that Plaintiff and Defendant No. 1 signed the BSA and
Addendum. If Defendant No. 1 assigned its obligation to Defendant
No. 2 & 3 and Plaintiff agreed to the same, it would result in Defendant
No. 2 & 3 stepping into the shoes of Defendant No. 1 for the purposes
of the BSA and addendum. Defendants No. 2 & 3 would then be bound
23
by the BSA and Addendum, including Article 11 and Article 5,
respectively, but it cannot be vice-versa. Hence, Articles 11 and article
5 would continue to remain the binding arbitration agreement between
the parties. The arbitration clause/Article 11 of BSA and Article 5 of
the Addendum reads as under:
…….
After pursuing the arbitration clauses of BSA and Addendum, it is clear
that the plaintiff and defendant no. 1 had, out of their own will, choose
the preferred place of arbitration to be in Benin. Therefore, Arbitration
would be the method of resolving any disagreement that might
emerge between the parties to the BSA and addendum. Therefore, it
is clear that the agreements entered into between defendants no 2 &
3 and the plaintiff are separate from the BSA and addendum.
The supplementary obligation, as stated by the plaintiff, would be
53.
limited to the consignment identified in the Sales Contracts or HSSAs.
The sales contracts and HSSAs were entered for the supply of the
product on behalf of defendants no 2 & 3. Neither is there a mention
of any article/clause that states that the sales contracts and HSSAs
are just an addition to the BSA, nor any clause that states that
addendum and parties to BSA and addendum would be governed by
the clauses of sales contracts and HSSAs. Defendants No. 2 & 3 are
individual companies. Therefore, the contracts or agreements entered
into between Defendants no 2 & 3 and the plaintiff containing an
arbitration clause with the place of arbitration in India will be
enforceable separately.”
34. The findings and conclusions have been summed up by the High
Court in paragraph 60 in the following manner:
“ 60. This court finds that the BSA, Addendum, and Sales contracts,
along with HSSAs are distinct contracts having different parties,
differing scope of work and different arbitration clauses. Merely stating
that the defendant no 2 & 3 are the companies which are run by the
defendant no.1 is not sufficient. Defendants No. 1 and the plaintiff
have entered into the BSA and Addendum as individual entities
therefore, any dispute that arises out of these agreements will be
resolved as per the dispute resolution mechanism provided in the
articles of these agreements, i.e., as per article 11 of BSA and article
5 of Addendum. The Initiation of arbitration proceedings under
CAMEC in April 2023 and issuance of the Fludor NOA, demonstrate
that the Plaintiff‟s concerns stem from the BSA read with the
Addendum as the cause of action of the present Suit is all rooted in
the BSA and the Addendum. Therefore, disputes, if any, are to be
adjudicated as per the Parties’ chosen adjudicatory forum, i.e., under
Article 11 of the BSA and the arbitration clause provided under Article
24
11 of the BSA. Clearly Plaintiff has never questioned the validity of
BSA and Addendum, which means that the Agreements are not null,
void, inoperative or incapable of being performed.
”
(emphasis supplied)
In terms of the above, the High Court of Delhi allowed respondent no. 1’s
application under Section 45 and dismissed the suit filed by the petitioner.
35. Findings of High Court of Delhi as ‘Issue Estoppel’ : Importantly,
these findings relating to (i) the autonomy and separateness of the
contractual frameworks, (ii) the absence of any common arbitration
agreement across respondents, and (iii) the impossibility of construing the
BSA as having been novated by the later consignment-based contracts,
are findings of jurisdictional fact. Once such jurisdictional facts have been
adjudicated by a competent court, they cannot be reopened in subsequent
proceedings between the same parties. The petitioner, having
unsuccessfully canvassed the very same assertions before the High
Court, is now barred by issue estoppel from reagitating those issues in a
slightly altered statutory setting. The doctrine applies with full force even
though the present proceeding is under Section 11 and the earlier one
was under Section 45, for the identity of the issue, namely the operative
agreement, the seat of arbitration, and the scope of the respective
arbitration clauses, remains the same.
25
36. This Court in Hope Plantations Ltd. v. Taluk Land Board Peermade
15
& Anr. has elaborated upon ‘issue estoppel’ by observing as under:
“26. It is settled law that the principles of estoppel and res judicata are
based on public policy and justice. Doctrine of res judicata is often
treated as a branch of the law of estoppel though these two doctrines
differ in some essential particulars. Rule of res judicata prevents the
parties to a judicial determination from litigating the same question
over again even though the determination may even be
demonstratedly wrong. When the proceedings have attained finality,
parties are bound by the judgment and are estopped from questioning
it. They cannot litigate again on the same cause of action nor can they
litigate any issue which was necessary for decision in the earlier
litigation. These two aspects are “cause of action estoppel” and “issue
estoppel”. These two terms are of common law origin. Again, once an
issue has been finally determined, parties cannot subsequently in the
same suit advance arguments or adduce further evidence directed to
showing that the issue was wrongly determined. Their only remedy is
to approach the higher forum if available. The determination of the
issue between the parties gives rise to, as noted above, an issue
estoppel. It operates in any subsequent proceedings in the same suit
in which the issue had been determined. It also operates in
subsequent suits between the same parties in which the same issue
arises. Section 11 of the Code of Civil Procedure contains provisions
of res judicata but these are not exhaustive of the general doctrine of
res judicata. Legal principles of estoppel and res judicata are equally
applicable in proceedings before administrative authorities as they are
based on public policy and justice.”
(emphasis supplied)
16
37. Further, in Anil v. Rajendra this Court noted that once there is
refusal to refer to arbitration under Section 8 of the Act, 1996, parties
thereafter cannot seek reference to arbitration under Section 11(6) as the
earlier refusal under Section 8 amounts to issue estoppel. It was observed
that;
“ 15 …….Thus, once the judicial authority takes a decision not to refer
the parties to arbitration, and the said decision having become final,
15
(1999) 5 SCC 590.
16
(2015) 2 SCC 583.
26
thereafter Section 11(6) route before the Chief Justice is not available
to either party.”
38. In the totality of circumstances, therefore, the findings of the High
Court of Delhi furnish a cogent and authoritative factual foundation against
which the present petition must be tested. When those findings are read
conjointly with the statutory framework under Sections 2(1)(f) and 2(2) of
the 1996 Act and the jurisprudence laid down in above referred judicial
pronouncements, the legal position becomes unequivocal: (i) the BSA
constitutes the mother agreement; (ii) the juridical seat of arbitration is
Benin; (iii) the governing and curial law is the law of Benin; (iv) Part I of
the Act stands excluded by operation of law; (v) Indian courts lack
jurisdiction to appoint an arbitrator for a foreign-seated arbitration; (vi)
after the commencement and during the subsistence of international
commercial arbitration at Benin, the petitioner filed the anti-arbitration
injunction suit, but failed to obtain any order or direction, (vii) in the
meanwhile, international commercial arbitral proceedings culminated in
the final award dated 21.05.2024, and finally (viii) the Delhi High Court
dismissed the anti-arbitration injunction suit considering the very same
issues raised herein and as such the petitioner will be estopped from
raising the same issues.
39. The petitioner’s endeavor to confer jurisdiction upon this Court by
invoking ancillary contracts of a different genus, executed with different
27
parties, and containing materially different arbitration clauses, is wholly
misconceived and contrary to the territorial principle that lies at the heart
of the 1996 Act. The petition, therefore, is not merely untenable, it is
foreclosed both in law and on account of estoppel arising from the
petitioner’s own prior litigation conduct.
40. Misplaced reliance on Group of Companies Doctrine : At this
juncture, we must also answer the argument raised by Mr. Devadatt
Kamat that under the group of companies doctrine, respondent nos. 2 and
3, though not signatories to the BSA, should nonetheless be made parties
for a composite arbitration. The group of companies doctrine, as
recognised in Indian law, is not an automatic talisman for impleading every
corporate entity of a group into arbitral proceedings. This Court in Cox &
Kings was at pains to emphasise that the doctrine is applied sparingly and
only where there is compelling evidence of mutual intention of all the
parties concerned to bind a non-signatory to an arbitration agreement.
Such intention may be inferred from direct participation in negotiation,
performance of contract, or from the role played in the overall transaction.
However, a mere overlap of shareholding, or the fact that entities belong
to the same corporate family, is not by itself sufficient. It was observed:
“ . Moreover, since the companies in a group have separate legal
93
personality, the presence of common shareholders or Directors
cannot lead to the conclusion that the subsidiary company will be
bound by the acts of the holding company. The statements or
representations made by promoters or Directors in their personal
28
capacity would not bind a company. Similarly, the mere fact that the
two companies have common shareholders or a common Board of
Directors will not constitute a sufficient ground to conclude that they
are a single economic entity….”
(emphasis supplied)
V. Conclusion and Decision:
41. Hence, the reliance placed by the petitioner on group of companies
doctrine is misplaced in light of the foregoing analysis.
42. For the reasons stated above, Arbitration Petition No. 65 of 2023
filed under Section 11(6) read with Section 11(12)(a) of the Act, 1996 is
hereby dismissed.
43. Parties shall bear their own costs.
………………………………....J.
[PAMIDIGHANTAM SRI NARASIMHA]
………………………………....J.
[ATUL S. CHANDURKAR]
NEW DELHI;
NOVEMBER 21, 2025
29
2025 INSC 1342
IN THE SUPREME COURT OF INDIA
CIVIL ORIGINAL JURISDICTION
ARBITRATION PETITION NO. 65 OF 2023
BALAJI STEEL TRADE ...PETITIONER (S)
VERSUS
FLUDOR BENIN S.A. & ORS. …RESPONDENT(S)
J U D G M E N T
1. For the sake of convenience and ready reference, this judgment
contains the following parts: -
Table of Contents
I. : .......................................................................................................... 2
Introduction
II. Facts : ..................................................................................................................... 3
(i) Buyer and Seller Agreement between Petitioner and Respondent No.1: ................... 4
(ii) Execution of Sales Contracts with Respondent No. 2 ................................................ 5
(iii) Execution of the Addendum ....................................................................................... 6
(iv) HSSAs executed between Petitioner and Respondent No. 3 ..................................... 6
(v) Respondent No.1’s invocation of Benin Arbitration ..................................................... 7
(vi) Petitioner’s institution of Anti-Arbitration Injunction Suit ............................................. 8
(vii) Filing of the Present Petition ...................................................................................... 9
Signature Not Verified
Digitally signed by
KAPIL TANDON
Date: 2025.11.21
18:32:07 IST
Reason:
(viii) Culmination of Benin Arbitration: ............................................................................... 9
1
III. Submissions : ....................................................................................................... 9
(i) Submissions on behalf of the Petitioner ................................................................. 9
(ii) Submissions on behalf of Respondent No. 1 ....................................................... 11
(iii) Submissions on behalf of Respondent No. 2 ....................................................... 13
(iv) Submissions on behalf of Respondent No. 3 ....................................................... 14
IV. Analysis : ............................................................................................................ 14
(i) Maintainability of the Section 11(6) Petition in International Commercial
Arbitration………………………………………………………………………………...15
(ii) Inapplicability of Arbitration Clauses in Sales Contracts and HSSAs to dispute
arising from BSA and Addendum ......................................................................... 17
(iii) No novation or supersession of BSA by Sales Contracts and HSSAs .................. 18
(iv) Initiation and Culmination of Benin Arbitration: ..................................................... 21
(v) Dismissal of Anti-Arbitration Injunction by High Court of Delhi ............................. 22
(vi) Findings of High Court of Delhi as ‘Issue Estoppel’ .............................................. 25
(vii) Misplaced reliance on Group of Companies Doctrine .......................................... 28
V. Conclusion and Decision : ................................................................................. 29
I. Introduction:
2. The Arbitration Petition under Section 11 of the Arbitration and
1
Conciliation Act, 1996 is an attempt by the petitioner to anchor an
international commercial arbitration, arising out of Buyer and Seller
Agreement (BSA), and its Addendum which is governed by laws of
Republic of Benin, into the domestic framework of the Act, 1996 by placing
reliance on dispute resolution clauses contained in subsequent
contractual arrangements, namely Sales Contracts executed with
respondent no. 2 and High Seas Sales Contracts (HSSAs) executed with
1
Hereinafter, “Act, 1996”.
2
respondent no. 3. The prayer is for constitution of an Arbitral Tribunal and
a composite reference of the alleged disputes including within the
embrace the three respondents as its parties by invoking the group of
companies doctrine. We have considered issue of jurisdiction, concluded
decision between the parties, and also the propriety of the present petition
and dismissed the petition. We have held that as the primary contract
(BSA) incorporates (i) international commercial arbitration, question of
application of Section 11 contained in Part I does not arise, (ii) BSA with
respondent no. 1 is the “mother agreement’' to which respondents no. 2
and 3 are aliens, (iii) the petitioner is barred by issue estoppel arising
owing to dismissal of anti-arbitration injunction suit and also that, (iv) there
is no compositeness of the transaction so as to attract group of companies
doctrine.
II. Facts:
3. The petitioner, Balaji Steel Trade, has approached this Court under
Section 11(6) read with Section 11(12)(a) of the Act 1996 praying for
appointment of sole arbitrator to adjudicate and decide upon dispute that
has arisen between the parties owing to the alleged breach of Buyer and
Seller Agreement (hereinafter, “BSA”) dated 06.06.2019 executed
between the present petitioner and respondent no.1, Fludor Benin S.A.
Petitioner prays for a composite reference to arbitration by seeking the
3
inclusion of respondent no. 2, M/s Vink Corporations DMCC, a company
incorporated in Dubai, UAE, and respondent no. 3, Tropical Industries
International Pvt. Ltd., a private limited company registered in New Delhi,
India. As per the petitioner, all three respondents are owned and controlled
by Tropical General Investments Ltd. Group (“TGI Group”) whereby TGI
Group holds 100% shares in respondent no.1, 51% shares in respondent
no. 2 and 99.73% shares in respondent no.3.
4. Buyer and Seller Agreement between Petitioner and Respondent
No.1: The petitioner, Balaji Steel Trade, is a partnership firm engaged in
the business of steel trading as well as in the trade of various agricultural
commodities. Respondent No. 1, Fludor Benin S.A., is a private limited
company incorporated under the laws of Republic of Benin, a country in
West Africa. According to the petitioner, in the year 2018, respondent no.
1 made representations to the petitioner with respect to the supply of
cotton seeds. Consequent thereto, both parties entered into negotiations
with a view to explore a business arrangement for the manufacture and
sale of cottonseed cakes.
5. In furtherance of the aforesaid discussions, the parties executed a
Collaboration and Buy Back Agreement (“Collaboration Agreement”)
dated 10.12.2018. Under the said agreement, the petitioner undertook to
provide the requisite machinery and establish a manufacturing unit at
4
Bohicon, a city in Benin, for the manufacture of cottonseed cake.
Respondent no. 1, on its part, assumed the obligation to manufacture the
2
said product and supply it to the petitioner in India. Clause 20 of the
Collaboration Agreement contained an arbitration provision stipulating
that disputes thereunder would be referred to arbitration before CAMEC-
3
CCIB in Benin.
6. Subsequently, and in supersession of the Collaboration Agreement,
the petitioner and respondent no. 1 entered into a Buyer-Seller Agreement
(“BSA”) dated 06.06.2019, for a term of five years, governing the supply
and sale of the product. The said BSA also incorporated an arbitration
clause this time providing for ad hoc arbitration to be conducted in Benin.
Article 11 of the BSA incorporating arbitration agreement is as follows:
“ 11. Arbitration: All the disputes will be resolved by discussions and
if Arbitration becomes only option then it will take place in Benin and
decision will be binding on both the parties and Arbitration fee will be
borne by the losing party.”
7. Execution of Sales Contracts with Respondent No. 2: After having
executed the BSA, on 17.10.2019 respondent no. 1 assigned its obligation
for supply of product to respondent no. 2, M/s. Vink Corporations DMCC.
In order to give effect to the said assignment and to facilitate supply of the
2
20. Arbitration: All the disputes shall be settled amicably and if arbitration becomes the sole option
to settle a crises, it shall take place in Benin before CAMEC-CCIB and the decision shall be binding on
both parties. The arbitration costs shall be borne by the losing party.
3
“Centre d’Arbitrage, de Médiation et de Conciliation de la Chambre de Commerce et d’Industrie du
Bénin”
5
product, the petitioner and respondent no. 2 entered into a series of Sales
Contracts providing for reference of dispute to sole arbitrator in
accordance with the Act, 1996, with the place of arbitration at New Delhi.
The relevant portion of the dispute resolution clause is as follows:
“ Dispute Resolution: Any dispute arising out of or relating to this
agreement, including any question regarding its existence, validity, or
termination, which cannot be amicably resolved by the Parties, shall
be settled before a sole arbitrator in accordance with the Indian
Arbitration and Conciliation Act, 1996. The sole arbitrator shall be
appointed mutually by the parties. In the event the Parties fail to agree
on a sole arbitrator within Thirty (30) days from the date of notice of
arbitration, then appointment of such sole arbitrator shall take place
as per the provisions of the Indian Arbitration and Conciliation Act,
1996. The place of arbitration should be New Delhi and language shall
be English. The resulting arbitral award shall be final and binding
without right of appeal, and judgment upon such award may be
entered in any court having jurisdiction thereof. A dispute shall be
deemed to have been arisen when either Party notifies the other Party
in writing to that effect.”
8. Execution of the Addendum: The terms of BSA were modified on
09.01.2021 by signing an Addendum, terms of which eliminated
petitioner’s exclusive rights of purchase of the product thereby allowing
respondent no. 1 to sell the product to third parties also. The petitioner
contends that, following the execution of the Addendum, there was a
shortfall in the quantity of the product supplied to it.
9. HSSAs executed between Petitioner and Respondent No. 3: In
order to address the said shortfall, respondent no. 3, Tropical Industries
International Pvt. Ltd., was introduced to the petitioner. Consequent
thereto, the petitioner and respondent no. 3 entered into a series of High
6
Sea Sale Contracts (“HSSA”), which, inter alia, delineated the respective
rights and obligations of respondent no. 3 as the seller and the petitioner
as the purchaser of the product. Said HSSAs also contained arbitration
clause providing that:
“g) Dispute if any, between the parties arising in relation to this
agreement of HIGH SEAS SALE shall be referred to the arbitration
under the Indian Arbitration Act 1940. In witness whereof, the parties
have said and subscribe their hands at DELHI, INDIA, the day and
year first hereinabove written.”
10. Disputes arose between the parties with respect to quantity of
supply and payments inter-se which led to petitioner serving a notice
dated 15.07.2022 served on all party respondents. Respondent nos. 2 and
3 replied to said notice shrugging their responsibility on the ground of lack
of privity and separateness from respondent no. 1. Petitioner then issued
termination notice dated 06.09.2022 under which BSA and the Addendum
were terminated.
11 . Respondent No.1’s invocation of Benin Arbitration: Things took a
turn when the petitioner received a notice from Chamber of Commerce,
Benin - CAMEC dated 12.04.2023 apprising the petitioner that respondent
no. 1 has requested for settlement of disputes by arbitration in terms of
the BSA before it in Benin and called upon the petitioner to nominate its
arbitrator. Petitioner refuted to the said arbitration by sending its objections
vide letter dated 15.05.2023. Thereafter, respondent no.1 on 31.05.2023
sent notice invoking arbitration under the laws of Benin to the petitioner to
7
which the petitioner replied on 30.06.2023 denying the contents of the
notice and resisting to Benin as seat of arbitration. Further objection of the
petitioner was with regard to the non-joinder of respondent no. 2 and
respondent no. 3, who were, as per petitioner, proper and necessary
parties.
12. Instead of submitting to the Benin arbitration, the petitioner issued
its own notice invoking arbitration to all the three respondents purportedly
in terms of Section 21 of the Act, 1996 referring the disputes arising out of
the BSA, Sales Contract and HSSAs to arbitration and proposed the name
of sole arbitrator. Respondent no. 1 however continued to proceed with
Benin arbitration and filed an application before the Commercial Court of
Cotonou, Benin (“Benin Court”) seeking appointment of arbitrator which
was allowed on 26.07.2023, whereby the Benin Court appointed one Dr.
Gilbert Ahouandjinou as the sole arbitrator for determination of disputes
between the petitioner and respondent no. 1.
13. Petitioner’s institution of Anti-Arbitration Injunction Suit: Petitioner
however proceeded to institute Anti-Arbitration Injunction Suit (CS
(Comm) No. 544 of 2023) before the High Court of Delhi on 10.08.2023,
inter alia praying for a decree of permanent injunction restraining the
respondent no. 1 from proceeding/continuing with the Benin Arbitration.
8
14. Filing of the Present Petition: Pending disposal of anti-arbitration
injunction suit, more or less around the same time, petitioner on
23.08.2023 filed the present application under Section 11(6) read with
Section 11(12)(a) of the Act, 1996 for appointment of sole arbitrator for
adjudication of the disputes.
15. Culmination of Benin Arbitration: Pending disposal of the anti-
arbitration injunction suit, and the application under Section 11(6) of the
Act, 1996 for constitution of arbitral tribunal before this Court, the ad hoc
arbitration in Benin got concluded and the sole arbitrator rendered its
award on 21.05.2024.
16. Further fact having a bearing on the present proceeding is the
dismissal of the anti-arbitration injunction suit (Comm) No. 544 of 2023 by
High Court of Delhi on 08.11.2024.
III. Submissions:
17. Submissions on behalf of the Petitioner Mr. Devadatt Kamat, senior
:
counsel assisted by Ms. Shruti Sabharwal, Mr. Nishant Doshi and others,
appearing on behalf of the petitioner has made the following submissions:
(i) Disputes against all respondents arise from a composite transaction,
as the series of agreements are interlinked and founded on a common
commercial objective under the TGI Group. Respondents nos. 2 and 3
9
supplied goods on the instructions of respondent no. 1, thereby
performing obligations under the BSA by conduct. This, coupled with
contemporaneous correspondence and the common legal notice dated
15.07.2022 issued to all respondents, shows that the disputes are
inseparable and require a composite reference under the group of
4
company doctrine .
(ii) The dispute resolution clause in the BSA stands novated by the
arbitration clauses contained in the subsequent Sales Contracts and
HSSAs executed with respondent nos. 2 and 3. Reference in this regard
has been made to Sales Contract between the petitioner and respondent
no. 2, the arbitration clause of which is framed as, “ appointment of such
sole arbitrator shall take place as per the provisions of the Indian
Arbitration and Conciliation Act, 1996 ”.
(iii) Alternatively, even if the BSA clause is given effect, it is submitted that
Benin was indicated only as the venue, not the juridical seat, since Article
11 merely states that arbitration “ will take place in Benin .” In contrast, the
later contracts evince a clear intention to adopt Indian law as the
governing law of arbitration. Relying on Mankastu Impex Pvt. Ltd. v.
5
Airvisual Ltd. , it is argued that the seat must be inferred from the parties’
4
Cox & Kings Ltd. v. SAP India (P) Ltd., 2023 SCC OnLine SC 1634. (hereinafter, Cox & Kings )
5
(2020) 5 SCC 399. (hereinafter, Mankastu Impex)
10
conduct and the governing law, which unmistakably points to India as the
seat.
(iv) Arbitral proceedings in Benin and the consequent award are non-est
in law, having been unilaterally invoked by respondent no. 1 to pre-empt
petitioner’s claims under Indian law. Benin is not a reciprocating territory
6
under Section 44(b) of the Act, 1996, and any award rendered there
would be unenforceable in India.
(v) Lastly, it is argued that the Delhi High Court’s findings in the anti-
arbitration injunction suit have no bearing on these proceedings, as the
inquiry under Section 45 (before the High Court) and Section 11 (before
this Court) operate in distinct spheres. The limited scrutiny is only to
enquire about the existence of a valid arbitration agreement, and all other
questions can be raised and contested before the arbitral tribunal itself.
18. Submissions on behalf of Respondent No. 1: Mr. Nakul Dewan,
senior counsel, assisted by Mr. Susshil Daga, Mr. Pallav Mongia and
others made the following submissions opposing the maintainability of the
petition. He would strongly urge for dismissal of the present petition on the
ground that it is abuse of process for the following reasons:
6
Section 44. Definition -…
(a) …
(b) in one of such territories as the Central Government, being satisfied that reciprocal provisions have
been made may, by notification in the Official Gazette, declare to be territories to which the said
Convention applies.
11
(i) It is urged that Part I of the Act, 1996, including Section 11, has no
application since the dispute arises solely under the BSA, which expressly
stipulates that arbitration “ shall take place in Benin ” and that the governing
law shall be the laws of Benin (Article 5 of the Addendum). Hence, the
arbitration under BSA is international commercial arbitration, governed by
the Benin Arbitration Act.
(ii) The legal notice issued by the petitioner on 15.07.2022 virtually seeks
specific performance of the BSA on the ground that the respondent has
breached the agreement by not supplying the contracted quantity of
goods. On the other hand, his client invoked arbitration on 31.05.2023
under the BSA, on the ground that the petitioner had defaulted in
accepting delivery, resulting in losses. Under these circumstances, the
dispute arises out of rights and obligations under BSA, for which the
7
governing law is that of Republic of Benin, the Benin Arbitration Act being
the curial law.
(iii) Respondent no. 1 is not bound by the arbitration clauses in the Sales
Contracts or HSSAs, which were executed independently between the
petitioner and respondent nos. 2 and 3 as the BSA neither refers nor
incorporates these subsequent contracts. The principles of group of
7
Uniform Act on Arbitration of the Organisation for the Harmonisation of Business Law in Africa
(OHADA).
12
companies doctrine as laid down in Cox & Kings , has no application to the
facts of the present case.
8
(iv) Placing reliance on Balasore Alloys Ltd. v. Medima LLC , respondent
no. 1 argues that the BSA is the principal or “mother” agreement, and
therefore its arbitration clause prevails over those in any ancillary or
subsequent contracts. Having consciously accepted Benin as the seat of
arbitration, the petitioner cannot now resile from its contractual
commitment or seek parallel proceedings in India.
(v) Lastly, the contention that the BSA stood novated or assigned through
the Sales Contracts and HSSAs is denied. Even if such assignment were
assumed, respondent nos. 2 and 3 would merely step into respondent 1’s
contractual position, leaving no ground for a separate or parallel
arbitration. In any event, all such issues fall within the jurisdiction of the
arbitral tribunal constituted under the BSA. The respondents further rely
on the Delhi High Court’s findings in the petitioner’s anti-arbitration
injunction suit, which, having attained finality, bar re-litigation of identical
issues.
19. Submissions on behalf of Respondent No. 2: Ld. Counsel for
respondent no. 2, M/s. Vink Corporations DMCC, submitted that the
multiple Sales Contracts that they have entered into with the petitioner
8
(2020) 9 SCC 136.
13
were standalone limited term contracts concluding with the delivery of the
goods. The arbitration clause is limited to, “ any dispute arising out of or
relating to this Agreement ”.
20. Submissions on behalf of Respondent No. 3: Similarly, Ld. Counsel
for respondent no. 3 submits that it and petitioner entered into four HSSAs
for delivering a specified quantity of the products detailed in each HSSAs.
The arbitration clause in each HSSA provided that “ Dispute if any,
between the parties arising in relation to this agreement of HIGH SEAS
SALE shall be referred to the arbitration under the Indian Arbitration Act
1940 ”. Hence, the said clause was limited to disputes arising out of the
specific HSSA between the petitioner and respondent no. 3.
21. Thus, respondent nos. 2 and 3 have submitted that no dispute has
arisen with respect to Sales Contracts or the HSSAs and that the disputes
raised by the petitioner are limited to BSA and the Addendum, with respect
to which they are aliens.
IV. Analysis:
22. At the outset, it is to be noted that the present application has been
filed under Section 11(6) read with Section 11(12)(a) of the Arbitration and
Conciliation Act, 1996 seeking appointment of a sole arbitrator for a
composite reference of disputes arising out of the (i) BSA, (ii) the Sales
Contracts, and (iii) the HSSAs. At this stage, the Court is required to advert
14
to the foundational question of whether there exists a valid and
enforceable arbitration agreement between the parties, which can form
9
the basis of an arbitral reference. Equally material is the principle that the
Court at this stage does not engage in a roving enquiry into merits but
10
confines itself to the existence and validity of an arbitration agreement.
23. Maintainability of the Section 11(6) Petition in International
Commercial Arbitration: However, before touching upon the merits of the
matter, we must first concern ourselves with the seminal question whether
the present petition is proper in the sense that whether this Court, in
exercise of jurisdiction under Section 11(6) read with Section 11(12)(a) of
the 1996 Act, can at all entertain a request for appointment of an arbitrator
in respect of a dispute which, as contended by respondent, is an
international commercial arbitration. This issue assumes foundational
importance because, if Part I of the 1996 Act stands excluded by virtue of
the parties’ choice of the seat of arbitration and the governing law, the
jurisdiction of this Court to entertain the application is ousted at the
threshold.
24. Section 2(1)(f) of the Act, 1996 defines ‘international commercial
arbitration’ as arbitration relating to disputes arising out of legal
9
SBI General Insurance Co. Ltd. v. Krish Spinning, 2024 SCC OnLine SC 1754.
10
Interplay between Arbitration Agreements under Arbitration and Conciliation Act, 1996 and Stamp Act,
1899, In Re, (2024) 6 SCC 1.
15
relationships, whether contractual or not, considered as commercial under
the law in force in India and where at least one of the parties is a foreign
national, whether that party is an individual, a body corporate, an
association or body of individuals or a foreign Government. Respondent
no. 1 being a company incorporated under the laws of Benin, the present
dispute squarely falls within the ambit of international commercial
arbitration. Once this characterisation is made, Section 2(2) of the Act
becomes immediately relevant, for it stipulates that Part I shall apply only
where the place of arbitration is in India, thereby mandating that Part I
stands excluded where the parties have chosen a foreign seat. This Court
has consistently held, beginning with Bharat Aluminium Co. v. Kaiser
11
Aluminium Technical Services Inc. (BALCO) , that Part I of the 1996 Act
has no application to arbitrations seated outside India. The seat has a
juridical significance in arbitration law: it determines the courts that
exercise supervisory jurisdiction over the arbitral proceedings.
25. Respondent no. 1 has urged that Part I, including Section 11 is not
applicable to the BSA dated 06.06.2019. At the threshold, it is common
ground that the relationship between the petitioner and respondent no. 1
was crystallised in the BSA and its Addendum dated 09.01.2021. These
agreements constitute the principal arrangements between the two
11
(2012) 9 SCC 552.
16
contracting entities. The arbitration clause contained in Article 11 of the
BSA explicitly provides that in the event of disputes, arbitration shall “ take
place in Benin ,” while Article 5 of the Addendum makes it further explicit
that the BSA shall be “ construed, governed and interpreted in accordance
with the laws of Benin .” In Mankastu (supra), this Court emphasised that
the seat of arbitration is to be ascertained from the intention of the parties
as gathered from the agreement as a whole. Further, in BGS SGS SOMA
12
JV v. NHPC Ltd. this Court observed that;
“ It will thus be seen that wherever there is an express designation
61.
of a “venue”, and no designation of any alternative place as the “seat”,
combined with a supranational body of rules governing the arbitration,
and no other significant contrary indicia, the inexorable conclusion is
that the stated venue is actually the juridical seat of the arbitral
proceeding. ”
26. Article 11 of BSA read with Article 5 of the Addendum unequivocally
shows that the parties not only indicated the geographical location of
arbitration but also selected the governing law. The dual indications
together leave little scope for doubt that Benin was intended to be the
juridical seat with laws of Benin as the curial law.
27. Inapplicability of Arbitration Clauses in Sales Contracts and HSSAs
to dispute arising from BSA and Addendum : The petitioner has sought to
place reliance on arbitration clauses contained in Sales Contracts and
HSSAs to argue that it was the intention of the parties to arbitrate in India.
12
(2020) 4 SCC 234.
17
Petitioner argued that mere mention in BSA that arbitration shall take
place in Benin does not by itself make Benin the juridical seat especially
in light of contrary indica in terms of arbitration clauses in Sales Contracts
and HSSAs. To buttress this proposition, petitioner further argued that
BSA stood novated or superseded by the Sales Contracts and HSSAs
which provide for arbitration in India. This argument is equally
unmeritorious. It is well settled that novation of a contract must be
established by clear and unequivocal intention of the parties to substitute
the earlier agreement with a new one. The BSA dated 06.06.2019
constituted the principal or “mother” contract between the petitioner and
respondent no. 1, defining their long-term commercial relationship,
specifying supply obligations, pricing structure, risk allocation, and a self-
contained dispute resolution clause providing for arbitration “to take place
in Benin” under Benin law.
28. No novation or supersession of BSA by Sales Contracts and
HSSAs: By contrast, the Sales Contracts executed between the petitioner
and respondent no. 2, and the HSSAs executed with respondent no. 3,
were subsequent, limited-purpose instruments. They were entered into
only to facilitate execution of individual shipments once respondent no. 1
assigned part of its performance to other group entities. Each Sales
Contract and HSSA were confined to a specific consignment or
18
transaction, contained its own commercial terms such as quantity, price
and delivery schedule, and had separate arbitration clauses, one referring
disputes to arbitration under the Act, 1996 (for Sales Contracts) and the
other under the Indian Arbitration Act, 1940 (for HSSAs). None of these
contracts incorporate or refer to the BSA or its arbitration clause, nor did
they expressly substitute, novate, or supersede the BSA. Their scope
ended upon completion of delivery and payment under the respective
consignment.
29. The absence of cross-references or language of substitution makes
13
it impossible to infer novation under Section 62 of the Indian Contract
Act, 1872. The BSA continued to subsist independently and governed the
broader supply arrangement, while the Sales Contracts and HSSAs
merely operated as implementing or ancillary arrangements for discrete
transactions. As this Court observed in Balasore Alloys Ltd. , where
several contracts coexist, the arbitration clause of the mother agreement
governs the dispute unless a later contract unequivocally replaces it. The
petitioner has shown no such intention of substitution. Consequently, any
alleged default by respondent no. 1, such as short-supply or failure to
deliver contracted quantities, emanates from obligations under the BSA,
13
Section 62. Effect of novation, rescission, and alteration of contract : If the parties to a contract
agree to substitute a new contract for it, or to rescind or alter it, the original contract, need not be
performed.
19
not from the Sales Contracts or HSSAs, which stand concluded.
Therefore, the arbitration agreements in the Sales Contracts or HSSAs
cannot displace or override the arbitration clause in the BSA, and disputes
rooted in the BSA must be resolved exclusively through the arbitration
agreed therein, namely, arbitration seated in Benin and governed by Benin
law. Owing to the separateness of the three contractual instruments, it
cannot be said that there were any contrary indica in BSA in respect of
any other law.
30. In view of the aforesaid discussion, both the legal position and the
factual matrix converge to a single, inescapable conclusion. The very
nature of the present dispute is that of an “international commercial
arbitration” as defined under Section 2(1)(f) of the 1996 Act, respondent
no. 1 being a corporation incorporated under the laws of Benin. This
statutory characterisation necessarily triggers the application of Part II of
the 1996 Act when the arbitration is foreign-seated, and not Part I. Section
2(2) makes the position explicit by providing that Part I applies only where
the place of arbitration is in India; consequently, recourse to Section 11,
located within Part I, is available solely in respect of India-seated
arbitrations. As this Court explained in BALCO , reaffirmed in Mankastu ,
BGS SGS SOMA JV , and emphatically reiterated in PASL Wind
20
14
Solutions , Indian Courts have no jurisdiction to appoint an arbitrator for
a foreign-seated arbitration, irrespective of the nationality or domicile of
the parties. On the facts as well, the BSA and its Addendum constitute the
mother agreement, containing a clear and deliberate choice of Benin as
the juridical seat of arbitration and Benin law as the governing and curial
law. The subsequent Sales Contracts and HSSAs are merely ancillary,
facilitating performance of isolated shipments, and cannot override the
dispute resolution framework of the BSA. Thus, both in principle and in
the factual circumstances of the case, the arbitration agreement in the
BSA prevails. The disputes raised by the petitioner arise squarely from the
BSA, and the parties’ chosen forum for their adjudication is arbitration in
Benin. Accordingly, the invocation of Part I and the present request under
Section 11(6) of the 1996 Act is fundamentally misconceived, legally
untenable, and contrary to the statutory scheme as well as the autonomy
of the parties’ contractual design.
31. Initiation and Culmination of Benin Arbitration: It is significant to
note, even prior to the institution of the present proceedings, respondent
no. 1 had already invoked arbitration in terms of Article 11 of the BSA in
Benin. As already indicated, the Benin Commercial Court, vide order
dated 26.07.2023, appointed a sole arbitrator, Dr. Gilbert Ahouandjinou,
14
PASL Wind Solutions Pvt. Ltd. v. GE Power Conversion India Pvt. Ltd, 2021 SCC OnLine SC 331.
21
in exercise of powers available under the Benin Arbitration Act, thereby
constituting a tribunal under the parties’ chosen curial law. The arbitral
tribunal, after considering the objections, ruled affirmatively on its own
jurisdiction in accordance with the doctrine of kompetenz–kompetenz and
proceeded to adjudicate the substantive disputes arising out of the BSA.
32. The Benin-seated arbitral tribunal thereafter rendered a final and
reasoned award dated 21.05.2024. The consequence of this development
is twofold. First, the arbitral process agreed to by the parties in the BSA
has already culminated in an adjudication on the very disputes which the
petitioner now seeks to re-agitate through the present Section 11
proceedings. Second, once the tribunal has asserted and exercised its
jurisdiction and delivered a final award, the petitioner cannot seek to
initiate a parallel arbitral process in India in respect of the same subject
matter. Allowing such an endeavor would be wholly antithetical to the
principles of finality of arbitral proceedings, undermine the doctrine of
kompetenz–kompetenz, and would defeat the territorial principle that the
courts of the seat (Benin) exercise supervisory jurisdiction over the
arbitration.
33 . Dismissal of Anti-Arbitration Injunction by High Court of Delhi :
Another consideration which cannot be lost sight of is that petitioner’s
attempt to resist the Benin arbitration before the Delhi High Court failed in
22
light of the judgment dated 08.11.2024 whereby the High Court allowed
respondent no. 1’s application under Section 45 and dismissed the anti-
arbitration injunction suit filed by the petitioner. Although proceedings
under Section 45 of the 1996 Act are distinct in scope from an application
under Section 11, the reasoning adopted by the High Court, particularly
its interpretation of the BSA, the Addendum, and the inter-relationship of
the subsequent Sales Contracts and HSSAs, bears directly upon the
factual architecture that underlies the present petition. The High Court,
after a detailed examination of the contractual framework, arrived at a
categorical finding that the BSA and its Addendum form the principal and
operative contractual matrix between the petitioner and respondent no. 1,
and that the arbitration clause contained therein represents the parties’
deliberate and binding choice of dispute resolution. It held that the Sales
Contracts and HSSAs, being independent and self-contained
arrangements with respondent nos. 2 and 3 respectively, do not, and
cannot, supersede, modify, or dilute the arbitration agreement in the BSA,
nor do they create a composite dispute capable of attracting a unified
arbitral mechanism under Indian law. To this effect, it was observed:
Defendant No. 1 is not a party to either the Sales Contracts or
“ 52.
HSSAs. Thus, there is no question of it being bound by the arbitration
clause contained in the Sales Contracts and/or HSSAs. It is an
admitted fact that Plaintiff and Defendant No. 1 signed the BSA and
Addendum. If Defendant No. 1 assigned its obligation to Defendant
No. 2 & 3 and Plaintiff agreed to the same, it would result in Defendant
No. 2 & 3 stepping into the shoes of Defendant No. 1 for the purposes
of the BSA and addendum. Defendants No. 2 & 3 would then be bound
23
by the BSA and Addendum, including Article 11 and Article 5,
respectively, but it cannot be vice-versa. Hence, Articles 11 and article
5 would continue to remain the binding arbitration agreement between
the parties. The arbitration clause/Article 11 of BSA and Article 5 of
the Addendum reads as under:
…….
After pursuing the arbitration clauses of BSA and Addendum, it is clear
that the plaintiff and defendant no. 1 had, out of their own will, choose
the preferred place of arbitration to be in Benin. Therefore, Arbitration
would be the method of resolving any disagreement that might
emerge between the parties to the BSA and addendum. Therefore, it
is clear that the agreements entered into between defendants no 2 &
3 and the plaintiff are separate from the BSA and addendum.
The supplementary obligation, as stated by the plaintiff, would be
53.
limited to the consignment identified in the Sales Contracts or HSSAs.
The sales contracts and HSSAs were entered for the supply of the
product on behalf of defendants no 2 & 3. Neither is there a mention
of any article/clause that states that the sales contracts and HSSAs
are just an addition to the BSA, nor any clause that states that
addendum and parties to BSA and addendum would be governed by
the clauses of sales contracts and HSSAs. Defendants No. 2 & 3 are
individual companies. Therefore, the contracts or agreements entered
into between Defendants no 2 & 3 and the plaintiff containing an
arbitration clause with the place of arbitration in India will be
enforceable separately.”
34. The findings and conclusions have been summed up by the High
Court in paragraph 60 in the following manner:
“ 60. This court finds that the BSA, Addendum, and Sales contracts,
along with HSSAs are distinct contracts having different parties,
differing scope of work and different arbitration clauses. Merely stating
that the defendant no 2 & 3 are the companies which are run by the
defendant no.1 is not sufficient. Defendants No. 1 and the plaintiff
have entered into the BSA and Addendum as individual entities
therefore, any dispute that arises out of these agreements will be
resolved as per the dispute resolution mechanism provided in the
articles of these agreements, i.e., as per article 11 of BSA and article
5 of Addendum. The Initiation of arbitration proceedings under
CAMEC in April 2023 and issuance of the Fludor NOA, demonstrate
that the Plaintiff‟s concerns stem from the BSA read with the
Addendum as the cause of action of the present Suit is all rooted in
the BSA and the Addendum. Therefore, disputes, if any, are to be
adjudicated as per the Parties’ chosen adjudicatory forum, i.e., under
Article 11 of the BSA and the arbitration clause provided under Article
24
11 of the BSA. Clearly Plaintiff has never questioned the validity of
BSA and Addendum, which means that the Agreements are not null,
void, inoperative or incapable of being performed.
”
(emphasis supplied)
In terms of the above, the High Court of Delhi allowed respondent no. 1’s
application under Section 45 and dismissed the suit filed by the petitioner.
35. Findings of High Court of Delhi as ‘Issue Estoppel’ : Importantly,
these findings relating to (i) the autonomy and separateness of the
contractual frameworks, (ii) the absence of any common arbitration
agreement across respondents, and (iii) the impossibility of construing the
BSA as having been novated by the later consignment-based contracts,
are findings of jurisdictional fact. Once such jurisdictional facts have been
adjudicated by a competent court, they cannot be reopened in subsequent
proceedings between the same parties. The petitioner, having
unsuccessfully canvassed the very same assertions before the High
Court, is now barred by issue estoppel from reagitating those issues in a
slightly altered statutory setting. The doctrine applies with full force even
though the present proceeding is under Section 11 and the earlier one
was under Section 45, for the identity of the issue, namely the operative
agreement, the seat of arbitration, and the scope of the respective
arbitration clauses, remains the same.
25
36. This Court in Hope Plantations Ltd. v. Taluk Land Board Peermade
15
& Anr. has elaborated upon ‘issue estoppel’ by observing as under:
“26. It is settled law that the principles of estoppel and res judicata are
based on public policy and justice. Doctrine of res judicata is often
treated as a branch of the law of estoppel though these two doctrines
differ in some essential particulars. Rule of res judicata prevents the
parties to a judicial determination from litigating the same question
over again even though the determination may even be
demonstratedly wrong. When the proceedings have attained finality,
parties are bound by the judgment and are estopped from questioning
it. They cannot litigate again on the same cause of action nor can they
litigate any issue which was necessary for decision in the earlier
litigation. These two aspects are “cause of action estoppel” and “issue
estoppel”. These two terms are of common law origin. Again, once an
issue has been finally determined, parties cannot subsequently in the
same suit advance arguments or adduce further evidence directed to
showing that the issue was wrongly determined. Their only remedy is
to approach the higher forum if available. The determination of the
issue between the parties gives rise to, as noted above, an issue
estoppel. It operates in any subsequent proceedings in the same suit
in which the issue had been determined. It also operates in
subsequent suits between the same parties in which the same issue
arises. Section 11 of the Code of Civil Procedure contains provisions
of res judicata but these are not exhaustive of the general doctrine of
res judicata. Legal principles of estoppel and res judicata are equally
applicable in proceedings before administrative authorities as they are
based on public policy and justice.”
(emphasis supplied)
16
37. Further, in Anil v. Rajendra this Court noted that once there is
refusal to refer to arbitration under Section 8 of the Act, 1996, parties
thereafter cannot seek reference to arbitration under Section 11(6) as the
earlier refusal under Section 8 amounts to issue estoppel. It was observed
that;
“ 15 …….Thus, once the judicial authority takes a decision not to refer
the parties to arbitration, and the said decision having become final,
15
(1999) 5 SCC 590.
16
(2015) 2 SCC 583.
26
thereafter Section 11(6) route before the Chief Justice is not available
to either party.”
38. In the totality of circumstances, therefore, the findings of the High
Court of Delhi furnish a cogent and authoritative factual foundation against
which the present petition must be tested. When those findings are read
conjointly with the statutory framework under Sections 2(1)(f) and 2(2) of
the 1996 Act and the jurisprudence laid down in above referred judicial
pronouncements, the legal position becomes unequivocal: (i) the BSA
constitutes the mother agreement; (ii) the juridical seat of arbitration is
Benin; (iii) the governing and curial law is the law of Benin; (iv) Part I of
the Act stands excluded by operation of law; (v) Indian courts lack
jurisdiction to appoint an arbitrator for a foreign-seated arbitration; (vi)
after the commencement and during the subsistence of international
commercial arbitration at Benin, the petitioner filed the anti-arbitration
injunction suit, but failed to obtain any order or direction, (vii) in the
meanwhile, international commercial arbitral proceedings culminated in
the final award dated 21.05.2024, and finally (viii) the Delhi High Court
dismissed the anti-arbitration injunction suit considering the very same
issues raised herein and as such the petitioner will be estopped from
raising the same issues.
39. The petitioner’s endeavor to confer jurisdiction upon this Court by
invoking ancillary contracts of a different genus, executed with different
27
parties, and containing materially different arbitration clauses, is wholly
misconceived and contrary to the territorial principle that lies at the heart
of the 1996 Act. The petition, therefore, is not merely untenable, it is
foreclosed both in law and on account of estoppel arising from the
petitioner’s own prior litigation conduct.
40. Misplaced reliance on Group of Companies Doctrine : At this
juncture, we must also answer the argument raised by Mr. Devadatt
Kamat that under the group of companies doctrine, respondent nos. 2 and
3, though not signatories to the BSA, should nonetheless be made parties
for a composite arbitration. The group of companies doctrine, as
recognised in Indian law, is not an automatic talisman for impleading every
corporate entity of a group into arbitral proceedings. This Court in Cox &
Kings was at pains to emphasise that the doctrine is applied sparingly and
only where there is compelling evidence of mutual intention of all the
parties concerned to bind a non-signatory to an arbitration agreement.
Such intention may be inferred from direct participation in negotiation,
performance of contract, or from the role played in the overall transaction.
However, a mere overlap of shareholding, or the fact that entities belong
to the same corporate family, is not by itself sufficient. It was observed:
“ . Moreover, since the companies in a group have separate legal
93
personality, the presence of common shareholders or Directors
cannot lead to the conclusion that the subsidiary company will be
bound by the acts of the holding company. The statements or
representations made by promoters or Directors in their personal
28
capacity would not bind a company. Similarly, the mere fact that the
two companies have common shareholders or a common Board of
Directors will not constitute a sufficient ground to conclude that they
are a single economic entity….”
(emphasis supplied)
V. Conclusion and Decision:
41. Hence, the reliance placed by the petitioner on group of companies
doctrine is misplaced in light of the foregoing analysis.
42. For the reasons stated above, Arbitration Petition No. 65 of 2023
filed under Section 11(6) read with Section 11(12)(a) of the Act, 1996 is
hereby dismissed.
43. Parties shall bear their own costs.
………………………………....J.
[PAMIDIGHANTAM SRI NARASIMHA]
………………………………....J.
[ATUL S. CHANDURKAR]
NEW DELHI;
NOVEMBER 21, 2025
29