COX AND KINGS LTD. vs. SAP INDIA PVT. LTD.

REPORTABLE I N   THE  S UPREME  C OURT   OF  I NDIA   C IVIL  O RIGINAL  J URISDICTION     A RBITRATION  P ETITION  (C IVIL ) N O . 38  OF  2020   OX AND INGS IMITED ETITIONER C    K  L               …P ERSUS V SAP I NDIA  P RIVATE  L IMITED  & A NOTHER                  …R ESPONDENTS   J UDGMENT   AMANA   N.V. R , CJI   1. This petition calls on us to examine the ‘group of companies doctrine’. In particular, it requires us to examine whether the principles   of   party   autonomy   under   arbitration   law   and corporate   personality   in   company   law   have   been   adequately safeguarded   in   outlining   the   scope   and   applicability   of   the doctrine being followed at present in Indian jurisprudence. The   present   Arbitration   Petition   has   been   preferred   by   the 2. Petitioner­Applicant under Section 11(6) and Section l1(12)(a) of the   Arbitration   and   Conciliation   Act,   1996   (hereinafter   the Signature Not Verified Digitally signed by Rajni Mukhi Date: 2022.05.07 10:56:49 IST Reason: "Arbitration Act"), for appointment of an Arbitral Tribunal in terms of the provisions of the Arbitration Act, on the ground 1 that there has been a failure with respect to the appointment of an   Arbitral   Tribunal   in   accordance   with   the   agreements between the parties.  The facts necessary for the adjudication of the dispute are as 3. follows: on 14.12.2010, the Applicant and Respondent No. l entered into an SAP Software End User License Agreement and SAP Enterprise Support Schedule under which the Applicant was made a licensee of certain ERP software developed and owned   by   the   Respondents.   This   is   an   overall   licensing agreement that all customers of the Respondents have to enter into compulsorily in advance in order to utilize any software of the Respondents. In 2015, while the Applicant was developing its own e­commerce platform, the Respondents approached the Applicant and recommended their Hybris Solution as it would be   90%   compatible   with   the   Applicant’s   software.   The Respondents indicated that the remaining 10% customisation would take only 10 months, a much shorter solution than the Applicant developing the software itself. 4. The   aforesaid   agreement   was   divided   into   3   separate transactions:  first,  the Software License and Support Agreement 2 ­   Software   Order   Form   3,   dated   30.10.2015,   was   signed between the Applicant and Respondent No. 1 for the purchase of   the   SAP   Hybris   Software   License .   Second,   an   agreement dated 30.10.2015 was signed between the parties containing the terms and conditions governing the implementation of the SAP   Hybris   software.   This   agreement   is   called   the   Services General Terms and  Conditions  Agreement ("GTC").   Third , on 16.11.2015,   an   agreement   was   entered   into   for   the customization of the software . Clause 15.7 of the GTC contains the arbitration clause which 5. we are concerned with in the present matter. The clause reads as follows: "15.7 Dispute Resolution:  In the event of any dispute or difference arising out of the subject matter  of   this   Agreement,   the   Parties   shall undertake   to   resolve   such   disputes . If disputes and differences cannot amicably be settled amicably then such disputes shall be referred   to   bench   of   three   arbitrators,   where each party will nominate one arbitrator and the two arbitrators shall appoint a third arbitrator. Arbitration   award   shall   be   binding   on   both parties.   The   arbitration   shall   be   held   in and each party will bear the expenses Mumbai  of their appointed arbitrator. The expense of the third arbitrator shall be shared by the parties. 3 The arbitration process will be governed by .” the Arbitration & Conciliation Act, 1996 Till August 2016, the  Applicant listed out various  issues in 6. project   implementation   to   Respondent   No.   1   and   requested Respondent no. 2 to intervene. Respondent No. 2, in turn, gave certain assurances to the Applicant. As the contract could not be   fulfilled   even   with   the   extended   timelines   and   additional manpower, the contractual framework pertaining to SAP Hybris Solution   was   rescinded   on   15.11.2016   after   which   the Respondents   immediately   withdrew   their   resources   from   the said project. Pursuant to the same, the Applicant demanded a refund   of   Rs.   45   crores   that   was   paid   towards   the   License Agreement, Annual Maintenance Charges, and implementation services. Respondent No. 2 in response to the said demand proposed a solution which was rejected by the Applicant.  7. Finally, after several correspondences and meetings, the matter could not be settled amicably. On 29.10.2017, Respondent No. 1 issued a notice invoking arbitration for the alleged wrongful termination of the contract and demanded payment of Rs. 17 crores. An Arbitral Tribunal comprising of Hon'ble Mr. Justice Madan   B.   Lokur   (Retd.),   Hon'ble   Mr.   Justice   Dilip   Bhosale 4 (Retd.),   and   Hon'ble   Mr.   Justice   V.   C.   Daga   (Retd.)   was constituted to adjudicate the disputes between the parties. 8. Respondent No. l initiated proceedings under Clause 15.7 of the GTC   entered   between  the   parties   on  30.10.2015.   It  may   be noted here that Respondent No. 2 was not made a party in the aforesaid proceedings. During these proceedings, the Applicant herein filed an application under Section 16 of the Arbitration Act,   before   the   Hon'ble   Tribunal,   contending   that   the   four agreements   entered   between   the   parties   are   a   part   of   a composite   transaction   and   the   same   should   be   a   part   of   a singular proceeding. 9. Meanwhile,   on   22.10.2019,   NCLT,   admitted   an   application under Section 7 of the Insolvency and Bankruptcy Code, 2016 preferred   against   the   Applicant   and   appointed   an   Interim Resolution Professional. On 05.11.2019, the NCLT directed the parties to adjourn the arbitration proceedings  sine die  in view of the moratorium imposed upon the claims against the Applicant due  to   the   initiation   of   the   Corporate   Insolvency   Resolution Process (CIRP). 5 10. On   07.11.2019,   the   Applicant   sent   a   fresh   notice   invoking Arbitration   arraying   Respondent   No.   2   in   the   Arbitration Proceedings. In the said Notice, the Applicant appointed Hon'ble Dr. Justice Arijit Pasayat as its nominated arbitrator and called upon   the   Respondents   to   appoint   their   Arbitrator   for   the constitution of the Tribunal. However, there was no response from the Respondents. Hence, the Applicant has preferred this Application   under   Section   11   of   the   Arbitration   Act   seeking appointment of the Arbitrator in an International Commercial Arbitration.  11. Mr. Kailash Vasdev, learned Senior Advocate appearing on behalf of the Applicant made the following submissions:  i. Respondent  No.  1 is a  wholly owned subsidiary  and proprietary   concern   of   Respondent   No.   2.   Since   the software is licensed by Respondent No. 2 to Respondent No. 1, the customisation would not be possible without the   aid   of   Respondent   No.   2.   Therefore,   all  the   four agreements together form a composite agreement and are a part of a single, interlinked transaction by both Respondent Nos. 1 and 2. ii. The   agreements   and   email   correspondences   clearly show that Respondent Nos. 1 and 2 and the Applicant were   in   ad   idem   for   the   implementation   and   the execution   of   the   agreements.   Especially,   when Respondent   No.   1   failed   to   execute   the   agreement, Respondent No. 2 took the responsibility to resolve the grievances of the applicant. 6 iii. Considering   the   holding   in   the   three   Judge   Bench decision of  Chloro Controls India Private Limited v. Severn Trent Water Purification Inc.,   (2013) 1 SCC 641, arbitration can be invoked even against the non­ signatories,   if   the   circumstances   demonstrate   that   it was the mutual intention of the parties.  iv. There is no commonality of claims between the present arbitration proceedings and the earlier proceedings.  v. Considering, the limited scope under Section 11 of the Arbitration Act, the intervention of the Court should be as minimal as the Court is only required to examine the existence of the arbitration agreement.  12. Mr. Ritin Rai, learned Senior Advocate appearing on behalf of the Respondent No. 1 made the following submissions:  i. The Applicant has suppressed material facts regarding its   previous   attempts   to   resist   constitution   of   an Arbitral   Tribunal.   It   ought   to   be   noted   that   when Respondent No. 1 had earlier invoked Clause 15.7 of the GTC, it was the Applicant who had challenged the same for being  void ab initio.  Now, the Applicant himself is invoking the same provision seeking the appointment of an Arbitrator.  ii. Immediately one day after the commencement of the CIRP and the consequent imposition of the moratorium, the   Applicant   has   chosen   to   raise   similar   claims through   a   fresh   notice   and   has   obliquely   arrayed Respondent No. 2 as a party to inflate its claim. It is a settled principle of law that the principle of res­judicata applies to arbitral proceedings as well. 13. Mr. Neeraj Kishan Kaul, learned Senior Advocate appearing on behalf of Respondent No. 2 made the following submissions:  7 i. Respondent No. 2 is neither a signatory, nor has it ever agreed   ( expressly   or   impliedly )   to   be   bound   by   the agreements between the Applicant and the Respondent No. 1. Respondent No. 2, being a foreign entity does not have any business dealings in India and is a separate and independent legal entity from Respondent No. 1. ii. The emails relied upon by the Applicant do not indicate any undertaking by Respondent No. 2. Especially, when the   Applicant   himself   approached   Respondent   No.   2 seeking   assistance   much   after   the   execution   of   the License Agreement and Service Agreement. Admittedly, Respondent   No.   2   was   not   involved   in   the   contract negotiation process. iii. The “ ” doctrine is not applicable in Group of Companies the present case. Respondent No. 2 is not only a non­ signatory but also never participated in the negotiation process during the drafting of the contract. Moreover, there is no consensus of the parties to be bound by the contract.  14. After  hearing  the   counsel   appearing   on   both   sides   and considering the ramifications it may have by the adjudication of the subject matter, this Court must examine the ambit of the “Group of Companies” doctrine. Ever since this doctrine was expounded  in the     ( ) case, it has  been Chloro Control supra utilised in a varied manner. It is in this context we felt that there is a further need to examine the rationality behind the doctrinal approach taken by this Court in the  Chloro Control ( ) case. supra 8 15. Arbitration is a creature of contract which has been provided statutory backing under the Arbitration Act, to usher in party autonomy,   quick   disposal,   and   an   efficacious   alternative remedy.   Arbitration   has   been   a   great   boon   for   Indian jurisprudence,   wherein   numerous   cases   have   been methodically dealt with in an effective manner without taking the meandering course of litigation before Courts. 16. One of the most challenging areas of Arbitration practice, both theoretical and practical, relates to multi­party and multi­claim proceedings.   Usually,   arbitration   involves   parties   who   have explicitly entered into an arbitration agreement, or parties with successor   interests,   claiming   under   them.   In  some   cases, it happens that third parties are bound by an arbitration clause by tacit consent, etc. 17. Doctrine   of   group   of   companies   is   one   such   area   which   is utilized   to   bind   third   parties   to   an   arbitration   agreement. Theoretically, the policy consideration of efficiency is argued to allow such joinders. However, until a legal basis for the same is provided, efficiency cannot itself be the sole ground to bind a party to arbitration. 9 18. Section   7   of   the   Arbitration   Act   defines   an   arbitration agreement. Being a creature of contract, the realm of arbitration is one of consent. The bare reading of the aforesaid provision indicates that parties must reduce their intention to submit their existing or future disputes to arbitration, in writing. The statute does not mandate a particular form for an arbitration agreement. The intention of the parties can be inferred from an exchange of letters, telex, telegram, and even electronic means. The existence of the arbitration agreement can be deduced once it is ascertained that the parties were at  ad idem  either through a contract, conduct or correspondences. (See   Govind Rubber Ltd. v. Louis Dreyfus Commodities Asia (P) Ltd .,   (2015) 13 SCC   477).   Therefore,   the   question   of   the   extension   of   an arbitration   agreement   to   non­signatories   necessarily   also involves  the  question of  the  extension of  the  scope  and   the effects of the jurisdiction of the arbitration tribunal over such 1 companies. 1   Pietro   Ferrario,   'The   Group   of   Companies   Doctrine   in   International Commercial Arbitration: Is There any Reason for this Doctrine to Exist?', Journal of International Arbitration, (© Kluwer Law International; Kluwer Law International 2009, Volume 26 Issue 5) pp. 647 ­ 673  10 19. This doctrine can be clearly stated to have originated in the Dow   Chemical   France,   the   Dow   Chemical   Company   v. Isover Saint Gobain,  (ICC Case No. 4131). In the case of  Dow   (supra), it was the subsidiaries of Dow Chemicals Chemicals which initiated Arbitration proceedings against Isover. In that case, Isover objected to the basis on which the subsidiaries of Dow Chemicals chose to arbitrate, without some of them having entered a valid arbitration agreement with Isover. The Tribunal, while   disregarding   the   contention   of   Isover,   held   that   Dow Chemicals   Group   operated   as   a   single   economic   reality   and thus the non­signatories were also bound by the arbitration agreement. We may note that the  Dow Chemicals  (supra) case related   to   a   situation   where   a   non­signatory   did   not   resist arbitration. Rather they wished to join an arbitration already initiated by its affiliates. The effect of this position has not been evaluated   in   any   precedents   of   this   Court   and   needs   to   be examined. The first case which dealt with group of companies doctrine for 20. domestic   arbitrations   was   Sukanya   Holdings   Pvt.   Ltd.   v. , (2003) 5 SCC 531. In that case, disputes Jayesh H. Pandya 11 had arisen between multiple parties over the same transaction. Some   of   the   parties   in   the   dispute   were   not   a   part   of   the arbitration agreement. The appellant was claiming relief against some of these parties who were not party to the agreement. The Court held, under Section 8 of the Arbitration Act, that causes of action cannot be bifurcated in an arbitration, and non­parties to an   arbitration   agreement   cannot   be   included   in   the   same arbitration. 21. The   next   important   case   which   dealt   with   the   group   of companies doctrine was the   (supra) case. The Chloro Control Court   at   the   outset   acknowledged   that   there   were   various school of thoughts when it came to the doctrine in arbitration jurisprudence. It was in this context that the Court had to formulate an opinion to provide a best fit for the doctrine for Indian jurisdiction under part II of the Arbitration Act. As many foreign parties were involved, the Court had to invoke Section 45   of   the   Arbitration   Act   for   appointment   of   an   arbitrator. Section 45 of the Arbitration Act stood as under:  “ 45.   Power   of   judicial   authority   to   refer parties   to   arbitration .—Notwithstanding anything contained in Part I or in the Code of 12 Civil Procedure, 1908 (V of 1908), a judicial authority, when seized of an action in a matter in respect of which the parties have made an agreement referred to in Section 44, shall, at the request of one of the parties or any person claiming   through   or   under   him,   refer   the parties to arbitration, unless it finds that the said agreement is null and void, inoperative or incapable of being performed.” 22. The Court compared Section 45 of the Arbitration Act to Article 2   of   UNCITRAL   Model   Law   and   formulated   the   following ingredients for a Judicial Authority to examine at a referral stage: “1. Does the arbitration agreement fall under the scope of the Convention? 2.   Is   the   arbitration   agreement   evidenced   in writing? 3.  Does the arbitration agreement exist and is it substantively valid? 4.   Is   there   a   dispute,   does   it   arise   out   of   a defined   legal   relationship,   whether contractual   or   not,   and   did   the   parties intend to have this particular dispute settled by arbitration? 5. Is the arbitration agreement binding on the parties   to   the   dispute   that   is   before   the court? 6. Is this dispute arbitrable?” 13 23. The Court noticed distinction in the language under Section 45 and Section 8 of the Arbitration Act in the following manner:   We   have   already   noticed   that   the “69. language   of   Section   45   is   at   a   substantial variance to the language of Section 8 in this regard.   In Section 45, the expression “any person”   clearly   refers   to   the   legislative intent of enlarging the scope of the words beyond “the parties” who are signatory to the arbitration agreement.   Of course, such applicant   should   claim   through   or   under the   signatory   party .   Once   this   link   is established, then the court shall refer them to arbitration. The use of the word “shall” would have   to   be   given   its   proper   meaning   and cannot   be   equated   with   the   word   “may”,   as liberally understood in its common parlance. The   expression   “shall”   in   the   language   of Section 45 is intended to require the court to necessarily make a reference to arbitration, if the conditions of this provision are satisfied. To that extent, we find merit in the submission that   there   is   a   greater   obligation   upon   the judicial authority to make such reference, than it was in comparison to the 1940 Act. However, the   right   to   reference   cannot   be   construed strictly as an indefeasible right. One can claim the   reference   only   upon   satisfaction   of   the prerequisites stated under Sections 44 and 45 read with Schedule I of the 1996 Act. Thus, it is a legal right which has its own contours and is   not   an   absolute   right,   free   of   any obligations/limitations.   Normally, arbitration takes place between 70. the persons who have, from the outset, been parties to both the  arbitration agreement as well   as   the   substantive   contract   underlining 14 (sic underlying) that agreement.   But, it does occasionally happen that the claim is made against or by someone who is not originally named as a party. These may create some difficult situations, but certainly, they are not   absolute   obstructions   to   law/the arbitration   agreement.  Arbitration,   thus, could be possible between a signatory to an arbitration agreement and a third party. Of course,   heavy   onus   lies   on   that   party   to show that, in fact and in law, it is claiming “through” or “under” the signatory party as contemplated under Section 45 of the 1996 Act.   Just   to   deal   with   such   situations illustratively,   reference   can   be   made   to   the following   examples   in   Law   and   Practice   of Commercial Arbitration in England (2nd Edn.) by Sir Michael J. Mustill: “1. The claimant was in reality always a party to the contract, although not named in it. 2. The claimant has succeeded by operation of law to the rights of the named party. 3.   The   claimant   has   become   a   party   to   the contract in substitution for the named party by virtue of a statutory or consensual novation. 4.   The   original   party   has   assigned   to   the claimant   either   the   underlying   contract, together with the agreement to arbitrate which it incorporates, or the benefit of a claim which has already come into existence.” (emphasis supplied) 15 From   the   above   it   is   clear   that   the   Court   was   of   the   firm opinion that there must be a legal relationship between the non­signatory and the party to the arbitration agreement.  While expounding on the legal relationship, the Court accepted 24. the   group   of   companies   doctrine   as   a   sufficient   basis   to establish this legal relationship. However, while expounding on the   ingredients   of   doctrine   itself,   the   Court   brought   in   the intention of the parties as to whether they were   ad­idem   to treat   a   non­signatory   as   being   a   party   to   the   arbitration agreement.   This   postulation   conflates   a   contractual understanding of the group of companies doctrine, which has evolved within the framework of arbitration, without alluding to contractual principles.  25. On one hand, this Court reduced the threshold of arbitration being a consensual affair. On the other, the doctrine of group of companies is transposed on requirements under contract law to bind a party to an arbitration.  An attempt was made by the Court to find a basis for reading 26. the group of companies doctrine within the language of Section 45 of the Arbitration Act in the following manner: 16 “99.   Having examined both the above stated views, we are of the considered opinion that it will be the facts of a given case that would act as   precept   to   the   jurisdictional   forum   as   to whether any of the stated principles should be adopted or not. If in the facts of a given case, it is   not   possible   to   construe   that   the   person approaching   the   forum   is   a   party   to   the arbitration   agreement   or   a   person   claiming through or under such party, then the case would not fall within the ambit and scope of the provisions of the section and it may not be possible for the court to permit reference to arbitration  at  the   behest  of   or   against   such party. 100.   We   have   already   referred   to   the judgments of various courts that   state that arbitration   could   be   possible   between   a signatory   to   an   agreement   and   a   third party. Of course, heavy onus lies on that party to show that in fact and in law, it is claiming   under   or   through   a   signatory party, as contemplated under Section 45 of the 1996 Act.” (emphasis supplied) 27. It   is   interesting   to   note   that   this   Court   discusses   some judgments from the United Kingdom in this regard. In  Roussel­ Uclaf v. G.D. Searle & Co. Limited and G. D. Searle & Co., [1978]   F.S.R   95, the   Court   interpreted   the   term   ‘claiming   through or under’ while staying a case against a company that was neither party nor privy to an arbitration agreement. Here, 17 the non­signatory was a fully owned subsidiary, and its parent company   was   a   signatory   to   an   arbitration   agreement.   The subsidiary had claimed that it had the right to sell patented articles   which   it   had   obtained   from   the   parent   company because   the   parent   company   had   ordered   the   sale   of   the patented articles. A stay on the litigation was granted, but the Court concluded that the subsidiary was ‘claiming through or under’   the   parent   company.   This   meant   that   if   the   parent company was entitled under the license agreement to sell the articles, then the same right flowed to the subsidiary company as   well.   Although   this   case   did   not   explicitly   indicate   the acceptance of group of companies doctrine under the English Law, the wordings can only be said to have left the door open to possibility of such inclusion.  28. In any case, the Court of Appeal in the case of  The Mayor and Commonalty & Citizens  of  the City of  London  v. Ashok Sancheti,   [2008] EWCA Civ 1283 overruled the   Uclaf Case ( supra ). The Court pronounced that a ‘mere legal or commercial connection is insufficient’. In essence, this restricted the phrase ‘claiming through or under’ to only those third persons who 18 assert their right on the basis of the rights of a signatory to an arbitration agreement. It is noticed that this Court in   Chloro (supra),   while   observing   both   cases   as   persuasive, Control   however,   does   not   provide   reasoning   to   favour   one interpretation over the other, in the following manner: “98.  In Roussel­Uclaf v. G.D. Searle & Co. Ltd. [(1978) 1 Lloyd's Rep 225] the Court held: “The   argument   does   not   admit   of much   elaboration,   but   I   see   no reason why these words in the Act should be construed so narrowly as to   exclude   a   wholly­owned subsidiary   company   claiming,   as here, a right to sell patented articles which it has obtained from and been ordered   to   sell   by   its   parent.   Of course,   if   the   arbitration proceedings   so   decide,   it   may eventually turn out that the parent company is at fault and not entitled to sell the articles in question at all; and,   if   so,   the   subsidiary   will   be equally at fault. But, if the parent is blameless,   it   seems   only   common sense that the subsidiary should be equally blameless.   The two parties and   their   actions   are,   in   my judgment,   so   closely   related   on the facts in this case that it would be   right   to   hold   that   the subsidiary can establish that it is within   the   purview   of   the arbitration   clause,   on   the   basis 19 that   it   is   ‘claiming   through   or under’ the parent to do what it is in fact doing whether ultimately ” held to be wrongful or not. However, the view expressed by the Court in Roussel­Uclaf case [(1978) 1 Lloyd's Rep 225] does not find approval in the decision of the Court of Appeal in City of London v. Sancheti [2008 EWCA Civ 1283 : (2009) 1 Lloyd's Rep 117 (CA)] . In para 34, it was held that the view in   Roussel­Uclaf   [(1978)   1   Lloyd's   Rep   225] need not be followed and  stay could not be obtained   against   a   party   to   an   arbitration agreement   or   a   person   claiming   through   or under   such   a   party,   as   mere   local   or commercial   connection   is   not   sufficient.   But the Court of Appeal hastened to add that, in cases   such   as   the   one   of   Mr   Sancheti, Corporation of London was not party to the arbitration agreement, but the relevant party is the United Kingdom Government. The fact that in   certain   circumstances,   the   State   may   be responsible   under   international   law   for   the acts of one of its local authorities, or may have to take steps to redress wrongs committed by one of the local authorities, does not make the local   authority   a   party   to   the   arbitration agreement.” 29. This   Court   ultimately   concluded   that   Sukanya   Holdings (supra) was not applicable for interpreting Section 45 of the Arbitration Act. The ratio of the     ( supra ) Sukanya Holdings was restricted to arbitrations under Part I of the Arbitration Act as such.  20 30. It may be noted that following the ratio in   Chloro Control th (supra), the 246   Law Commission Report recommended an amendment to Section 2(1)(h) and 8 of the Arbitration Act to modify the definition of ‘party’ under Part I of the Arbitration Act,  to  “a  party   to   an  arbitration  agreement  or   any   person claiming or through or under such party” to cure the anomaly pointed out by this Court in the  Chloro Control  ( supra ) case. th The relevant observations by the 246  Law Commission Report are extracted below: “ 61 …   It   would   thus   be   incongruous   and incompatible   with   this   “consensual”   and “agreement based” status of arbitration as a method of dispute resolution, to hold persons who   are   not   “parties”   to   the   arbitration agreement to be bound by the same.  62.However,   a   party   does   not   necessarily mean   only   the   “signatory”   to   the arbitration   agreement.   In   appropriate contexts,   a   “party”   means   not   just   a signatory,   but   also   persons   “claiming through   or   under”   such   signatory   –   for instance,   successors­of­interest   of   such .  parties, alter­ego’s of such parties etc This is   particularly   true   in   the   case   of unincorporated entities, where the issue of “personality”   is   usually   a   difficult   legal question and raises a host of other issues. This   principle   is   recognized   by   the   New York Convention, 1985 which in article II (1) recognizes an agreement between parties 21 “in respect of a defined legal relationship, whether contractual or not.”  63.The Arbitration and Conciliation Act, 1996 under section 7 borrows the definition of the “arbitration agreement” from the corresponding provision at article 7 of the UNCITRAL Model Law which in turn borrows this from article II of   the   New   York   Convention.  However,   the definition of the word “party” in section 2(1)(h) refers   to   a   “party”   to   mean   “a   party   to   an arbitration   agreement.”   This   cannot   be   read restrictively to imply a mere “signatory” to an arbitration   agreement,   since   there   are   many situations   and   contexts   where   even   a   “non­ signatory” can be said to be a “party” to an arbitration agreement. This was recognized by the Hon’ble Supreme Court in Chloro Controls v.   Severn   Trent   Water   Purification,   (2013)   1 SCC 641, where the Hon’ble Supreme Court was dealing with the scope and interpretation of section 45 of the Act and, in that context, discussed the scope of the relevant doctrines on the basis of which “non­signatories” could be   said   to   be   bound   by   the   arbitration agreement, including in cases of inter­related contracts, group of companies doctrine etc.  This   interpretation   given   by   the   Hon’ble 64. Supreme   Court   follows   from   the   wording   of section 45 of the Act which recognizes the right of   a   “person   claiming   through   or   under   [a party]” to apply to a judicial authority to refer the parties to arbitration. The same language is also to be found in section 54 of the Act. This   language   is   however,   absent   in   the corresponding provision of section 8 of the Act. It   is   similarly   absent   in   the   other   relevant provisions, where the context would demand that a party includes also a “person claiming through   or   under   such   party”.   To   cure   this anomaly,   the   Commission   proposes   an 22 amendment to the definition of “party” under section 2 (h) of the Act.” (emphasis supplied) We   must   here   also   state   that   the   Law   Commission   did   not examine the interpretation of ‘claiming through or under’. Rather, it simply recognized that there may be a need to extend the same to arbitrations under Part I of the Arbitration Act. 31. Pursuant   to   the   aforesaid   recommendation,   the   legislature made   the   following   amendment   to   Section   8(1)   of   the Arbitration Act.

23

The 2015 Amendment brought in four amendments to Section 8(1).   Firstly,   the   scope   of   the   concept   of   “party”   has   been expanded   to   include   persons   claiming   “ through   or   under ”. Secondly,   the   amendment   also   clarified   the   scope   of   judicial interference, and that the same is to be limited only to the  prima facie   examination   regarding   the   existence   of   the   arbitration agreement.   Thirdly,   the   cut­off   for   submitting   an   application under Section 8 of the Arbitration Act has been stated to be “the date of” submitting the first statement on the substance of the dispute.   Fourthly,   the   aforesaid   amendment   shall   apply notwithstanding prior judicial precedent.   However, it may be observed   that   the   Parliament   has   not   carried   out   any amendment to Section 2(1)(h) of the Arbitration Act. The impact of   the   absence   of   such   an   amendment   needs   to   be   clearly examined   by   this   Court.   This   has   created   an   anomalous situation   wherein   potentially   a   party   “claiming   through   or 24 under” could be referred to an arbitration, but would not have the right to seek relief under Section 9 of the Arbitration Act. This is merely an illustrative example to indicate a potentially anomalous result.  In   the   case   of   32. Ameet   Lalchand   Shah   v.   Rishabh Enterprises ,  (2018) 15 SCC 678, this Court had to deal with a case wherein four parties had executed four agreements for the single purpose of commissioning a Photovoltaic Solar Plant in Uttar   Pradesh.   A   Division   Bench   of   this   Court   treated   the contracts   as   interconnected.   Although   the   parties   were different,   yet   the   agreements   were   effectuated   in   light   of   a single  commercial project.  Thereafter, the  Court applied the amended Section 8(1) of the Arbitration Act and extended the arbitration to non­signatory and opined that the dispute could be resolved only by referring all four agreements and parties thereon to arbitration. The Court observed therein:

25

(emphasis supplied) The   interpretation   of   ( )   was   further 33. Chloro   Control   supra expanded in the three Judge Bench decision of this Court in Cheran Properties Ltd. v. Kasturi & Sons Ltd.,   (2018) 16 SCC 413. In that case, this Court interpreted Section 35 of the   Arbitration Act to enforce an Award against a non­signatory, even though it did not participate in the proceedings.  26

wherein the two­Judge Bench of this Court refused to apply the “group of companies” doctrine as the applicant failed to prove the commonality of intention of the Respondents to be bound by the arbitration agreement:

27

( ) emphasis supplied 35. In the Division Bench decision of this Court in   Mahanagar (2020) 12 SCC 767, Telephone Nigam Ltd. v. Canara Bank,  it was observed that the group of companies doctrine can be utilized   to   bind   a   third   party   to   an   arbitration,   if   a   tight corporate group structure constituting a single economic reality existed. The Court held as under: 28

( emphasis  supplied) We may notice that these  cases  have been decided  by this Court, without referring to the ambit of the phrase ‘claiming through   or   under’   as   occurring   under   Section   8   of   the Arbitration Act. 29 36. The   ratio   of the   Chloro Control   ( supra ) case alludes to the subjective   intention   of   parties   to   be   bound   by   arbitration agreement when the parties have clearly not been signatory to the agreement.  Reconciling  the  two  is  difficult  and  requires exposition by this Court. 37. It may be noted that the doctrine, as expounded, requires the joining of non­signatories as ‘parties in their own right’. This joinder is not premised on non­signatories ‘claiming through or under’.   Such   a   joinder   has   the   effect   of   obliterating   the commercial   reality,   and   the   benefits   of   keeping   subsidiary companies distinct. Concepts like single economic entity are economic concepts difficult to be enforced as principles of law. 38. The   areas   which   were   left   open   by   this   Court   in   Chloro ( supra )   case   has   created   certain   broad­based Control   understanding of this doctrine which may not be suitable and would clearly go against distinct legal identities of companies and   party   autonomy   itself.   The   aforesaid   exposition   in   the above case clearly indicates an understanding of the doctrine which cannot be sustainable in a jurisdiction which respects party autonomy. There is a clear need for having a re­look at 30 the doctrinal ingredients concerning the group of companies doctrine.  39. Internationally,   the   group   of   companies   doctrine   has   been accepted   in   varying   degrees.   Swiss   Courts   usually   do   not 2 recognize such a doctrine under their Switzerland  de lege lata . One English Court has observed as under : “Mr.   Hoffmann   suggested   beguilingly   that   it would   be   technical   for   us   to   distinguish between   parent   and   subsidiary   company   in this context; economically, he said, they were one.   But   we   are   concerned   not   with economics   but   with   law.   The   distinction between the two is, in law, fundamental and 3 cannot here be bridged.” (emphasis supplied) Similarly,   in   the   case   of   40. Peterson   Farms   Inc.   v.   C   &   M 4 Farming Ltd. ,  an arbitral award was challenged wherein the claimant received damages on its behalf as well as on behalf of its   group   entities   before   the   Queen's   Bench   Division (Commercial Court). The Court partly set aside the award and stated that the group of companies doctrine does not form a part of English law. It further stated that a corporate structure 2  Award in Geneva Chamber of Commerce Case of 24 March 2000, 21 ASA Bull. 781 (2003). 3  Bank of Tokyo v. Karoon, [1987] AC 45 4  [2004] EWHC 121 (Comm)  31 exists to create separate legal entities, and a general agency relationship would defeat this purpose. The Court held therein: “ 65 .   In   commercial   terms   the   creation   of   a corporate structure is by definition designed to create   separate   legal   entities   for   entirely legitimate purposes which would often if not usually   be   defeated   by   any   general   agency relationship between them…” 41. The High Court of Australia, in the case of  Tanning Research interpreted Laboratories Inc v. O'Brien, (1990) 169 CLR 332  the   phrase   “ claiming   through   and   under ”   in   the   following manner: “…A person who claims through or under a party   may   be   either   a   person   seeking   to enforce   or   a   person   seeking   to   resist   the enforcement   of   an   alleged   contractual   right. The subject of the claim may be either a cause of   action   or   a   ground   of   defence.   Next,   the prepositions   ‘through’   and   ‘under’   convey the notion of a derivative cause of action or ground of defence, that is to say, a cause of action  or ground  of defence  derived  from the   party.   In   other   words,   an   essential element of the cause of action or defence must   be   or   must   have   been   vested   in   or exercisable by the party before the person claiming   through   or   under   the   party   can rely   on   the   cause   of   action   or   ground   of defence… ” (emphasis supplied) 32 In the aforesaid case, a company and its creditor had entered a contract having an arbitration clause. Subsequently, litigation ensued, and a question arose as to whether the liquidator of the company could rely on the arbitration clause. The Court held that a liquidator may be a person who can claim through or under the company because the grounds of defence and the causes of action he depends on are vested in the company or are exercisable by the company. This meant that an essential element of a cause of action or defence must be, or have been, vested or exercisable by the original party before the person claiming through or under the said party can rely on the same. Viewed from a different angle, this Court in the case of  42. Vidya Drolia v. Durga Trading Corporation , (2021) 2 SCC 1   noted that ambit of judicial interference under Section 8 and Section 11 of the Arbitration Act is similar. The relevant observations of this Court in the aforesaid case in relation to the power under Section 8 and Section 11 is as follows: 239.  Moreover,   the   amendment   to   Section   8 now   rectifies   the   shortcomings   pointed   out in  Chloro Controls case  [ Chloro Controls (India) (P) Ltd.  v.  Severn Trent Water Purification Inc. , (2013) 1 SCC 641 : (2013) 1 SCC (Civ) 689] 33

34 appoint an arbitrator, as the case may be, unless a party has established a prima facie (summary findings) case of non­existence of valid arbitration agreement, by summarily portraying a strong case that he is entitled to such a finding. ” (emphasis supplied) In   the   aforesaid   case   of   (supra) this   Court 43. Vidya   Drolia   ,   primarily   delineated   the   threshold   standard   of   reference   to arbitration. The aforesaid case predominantly laid down that when   an   application   is   made   under   Section   11   of   the Arbitration Act, considering the scope of judicial intervention, the Courts are only required to look into the   of prima existence an arbitration agreement. 44. The   aforesaid   case   pre­dominantly   dealt   with   the   scope   of judicial interference at the referral stage. However, this Court did not have an occasion to explore the jurisprudential basis of group of companies doctrine and required ingredients to refer a “non­signatory” to arbitration. Especially, the scope of judicial reference at the stage of Sections 8 and 11 of the Arbitration Act, needs to be relooked considering the ambit of unamended Section 2(1)(h) of the Arbitration Act.  35 45. An arbitration agreement may be binding on parties, whether signatories or non­signatories, provided there is sufficient legal basis   to   bind   them.   Most   legal   bases   for   binding   non­ signatories   to   an   arbitration   agreement   are   of   contractual origin,   like   agency,   etc.   Jurisprudence   has   shown   that arbitration being a creature of contract, does not sit very well in binding non­signatories. Expounding on the same, Professor William Park, in one of his key works, captures the dilemma 5 while   attaching   a   non­signatory   to   the   arbitral   process   as under: “For   arbitrators,   motions   to   join   non­ signatories   create   a   tension   between   two principles:   maintaining   arbitration’s consensual nature, and maximizing an award’s practical   effectiveness   by   binding   related persons.   Pushed   to   the   limit   of their   logic,   each   goal   points   in   an   opposite direction.   Resolving   the   tension   usually implicates the two doctrines discussed below: implied   consent   and   disregard   of   corporate personality… The   term   “non­signatory”   remains   useful for what might be called “less­than­obvious” parties to an arbitration clause: individuals and entities that never put pen to paper, 5   William   W.   Park,   Non­Signatories   and   International   Contracts:   An Arbitrator’s   Dilemma ,   in   Multiple   Parties   in   International   Arbitration (Oxford University Press) (2009).  36 but still should be part of the arbitration under   the   circumstances   of   the   relevant business   relationship .   The   label   does   little harm if invoked merely for ease of expression, to designate someone whose right or obligation to arbitrate may be real but not self­evident... Most   significantly,   the   fact   that   a   “non­ signatory” might be bound to arbitrate does not   dispense   with   the   need   for   an arbitration   agreement.   Rather,   it   means only that the agreement takes its binding force   through   some   circumstance   other than the formality of signature .” (emphasis supplied) 46. It   is   evident   from   the   discussion   above   that   the   group   of companies doctrine must be applied with caution and mere fact that   a   non­signatory   is   a   member   of   a   group   of   affiliated companies   will   not   be   sufficient   to   claim   extension   of   the arbitration agreement to the non­signatory. In this context Gary 6 Born  notes as under: “GROUP OF COMPANIES” DOCTRINE Another   significant,   but   controversial,   basis for binding non­signatories to an arbitration agreement   is   the   “group   of   companies” doctrine. Under this principle, non­signatories of a contract may be deemed parties to the associates arbitration clause based on factors which are often roughly comparable to those relevant to an alter ego analysis. In particular, where   a   company   is   a   part   of   a   corporate group, is subject to the control of (or controls) a   corporation   affiliate   that   has   executed   a rd 6 Gary B.Born’s,  International Commercial Arbitration, 3  Edition, Volume I, Page 1558 ­  1559 37 contract and is involved in the negotiation or performance   of   that   contract,   then   that company may in some circumstances invoke or   be   subject   to   an   arbitration   clause contained   in   that   contract,   notwithstanding the fact that it has not executed the contract itself. Unlike   other   bases   for   binding   a   non­ signatory to an arbitration agreement (such as agency,   alter   ego,   estoppel,   third   party beneficiary,   or   assignment),   the   group   of companies doctrine was developed specifically in the arbitration context and is not typically invoked outside that context. At least thus far, the group of companies doctrine has also been explicitly accepted sin only a limited number of   jurisdictions   (in   particular,   as   discussed below, France). In part for that reason, the doctrine   has   given   rise   to   substantial controversy. Gary B Born also refers (in footnotes 222 and 223) to the fact that only a small number of jurisdictions France and India, appear to have applied the group of companies doctrine in the context   of   International   Arbitration   and   to   the   prevalent criticism of the group of companies doctrine. 47. In view of the aforesaid discussion, we feel it appropriate to refer the aspect of interpretation of ‘claiming through or under’ as occurring in amended Section 8 of the Arbitration Act qua the doctrine of group of companies to a larger Bench to provide clarity on this aspect.  The law laid down in   Chloro Control 38 (supra)  and the cases following it, appear to have been based, more on economics and convenience rather than law. This may not be a correct approach. The Bench doubts the correctness of the   law   laid   down   in   Chloro   Control   (supra)   and   cases following it. On a different note, we are cognizant that reference to a larger 48. Bench should not be made in a casual and cavalier manner. However,   we   see   that   the   questions   raised   herein   are fundamental to the arbitration practice in India and have large scale repercussions.   It is in this context that we deem it appropriate to refer the 49. matter to a larger Bench as the threshold laid down by  Shah (2020) 4 SCC 1 stands adequately Faesal v. Union of India,    satisfied. 50. In view of the aforesaid discussion, we deem it appropriate to refer   this   matter   to   a   larger   Bench   to   expound   on   the intricacies of the Group of Companies doctrine and answer the following questions: 39 a.   Whether phrase ‘claiming through or under’ in Sections 8   and   11   could   be   interpreted   to   include   ‘Group   of Companies’ doctrine? b.  Whether the ‘Group of companies’ doctrine as expounded by   Chloro   Control   Case   (supra)   and   subsequent judgments are valid in law? ............................CJI. (N. V. RAMANA) .........…………….......J.         (A.S. BOPANNA) NEW DELHI; MAY 06, 2022. 40 REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL ORIGINAL JURISDICTION ARBITRATION PETITION NO. 38 of 2020

JUDGEMENT Surya Kant, J: 1. I have had the advantage of going through a scholarly and self­ speaking order prepared by Hon’ble the Chief Justice, doubting the correctness of a three judge bench judgment of this Court in  Chloro Controls India (P) Ltd. v. Severn Trent Water Purification Inc.& 1  and formulating the questions of law to be determined by a larger Anr bench. While at the outset, I concur that the contours of the Group of Companies Doctrine need to be settled by a larger bench, my thoughts are oriented in favour of the Doctrine as an integral part of Indian arbitral jurisprudence for the reasons assigned below. 2. The question which has fallen for consideration in this case is whether the parent company of Respondent No. 1, namely Respondent 1 2013 1 SCC 641. Page  | 1 No. 2, should be joined to this arbitration petition regardless of the fact that the Petitioner had entered into an SAT­Software End User License Agreement and SAP­Enterprise Support Schedule with only the   subsidiary.   Petitioner   sought   greenfield   solutions   for   its   E­ Commerce problems, for which Respondent No. 1 provided its Hybris solution system. Overtime, disputes arose between the parties. During this phase, the Petitioner had requested Respondent No. 2 to mediate between the parties. However, the disputes could not be resolved. Consequently, the Petitioner initiated arbitration proceedings and has sought to bind Respondent No. 2 to the proceedings even though the said Respondent is not a signatory to the arbitration agreement.  3. On the issue of whether Respondent No. 2 may be roped into the arbitration   pending   between   the   Petitioner   and   Respondent   No.   1, Hon’ble the Chief Justice has noted that the basis under Indian law for joining non­signatories to arbitral proceedings has been the Group of   Companies   Doctrine.   While   discussing   the   holdings   in   Chloro Controls  and  Cheran Properties Ltd. v. Kasturi and Sons Ltd. & 2 , Hon’ble   the   Chief   Justice   felt   it   necessary   to   revisit   certain Ors   aspects   of   these   decisions   and   determine   whether   the   manner   in which they have invoked the Group of Companies Doctrine within Indian jurisprudence is consistent and sound.  2 2018 16 SCC 413. Page  | 2 4. Hon’ble   the   Chief   Justice   has   very   eruditely   analysed   the sustainability   of   the   Group   of   Companies   Doctrine   and   inter   alia pointed out that­ i) The application of the Group of Companies Doctrine in  Chloro Controls   relies   upon   the   intent   of   the   parties   to   include   a   non­ signatory   to   the   arbitral   proceedings.   However,   the   Court   in   that decision  failed  to  adhere  to  contractual  principles  on  the  basis  of which such intent is interpreted; ii) Joinder   of   non­signatories   based   on   the   notion   of   “single economic   unit”   ignores   commercial   reality   and   the   importance   of treating   different   parties   within   the   same   group   of   companies   as separate legal entities; iii) Following    there has been an expansion of the Chloro Controls Group of Companies Doctrine. A broad interpretation of the Doctrine is at odds with the principle of party autonomy; iv) The   line   of   judgments   by   this   Court,   beginning   with   Chloro , seem to be premised more on convenience and economic Controls efficiency in resolution of disputes rather than a consistent and clear legal doctrine which respects party autonomy and intent; v) The phrase “ claiming through or under ” as provided in Section 8 of the Arbitration and Conciliation Act, 1996 (hereinafter, “the Act”), as amended via the Arbitration Amendment Act, 2016, may not be a legitimate basis for reading the Group of Companies Doctrine into Indian law. A. Origin of the Group of Companies Doctrine Page  | 3 5. The Group of Companies Doctrine has generally been invoked by courts and tribunals in arbitrations to either ‘extend’ the arbitration agreement or ‘bind’ a non­signatory affiliate of the contracting party to the arbitration clause. As the name suggests, where an arbitration agreement is entered into by one of the companies in a group, the other   members   of   the   group   may   be   bound   by   the   arbitration agreement if the facts and circumstances, including the conduct of the parties, indicate that the true intention of parties was to bind the signatories as well as the non­signatories.  6. The Group of Companies Doctrine was first espoused explicitly by an arbitral tribunal in the case of  Dow Chemicals v. Isover Saint 3 . The International Chamber of Commerce (hereinafter “ICC”) Gobain Tribunal opined that the scope and effect of the arbitration agreement should be determined on the basis of the   “common intent of the ”   as   ascertainable   from   the   circumstances   related   to parties ‘conclusion,   performance,   and   termination,   of   the   contract’.   The Tribunal therein determined that the Dow Chemical Group had not attached any significance to which of them performed the distribution agreements   with   Saint   Gobain   and   the   common   intent   of   all   the parties was that they would be playing a role in performance of the contract. The Tribunal further held that the companies within the Dow Chemical group had acted as a single ‘economic reality’ or unit and 3 Rev Arb 137 1984; 110 JDI 899 (1983). Page  | 4 that the  non­signatories  to the  distribution  agreements with  Saint Gobain would be bound to the arbitration agreement, regardless of whether they had performed the contract. The   Tribunal   in     laid   down   the   elements 7. Dow   Chemicals required to attract the Group of Companies Doctrines, which read as follows:  “…irrespective of the distinct juridical identity of each of its members,   a group of companies constitutes one and the same   economic   reality   of   which   the   Arbitral   tribunal should   take   account   when   it   rules   on   its   own jurisdiction... ” xxx Considering that the tribunal shall, accordingly, determine the scope and effects of the arbitration clauses in question, and thereby reach its decision regarding jurisdiction, by reference to the common intent of the parties to these proceedings, such as it appears from the circumstances that surround the conclusion and characterize the performance and later the termination of the contracts in which they appear.…. xxx Considering,   in   particular,   that   the  arbitration   clause expressly accepted by certain of the companies of the group should bind the other companies which, by virtue of   their   role   in   the   conclusion,   performance,   or termination   of   the   contracts   containing   said   clauses, and   in   accordance   with   the   mutual   intention   of   all parties to the proceedings, appear to have been veritable parties   to these  contracts   or  to  have  been   principally concerned by them and the disputes to which they may .” give rise       (Emphasis Supplied) Page  | 5 B. Group of Companies Doctrine in Foreign Jurisdictions  It   is   important   to   recount   the   evolution   of   the   Group   of 8. Companies   Doctrine   in   France   and   other   jurisdictions   in   order   to understand some visible anomalies that have emerged in the Indian context.  9. The practice by Courts and tribunals in terms of usage of the Group   of   Companies   Doctrine   has   gravitated   toward   being   a   fact intensive exercise. In this context, what has emerged even in France where   the   Doctrine   originated   is   that   the   existence   of   a   group   of companies is not the sole sufficient condition for the joinder of a non­ signatory to arbitration proceedings. The Tribunal in   ICC Case Nos. 4 7604 & 7610   had summed up the steps in the application of the doctrine and held: “…Although   the   existence   of   a   group   is   the   first condition   for   joining   a   third   party   to   the   arbitration proceedings,   it   is   also   necessary   to   determine   the parties’ actual intention at the time of the facts or, at the very least the intention of the non­signatory third party.” 5 10. The Final Award in   elaborated as follows, ICC Case No. 10758 “ The   extension   of   an   arbitration   agreement   to  a   non­ signatory is not a mere question of corporate structure or   control,   but   rather   one   of   the   non­signatory’s participation   in   the   negotiations,   conclusion   or 4 ICC award in Cases No. 7604 and 7610 of 1995, 125 J Droit Int’l 1027 (1998) and 4 ICC Awards 510. 5 ICC award in Case No. 10758 of 2000, 6 ICC Ct Bull 87 (No. 2, 2005), 5 ICC Awards 537, JDI 2001, 1171. Page  | 6 performance of the contract, or its conduct towards the other party that the Arbitral Tribunal can infer.” 11. Bernard   Hanotiau,   arguably   France’s   leading   scholar   on international arbitration, while referring to French jurisprudence since Dow Chemicals , has opined that, “The   existence   of   a   group   of   companies   gives   a special dimension to the issue of conduct or consent. As several authors have pointed out, when there is a group   of   companies,   one   may   presume   that   the parent company binds its subsidiaries; but on the other   hand,   only   the   companies   that   have   been substantially   involved   in   the   negotiation   and performance   of   the   agreement   containing   the arbitration clause will be considered parties to the latter.   The case law is not always entirely clear in this respect. In most cases, it seems that only a substantial involvement is considered sufficient to constitute consent or   ratification.   Some   cases,   however,   suggest   that   a party’s conduct should not necessarily be regarded as an expression of a party’s implied consent; rather a party’s substantial   involvement   in   the   negotiation   and performance   of   the   contract   and   the   knowledge   of   the existence of the arbitration clause have a standing of their 6 own, as a substitute for consent”          (Emphasis Supplied) 6 Bernard Hanotiau, ‘Who Are the Parties to the Contract(s) or to the Arbitration Clause(s) Contained Therein? The Theories Applied by Courts and Arbitral Tribunals’ in Bernard Hanotiau (eds), Complex Arbitrations: Multi-party, Multicontract, Multi-issue – A comparative Study (Kluwer Law International 2020). Page  | 7 12. Thus, the relevance of the Group of Companies Doctrine in its jurisdiction of origin is that of being a special lens through which the parties’   intentions   are   interpreted.   The   existence   of   a   close   group structure would be only one of the considerations when determining the implied consent of a third party to arbitrate.  Subsequent French court decisions have taken a similar stance. 13. 7 In  , the Cour de Lakovoglou Prodomos and Co. v. SAS Amplitude   Cassation reiterated the requirement of involvement of the third party in the performance of the main agreement in order it to be bound by the arbitration agreement contained therein. Simply the existence of a closely   knit   group   of   companies   would   be   insufficient.   In   Societe 8 Alcatel Business Systems v. Societe Akmor Technology   as well, the Cour de Cassation noted that arbitral proceedings may bind non­ signatories involved in the substantive dispute itself.  9 14. In yet another ICC Award , the Tribunal held,“ … There is no general rule, in French international arbitration law, that would provide that non­signatory parties members of a same group of companies would be bound by an arbitration clause, whether always or in determined circumstances .” 15. The   reception   to   the   Group   of   Companies   Doctrine   in   other jurisdictions has been mixed. The Swiss Federal Tribunal rejected the 10 Group of Companies Doctrine   but has accepted that a third party 7 Cour de Cas, 1st Civ Ch, 27 Mar 2007, no 04-20842, JCP E 2007, 2018. 8 Cour de Cas, 1st Civ Ch, 7 Nov. 2012, No. 11-25.891, JCP 2012, I, 1354 No 5. 9 ICC Case No 11405, Interim award of 29 Nov 2001, Unpublished (Sole Arbitrator, Paris). 10 Judgment of 29 January 1996, 14 ASA Bull 496 (Swiss Fed Trib) (1996); Jean Francois Poudret, ‘The Page  | 8 may   ‘implicitly’   consent   to   be   bound   to   arbitration   in   certain circumstances. In general, the involvement of the non­signatory in the performance of the contract will be interpreted as intent to be bound 11 to   the   arbitration   agreement.   However,   this   requires   an   active involvement which shows clear and unambiguous intent, thus setting 12 a high threshold for a third party to be joined.   The Swiss sentiment  vis­à­vis  the Group of Companies Doctrine 16. is   mirrored   by   British   jurisprudence   where   there   has   been   an 13 unequivocal   rejection   of   the   Doctrine.   Further,   the   expression “claiming under or through” in Sec. 82(2) of the English Arbitration Act, 1996, which is similar to Sec. 8 of the amended Indian Act, 1996, has been interpreted to refer to instances that are unrelated to the Group of Companies Doctrine. British Courts have deemed it to mean 14 15 16 inter   alia   assignees ,   subrogated   insurer ,   novatees ,   and 17 successors . 17. American Courts usually do not refer to the Group of Companies Doctrine and rely primarily on aspects of American Contract Law and 18 Agency Law.  Company law principles such as alter ego and piercing the   veil   are   additionally   invoked   by   American   Courts   though   the Extension of the Arbitration Clause: French and Swiss Approaches’ 122 JDI (Clunet) 893 (1995). 11 Judgment of 19 August 2008, DFT 4A_128/2008 (Swiss Fed Trib) (2008). 12 Gabrielle Kaufmann-Kohler & A Rigozzi, International Arbitration: Law and Practice in Switzerland (OUP 2015). 13 Peterson Farms Inc v C&M Farming Ltd [2004] EWHC 121. 14 Through Transport Mutual Insurance Association (Euasia) Ltd v New India Assurance Co. Ltd [2005] EWHC 455 Moore-Bick J. 15 Starlight Shipping Co. and Anor v Tai Ping Insurance Co Ltd, Hubei Branch and Anor , [2007] EWHC 1893. 16 Charles M Willie & Co (Shipping) Ltd v Ocean Laser Shipping Ltd (The Smaro) [1998] EWHC 1206. 17 Hanotiau (n 6). 18 Gary Born, ‘Parties to International Arbitration Agreements, International Commercial Arbitration’ in Gary Born (eds) International Commercial Arbitration (Kluwer Law International 2021). Page  | 9 19 threshold   for   their   application   remains   relatively   high.   American Courts have sometimes reached conclusions through reasoning that resembles the Group of Companies Doctrine but which are actually 20 based on the principle of equitable estoppel. 18. The common theme among all these jurisdictions is that each of them has negotiated a compromise with the formalistic requirement of explicit   assent   through   a   signed   contract.   In   other   words,   these jurisdictions have moved away from this need for explicit consent in each   and   every   instance   and   have   instead   attempted   to   identify constructive   consent   via   examination   of   the   actions   of   the   parties when the circumstances of the case require it. In some instances, these jurisdictions have even applied standards that are not based upon consent at all such as equitable estoppel and piercing the veil.  C. Evolution of the Group of Companies Doctrine in India  19. Indian   arbitral   jurisprudence   with   respect   to   binding   a   non­ signatory   to   an   arbitration   agreement   has   seen   considerable transformation. In   Sukanya Holdings (P) Ltd. v. Jayesh H. Pandya 21 & Anr  certain disputes had arisen between multiple parties relating to the same transaction, however, not all parties were signatories to the agreement containing the arbitration clause. The Court therein, relying upon the unamended Section 8 of the Act, held that it would 19 Hicks v. Bank of Am, NA, 218 F App’x 739, 746 (2007); Bridas SAPIC v. Turkmenistan, 447 F 3d 411, 416- 20 (2006). 20 Astra Oil Co v Rover Navigation, Ltd, 344 F 3d 276, 277 (2003); Choctaw Generation LP v. Am Home Assur Co, 271 F 3d 403, 406-07 (2001). 21 2003 5 SCC 531. Page  | 10 not be possible to refer the non­signatories to arbitration. Thereafter, 22 in   Indowind   Energy   Ltd.   v.   Wescare   (I)   Ltd.&   Anr   this  Court interfered with an order of the Madras High Court which had allowed the application under Section 11 of the Act and joined Indowind to proceedings   even   though   Indowind   was   not   a   signatory   to   the agreement. This Court, while allowing the appeal, held: 

Indowind a party and the fact that the Director of Subuthi though a Director of Indowind, was careful not to sign the agreement as on behalf   of   Indowind,   shows   that   the   parties   did   not   intend   that Indowind should be a party to the agreement. Therefore the mere fact   that   Subuthi   described   Indowind   as   its   nominee   or   as   a company promoted by it  or that  the agreement  was  purportedly entered by Subuthi on behalf of Indowind, will not make Indowind a party   in   the   absence   of   a   ratification,   approval,   adoption   or

With   utmost   respect,   it   appears   that   the   Court   in   20. Indowind adopted a rigid and restrictive understanding of the Act. In order to hold   that   a   third   party   cannot   be   subjected   to   the   arbitration proceedings, the two judge bench placed an undue emphasis on the issue   of   formal   consent.   However,   as   noticed   earlier,   several jurisdictions have recognized  that  formal  consent  to  an  arbitration agreement is not a   sine qua non   to adduce the intention of a third party   to   be   bound   to   an   arbitration   agreement.   In   fact,   certain 22 2010 5 SCC 306. Page  | 11 principles by which Courts across jurisdictions join non­signatories to arbitration do not depend upon intent of the parties at all.  21. The principle laid down in  Indowind  was then followed in  S.N. 23 Prasad v. Monnet Finance & Ors  as well. Eventually, this position of   law   regarding   the   joinder   of   non­signatories   was   radically transformed   after   the   decision   of   this   Court   in   Chloro   Controls , whereby, the Group of Companies Doctrine was introduced into Indian jurisprudence.   In   that   case,   there   was   a   Shareholders   Agreement between   an   Indian   party   and   a   foreign   entity.   The   Shareholders Agreement was the principal or the ‘parent’ agreement with English law governing the transaction and the seat of arbitration as London. Beyond the Shareholders Agreement, there were various other inter­ linked agreements but not all these agreements had the same parties. These   other   agreements,   however,   were   part   of   a   ‘composite transaction’ and all arose out of the mother agreement. The question before the Court was whether all these parties could be referred to a single and composite arbitral tribunal. Noting earlier precedents, this Court stated that while     was decided under the Sukanya Holdings ambit of Section 8 of the Act, this case fell within the purview of Section 45 of the Act which had a much wider scope. Relying upon the expression “ person claiming through or under ” in Section 45, this Court ruled that it had the power to refer parties in a multi­party 23 2011 1 SCC 320. Page  | 12 agreement   to   Arbitration   while   invoking   the   Group   of   Companies Doctrine. It was further elucidated:  “ 69. We   have   already   noticed   that   the   language   of Section 45 is at a substantial variance to the language of Section 8 in this regard. In Section 45, the expression “any person” clearly refers to the legislative intent of enlarging the scope of the words beyond “the parties” who   are   signatory   to   the   arbitration   agreement.   Of course, such applicant should claim through or under the signatory party. Once this link is established, then the court shall refer them to arbitration. The use of the word “shall” would have to be given its proper meaning and cannot be equated with the word “may”, as liberally understood   in   its   common   parlance.   The   expression “shall”   in   the   language   of   Section   45   is   intended   to require   the   court   to   necessarily   make   a   reference   to arbitration,   if   the   conditions   of   this   provision   are satisfied. To that extent, we find merit in the submission that   there   is   a   greater   obligation   upon   the   judicial authority   to   make   such   reference,   than   it   was   in comparison   to   the   1940   Act.   However,   the   right   to reference cannot be construed strictly as an indefeasible right. One can claim the reference only upon satisfaction of   the   prerequisites   stated   under   Sections   44   and   45 read with Schedule I of the 1996 Act. Thus, it is a legal right which has its own contours and is not an absolute . right, free of any obligations/limitations xxx 72….In other words, ‘intention of the parties’ is a very significant  feature which must be established before the Page  | 13 scope of arbitration can be said to include the signatory as well as the non­signatory party. 73. A non­signatory or third party could be subjected to arbitration without their prior consent, but this would only   be   in   exceptional   cases.   The   court   will   examine these   exceptions   from   the   touchstone   of   direct relationship   to   the   party   signatory   to   the   arbitration agreement, direct commonality of the subject­matter and the   agreement   between   the   parties   being   a   composite transaction. The transaction should be of a composite nature where performance of the mother agreement may not be feasible without aid, execution and performance of   the   supplementary   or   ancillary   agreements,   for achieving   the   common   object   and   collectively   having bearing on the dispute. Besides all this, the court would have to examine whether a composite reference of such parties   would   serve   the   ends   of   justice.   Once   this exercise is completed and the court answers the same in the   affirmative,   the   reference   of   even   non­signatory parties would fall within the exception afore­discussed .”     (Emphasis Supplied) To give legislative effect to the decision in  , the 22. Chloro Controls th Law   Commission   in   its   246   Report   made   the   following recommendation:  “64. This   interpretation   given   by   the   Hon’ble   Supreme   Court follows from the wording of section 45 of the Act which recognizes the right of a “person claiming through or under [a party]” to apply to a judicial authority to refer the parties to arbitration. The same language is also to be found in section 54 of the Act. This language Page  | 14 is however, absent in the corresponding provision of section 8 of the  Act.  It   is  similarly   absent   in  the  other   relevant  provisions, where   the   context   would   demand   that   a   party   includes   also   a “person   claiming   through   or   under   such   party”.   To   cure   this anomaly,   the   Commission   proposes   an   amendment   to   the 24 definition of “party” under section 2 (h) of the Act .” 23. The Legislature in its wisdom did not amend the definition of Section   2(1)(h)   of   the   Act   but   Section   8   of   the   Act   was   amended through Act 3 of 2016, which now reads as follows:  “(1). A judicial authority, before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a

submitting his first statement on the substance of the dispute, then,   notwithstanding   any   judgment,   decree   or   order   of   the Supreme Court or any court, refer the parties to arbitration unless it finds that prima facie no valid arbitration agreement exists.” (Emphasis Supplied) 24. Following   the   post   amendment   provision(s),   the   Group   of Companies Doctrine in the Indian Context was further expanded by a three judge bench of this Court in   This Court Cheran Properties Ltd. invoked the Group of Companies Doctrine and laid down that even though Cheran was not a party to the arbitration agreement and had not appeared before the Tribunal, the arbitral award could be enforced against   it   as   Cheran   was   a   ‘party   claiming   under’   one   of   the signatories   to   the   agreement.   Speaking   on   the   importance   of   this doctrine in modern commercial transactions, the Court held that, “ The 24 Law Commission of India, Amendments to the Arbitration and Conciliation Act 1996 ¶ 64. Page  | 15 effort is to find the true essence of the business arrangement and to unravel   from   a   layered   structure  of  commercial   arrangements,   an intent   to   bind   someone   who   is   not   formally   a   signatory   but   has assumed the obligation to be bound by the actions of a signatory . ” In   25. Reckitt   Benckiser   (India)   (P)   Ltd.   v.   Reynders   Label 25 Printing (India) (P) Ltd & Anr , while acknowledging the Group of Companies Doctrine, this Court refused to allow the joinder of a non­ signatory as it could not be proved that the non­signatory company had negotiated the contract on behalf of the signatory.  A   two   judge   bench   of   this   Court   in   26. Mahanagar   Telephone 26 Nigam Limited v. Canara Bank & Ors ,   was concerned with the joinder of CANFINA, which was a non­signatory to the agreement but a wholly owned subsidiary of Canara Bank. Upon considering the nature of transaction involved and the conduct of the parties, the Court held that this was a case of “ tacit or implied consent ”   and accordingly it was necessary to join CANFINA to the arbitral proceedings. The Court stated the principles governing the group of companies doctrine to be as follows: “ 10.7. The   group   of   companies   doctrine   has   also   been invoked in cases where there is a tight group structure with strong organisational and financial links, so as to constitute   a   single   economic   unit,   or   a  single   economic reality. In such a situation, signatory and non­signatories have   been   bound   together   under   the   arbitration 25 2019 7 SCC 62. 26 2020 12 SC 767. Page  | 16 agreement. This will apply in particular when the funds of one company are used to financially support or restructure other members of the group. [ICC Case No. 4131 of 1982, ICC Case No. 5103 of 1988.] ” A three judge bench of this Court (in which I was a member), has 27. in a very recent decision dated 27.04.2022 in  Oil and Natural Gas 27 Corporation Ltd. v. M/s Discovery Enterprises Pvt. Ltd. & Anr , reiterated   the   deep   rooted   existence   of   the   Doctrine   in   the   Indian context. The Court held that the following factors may be considered when deciding whether a non­signatory company within a group of companies would be bound by the arbitration agreement:  “i) The mutual intent of the parties; (ii) The relationship of a non­signatory to a party  which is a signatory to the agreement;  (iii) The commonality of the subject matter; iv) The composite nature of the transaction; and  (v) The performance of the contract .”  (Emphasis Supplied) D. Current State of the Group of Companies Doctrine At the outset, it must be candidly acknowledged that certain 28. inconsistencies   do   exist   in   terms   of   the   judgments   of   this   Court regarding the underlying basis for the Group of Companies Doctrine. For   instance,   in   Chloro   Controls ,   the   Court   seemed   to   adopt 27 Civil Appeal No 2042 of 2022. Page  | 17 contradictory positions in terms of when a third party may be bound to the arbitration agreement. On the one hand, the Court emphasized on the intention of the parties to include the non­signatory party, but on other, it went on to add that non­signatories may be added to the arbitration proceedings without their consent in “ exceptional cases ”. Thus, it seems that while the  Chloro Controls     places a premium on the intent of parties, it also advocates taking an equity based approach to discard intent completely if so required in the interest of justice.  29. In   Mahanagar Telephone Nigam Ltd .   the Court had applied the Group of Companies Doctrine where a tight structure with deep financial and organization links existed between a signatory and non­ signatory   to   the   extent   where   they   constituted   a   “single   economic unit”. Such an approach has the tendency to overlook the principle of separate legal entity and seems to dispense almost entirely with the intent and/or consent of parties.   It is also worth noting that in   , this Court 30. Cheran Properties enforced an award against a party that had not even participated in the arbitral proceedings, by relying on the phrase “ persons claiming under   them ”   in   Section   35   of   the   Act.   This   presents   the   highest expansion of the Group of Companies Doctrine, whereby, a party is bound to the final award itself on the basis of the doctrine without having a chance to present its case or defend itself in the arbitral proceedings. This Court in  Reckitt Benckiser   fixed a higher threshold Page  | 18 of evidence for the Group of Companies Doctrine to apply as compared to   earlier   judgments.   Finally,   in   ONGC ,   the   Court   has   upheld   the necessity for a deeper probe to determine whether the Doctrine is attracted in the facts and circumstances of a given case. This leads to questions regarding which standard of proof must be fulfilled to apply the Doctrine. 31. An   overall   analysis   of   the   above   cited   judgments   reveals   an unwitting,   but   nonetheless   discordant   note   with   implicit contradictions. However, in my humble view, the appropriate response to such uncertainty would be an authoritative determination of the contours of the Doctrine rather than a wholesale uprooting of it from Indian arbitration law altogether.  32. It is important to note that the Doctrine has now travelled a reasonable distance in Indian law. While the opinion of Hon’ble the Chief Justice correctly notes that the term “parties” under Section 2(1) (h) has not been amended despite the changes introduced in Section 8 of the Act, it appears to me that one of the objectives in introducing the amended Section 8 was to accord tacit recognition and acceptance of the Group of Companies Doctrine in India.  33. It may also be noted that the question as to which entities are parties   to   the   arbitration   agreement   is   usually   left   to   judicial 28 discretion,   especially   when   there   is   a   limited   statutory   guidance. Thus, the perception regarding the questionable sourcing of the Group 28 Born (n 18). Page  | 19 of Companies Doctrine from the wording of Section 8 of the Act, does not imply that it is barred from Indian arbitration law. Undoubtedly, the   Courts   have   the   judicial   discretion   to   invoke   and   apply   the Doctrine in Indian arbitral jurisprudence.  34. The   earlier   analysis   on   the   interpretation   of   the   Group   of Companies doctrine fortifies that when formulated in its most modern sense, it does not affect the separate legal entity principle in company 29 law. Gary Born  notes that the Doctrine, “… is   ordinarily   a   means   of   identifying   the   parties’ intentions,   which   does   not   disturb   or   affect   the   legal personality of the entities in question.   Rather , as usually formulated,  the  group   of   companies  doctrine  is   akin   to principles   of   agency   or   implied   consent,   whereby   the corporate   affiliations   among   distinct   legal   entities provide   the   foundation   for   concluding   that   they   were intended to be parties to an agreement, notwithstanding their   formal   status   as   non­signatories. ”   Commentators have observed the  same distinctions between the group of companies doctrine and veil­piercing principles.”     (Emphasis Supplied) 35. It   therefore   appears   that   the   current   interpretation   of   the Doctrine   ‘ does not disturb or affect ’   the separate corporate form of different entities within a group of companies. Neither does the act of piercing the corporate veil necessarily cause the separate legal entity of the third party to collapse. In this context, corporate law doctrines such as piercing the veil and alter ego are a means by which to identify 29 Born (n 18). Page  | 20 fraudulent activity by a non­signatory which would then provide the legal justification for application of the Group of Companies Doctrine to bind that non­signatory to the arbitration. This is a departure from the “single economic reality” approach which views the entire group of companies   as   a   singular   entity   and   overrides   the   separate   legal personalities of the different members of the group.  Thus, in this approach, the separate legal form of the parent 36. company remains undisturbed and the application of veil piercing or alter ego is merely for identification of duplicitous acts by a third party which   would   then   lead   to   application   of   the   Group   of   Companies Doctrine to bind them to arbitration. The function of this is to identify parties which have no actual intent to be part of the arbitration and deliberately use the corporate form as a shield to avoid being subjected to the arbitration proceedings. For such scenarios, a formal intent­ based approach to Group of Companies Doctrine may be insufficient to address the dispute.  37. From the analysis above, it appears that joining a third party to arbitration based on the convergence of a group of companies as a “single   economic   unit”   is   no   longer   the   norm   under   the   Group   of Companies Doctrine. Instead, the standard is premised primarily on implied consent drawn from the acts and conduct of an entity within the   group   of   companies.   Where   a   closely   knit   group   exists,   the interpretation of a third party’s intent to be bound to the arbitration would   be   construed   from   facts   and   circumstances   specific   to   that Page  | 21 group   and   the   manner   in   which   it   functions.   This   maintains   the separate   legal   personality   of   the   non­signatory   and   joins   it   to   the arbitration proceedings on the basis of its implied acceptance to be bound.  38. It must be emphasized that the Doctrine is an exception to the general rule of arbitration. However, where the facts of a case indicate that the intention of the parties was to bind the non­signatory, the Courts,   after   exercising   due   care   and   caution,   will   be   justified   in invoking the Doctrine to do substantial and complete justice. After the 2016 amendment to the Act, this Court has continued to acknowledge and apply the Doctrine in exceptional cases. When all of these factors are viewed in consonance, it emerges that the Doctrine has found firm footing in Indian jurisprudence.  39. This is not without reason. On a practical front, the Doctrine is a means of grappling with complex multi­party business transactions which   necessarily   involve   more   than   two   parties,   even   if   these additional parties do not finally and formally sign the contract. To that extent,   the   Doctrine   helps   to   ensure   that   arbitration   as   a   dispute resolution mechanism is able to adapt to this reality. Failure to do so would   make   arbitration   an   ineffective   dispute   resolution   forum   as parties which are important for the complete and proper resolution of the dispute will be left out of the adjudication.  The Doctrine also ensures that multiplicity of proceedings are 40. avoided.   A   party   may   be   involved   in   the   negotiation   and   even Page  | 22 performance   of   an   agreement   but   still   be   able   to   circumvent   the arbitral process on the ground that it did not sign the contract. Such a party would then have to be proceeded against in court. There are additional benefits of having the Group of Companies 41. Doctrine   in   Indian   jurisprudence.   These   arise   from   the   peculiar circumstances and manner in which Indian business entities transact with each other and establish commercial relations. A large chunk of Indian business houses are composed of family run entities or groups. The individuals running these entities often occupy multiple roles in different companies within the group. Thus, the commonality in terms of   key   managerial   personnel   and   the   preponderance   of   family members occupying these positions moulds the way these companies conduct   business.   Entering   into   commercial   transactions   involves informal understandings based on familiarity with persons who run the overall group of companies even if not the specific entity with which a contract is formally executed.  42. In this scenario it becomes even more relevant to have a doctrine such as the Group of Companies in Indian arbitration law. A third party outside the group of companies may transact with a subsidiary due to its faith in the bona fides and commercial know­how of the parent. The third party in question relies upon the stature or presence of the larger parent company, either due to its reputation or personal familiarity with its promoters, directors or executives.  Page  | 23 43. The   Doctrine   itself   may   also   provide   greater   stimulus   for business   with   new   entities   that   are   starting   out.   Due   to   the aforementioned   peculiarities   in   Indian   business   relations,   newer companies have significant difficulty in gaining traction. One of the means by which such companies can then gain a foothold is by being part of a large (often family held) group of companies. These new entities are then able to feed off the goodwill or relations that the larger group has with the rest of the business world. Given that the connection   to   the   larger   group   is   intrinsic   to   the   way   in   which business is conducted, arbitration law must acknowledge and address this reality. 44. In fact, Tribunals have already recognized the reliance that is often placed by a company upon the conduct of the non­signatory parent company when entering into an agreement with its subsidiary. The   Tribunal   in   PetroAlliance   Services   Company   Ltd.   v.   Yukos 30 Oil   under the aegis of the Arbitration Institute of the Stockholm Chamber of Commerce is a prime example of international arbitration grappling with this issue.  45. Therein, the tribunal noted that Yukos Oil, via its actions, had created an expectation in the mind of PetroAlliance that it was willing and ready to back up/step into the shoes of its subsidiary YNG with which PetroAlliance had entered into a  contract. While there were several factors that contributed to the decision of the tribunal to bind 30 SCC Case No 108/1997, 2000. Page  | 24 Yukos to the arbitral proceedings, the most relevant takeaway for our purposes is the manner in which the tribunal enunciated the “ theory of trust ” that exists under Swedish contract law.  46. The   important   consideration   under   this   theory,   similar   to company law principles such as alter ego, is not the actual intent of the   party   as   the   non­signatory   may   be   acting   duplicitously   to represent   itself   as   the   driver   of   the   contract   while   avoiding   any liabilities arising from it by not signing the contract. Hence, what the theory examines is what intent the non­signatory has conveyed to a reasonable party in the same position as the contracting entity. The decisive factor is the extent to which the contracting party has placed “trust” in the other party, reasonably, and on the basis of the non­ signatory’s actions.  47. To clarify, the wholesale adoption of the Swedish theory of trust into Indian law is not being advocated. Rather, the notion of how we may apply the Group of Companies Doctrine in situations where non­ signatory parties are acting in a fraudulent or deceitful manner can be addressed   by   examining   the   impression   that   was   conveyed   to   the contracting   parties   by   the   third   party.   This   is   in   addition   to   the already well­established principles of piercing the veil and alter ego. This may also address the legitimate critique of  Chloro Controls   and ,   that   despite   placing   an   emphasis   on   legal Cheran   Properties standards   of   intent,   the   Court   eventually   resorted   to   principles   of Page  | 25 equity and commercial/economic expediency to apply the Group of Companies Doctrine in those cases.  E. Conclusion 48. In view of the above discussion, respectfully, I am of the opinion that the questions that are sought to be referred to a larger bench deserve further elaboration. With all the humility at my command, the following   substantial   questions   of   law   also   arise   for   authoritative determination by a larger bench in addition and in conjunction with those formulated by Hon’ble the Chief Justice:

………..………………… J. (SURYA KANT) NEW DELHI DATED :06.05.2022 Page  | 26