Holding

The Court held that the applicability of the Group of Companies doctrine remains unsettled and must be clarified by a larger Bench, and therefore referred the matter for further determination.

Summary

The petition sought to join the parent company, a non‑signatory, to arbitration proceedings arising from a software licence and services agreement between the petitioner and a subsidiary of the parent. The Court examined the scope of the "group of companies" doctrine, particularly its reliance on the parties' subjective intention, the concept of a single economic entity, and the interplay with party autonomy under the Arbitration and Conciliation Act, 1996. It noted inconsistencies in earlier judgments, the limited statutory guidance in Sections 8 and 11, and the divergent approaches in foreign jurisdictions. Concluding that the doctrine’s legal basis remains unsettled, the Court referred the matter to a larger Bench for authoritative clarification of the doctrine and the interpretation of "claiming through or under". The petition was therefore not disposed on merits but sent for further consideration.

Issues considered

Whether the phrase ‘claiming through or under’ in Sections 8 and 11 of the Arbitration Act can be interpreted to include the Group of Companies doctrine.
Whether the Group of Companies doctrine as expounded in Chloro Controls and subsequent Indian cases is valid law.
Whether the Group of Companies doctrine should be read into Section 8 of the Act or can exist independently of any statutory provision.
Whether the doctrine should continue to be invoked on the basis of the ‘single economic reality’ principle.
Whether the doctrine should be construed as a means of interpreting implied consent or intent to arbitrate.
Whether principles of alter ego or piercing the corporate veil alone can justify applying the Group of Companies doctrine in the absence of implied consent.
Whether the parent company, a non‑signatory, should be joined to the arbitration petition in the present facts.

Legislation cited

Arbitration and Conciliation Act, 1996s. 11, s. 2(1), s. 45, s. 54, s. 7, s. 8

Subjects

ArbitrationGroup of Companies doctrineNon‑signatoryParty autonomyArbitration agreementCorporate veilImplied consentIndian arbitration lawSection 8Section 11Chloro Controls case

Judgment

182 [2022]
SUPREME COURT 15 S.C.R. 182
REPORTS [2022] 15 S.C.R.

A COX AND KINGS LIMITED
v.
SAP INDIA PRIVATE LIMITED & ANOTHER
(Arbitration Petition (Civil) No. 38 of 2020)
B MAY 06, 2022
[N. V. RAMANA, CJI, A. S. BOPANNA AND
SURYA KANT, JJ.]
Arbitration and Conciliation Act, 1996:ss. 2(1), 8 –‘Group
of companies’ doctrine as expounded in Chloro Control case –
C Examination of scope and applicability of the doctrine in Indian
jurisprudence – Issue as regards whether the parent company, which
is not signatory to the arbitration agreement should be joined to
this arbitration petition regardless of the fact that petitioner entered
into an agreement with only the subsidiary – Held: The ratio of the
Chloro Control case alludes to the subjective intention of parties to
D be bound by arbitration agreement when the parties have clearly
not been signatory to the agreement – Concepts like single economic
entity are economic concepts difficult to be enforced as principles
of law – Areas which were left open by this Court in Chloro Control
case has created certain broad-based understanding of this doctrine
which may not be suitable and would clearly go against distinct
E legal identities of companies and party autonomy itself – Law laid
down in Chloro Control and the cases following it, appear to have
been based, more on economics and convenience rather than law
which may not be the correct approach – In view thereof, the matter
referred to a larger bench to expound on the intricacies of the Group
F of Companies doctrine and answer the questions framed – Reference
to larger Bench.
Referring the matter to larger Bench, the Court
(Per N.V. RAMANA, CJI (for himself and A.S. BOPANNA.
J.)
G HELD:
1.1 The ratio of the Chloro Control’s 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
H exposition by this Court. [Para 36][208-D-E]
182
COX AND KINGS LIMITED v. SAP INDIA PRIVATE LIMITED 183
& ANOTHER

1.2 It may be noted that the doctrine, as expounded, requires A
the joining of non-signatories as ‘parties in their own right’. This
joinder is not premised on non-signatories ‘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
B
economic concepts difficult to be enforced as principles of law.
[Para 37][208-E-F]
1.3 The areas which were left open by this Court in Chloro
Control case has created certain broad-based understanding of
this doctrine which may not be suitable and would clearly go
against distinct legal identities of companies and party autonomy C
itself. The said exposition in the saidm 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 re-look at the doctrinal ingredients concerning the
‘group of companies’ doctrine. [Para 38][208-G-H] D
1.4 An arbitration agreement may be binding on parties,
whether signatories or non-signatories, 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 E
being a creature of contract, does not sit very well in binding
non-signatories. [Para 45][211-H; 212-A]
1.5 The group of companies doctrine must be applied with
caution and mere fact that a non-signatory is a member of a group
of affiliated companies will not be sufficient to claim extension of F
the arbitration agreement to the non-signatory. [Para 46][212-F-
G]
1.6 It is 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 G
larger Bench to provide clarity on this aspect. The law laid down
in Chloro Control 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

H
184 SUPREME COURT REPORTS [2022] 15 S.C.R.

A of the law laid down in Chloro Control and cases following it.
[Para 47][213-F-G]
1.7 This Court deems 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 whether
B phrase ‘claiming through or under’ in Sections 8 and 11 could be
interpreted to include ‘Group of Companies’ doctrine; and
whether the ‘Group of companies’ doctrine as expounded by
Chloro Control Case and subsequent judgments are valid in law?
[Para 50][214-B-C]
C Chloro Controls India Private Limited v. Severn Trent
Water Purification Inc. (2013) 1 SCC 641 : [2012] (13)
SCR 402 – Correctness doubted.
Govind Rubber Ltd. v. Louis Dreyfus Commodities Asia
(P) Ltd. (2015) 13 SCC 477 : [2014] (12) SCR 488;
D Dow Chemical France, the Dow Chemical Company v.
Isover Saint Gobain ICC Case No. 4131; Sukanya
Holdings Pvt. Ltd. v. Jayesh H. Pandya (2003) 5 SCC
531 : [2003] (3) SCR 558; Roussel-Uclaf v. G.D. Searle
& Co. Limited and G. D. Searle & Co. [1978] F. S. R
95; The Mayor and Commonalty & Citizens of the City
E of London v. Ashok Sancheti [2008] EWCA Civ 1283;
Ameet Lalchand Shah v. Rishabh Enterprises (2018) 15
SCC 678 : [2018] (6) SCR 1001; Cheran Properties
Ltd. v. Kasturi & Sons Ltd. (2018) 16 SCC 413 : [2018]
(4) SCR 1063; Reckitt Benckiser (India) (P) Ltd. v.
F Reynders Label Printing (India) (P) Ltd. (2019) 7 SCC
62 : [2019] (8) SCR 966; Mahanagar Telephone Nigam
Ltd. v. Canara Bank (2020) 12 SCC 767 : [2019] (11)
SCR 660; Peterson Farms Inc. v. C & M Farming Ltd.
[2004] EWHC 121 (Comm); Tanning Research
Laboratories Inc v. O’Brien (1990) 169 CLR 332; Vidya
G Drolia v. Durga Trading Corporation (2021) 2 SCC 1;
Shah Faesal v. Union of India (2020) 4 SCC 1:[2020]
(3) SCR 1115
Case Law Reference
[2012] (13) SCR 402 correctness doubted. Para 47
H
COX AND KINGS LIMITED v. SAP INDIA PRIVATE LIMITED 185
& ANOTHER

[2014] (12) SCR 488 referred to Para 18 A
[2003] (3) SCR 558 referred to Para 20
[2018] (6) SCR 1001 referred to Para 32
[2018] (4) SCR 1063 referred to Para 33
[2019] (8) SCR 966 referred to Para 34 B
[2019] (11) SCR 660 referred to Para 35
(2021) 2 SCC 1 referred to Para 42
[2020] (3) SCR 1115 referred to Para 49
C
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; Gary B.Born’s, International Commercial D
Arbitration, 3rd Edition, Volume I, Page 1558 – 1559 –
referred to.
Per SURYA KANT, J. (Concurring) :
HELD 1.1 It is important to note that the Doctrine has now
travelled a reasonable distance in Indian law. While the opinion E
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 F
Companies Doctrine in India. [Para 32][226-H]
1.2 It may also be noted that the question as to which entities
are parties to the arbitration agreement is usually left to judicial
discretion, especially when there is a limited statutory guidance.
Thus, the perception regarding the questionable sourcing of the G
Group 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. [Para
33][227-B-C]
H
186 SUPREME COURT REPORTS [2022] 15 S.C.R.

A 1.3 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 law. 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
B
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 fraudulent activity by a
non-signatory which would then provide the legal justification for
C application of the Group of Companies Doctrine to bind that
non-signatory 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. [Paras 34
and 35][227-C-D, F-H; 228-A-B]
D
1.5 In this approach, the separate legal form of the parent
company remains und4sturbed 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
E 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. [Para 36][228-
F B-C]
1.5 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
G 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
group and the manner in which it functions. This maintains the
separate legal personality of the non-signatory and joins it to the
H
COX AND KINGS LIMITED v. SAP INDIA PRIVATE LIMITED 187
& ANOTHER

arbitration proceedings on the basis of its implied acceptance to A
be bound. [Para 37][228-C-E]
1.6 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
non-signatory, the Courts, after exercising due care and caution, B
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. [Para 38][228-F-G] C

1.7 This is not without reason. On a practical front, the
Doctrine is a means of grappling with complex multi-party
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 D
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. [Para 39][228-G-H; 229-A-B] E
1.8 The Doctrine also ensures that multiplicity of
proceedings are avoided. A party may be involved in the
negotiation and even 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 F
proceeded against in court. [Para 40][229-B-C]
1.9 There are additional benefits of having the Group of
CompaniesDoctrine in Indian jurisprudence. These arise from
the peculiar circumstances and manner in which Indian business
entities transact with each other and establish commercial G
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

H
188 SUPREME COURT REPORTS [2022] 15 S.C.R.

A 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. [Para 41][229-C-E]
B
1.10 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 know-how of the parent. The third party in question
C 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. [Para 42][229-E-G]
1.11 The Doctrine itself may also provide greater stimulus
for business with new entities that are starting out. Due to the
D 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
E 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. [Para 43][229-G-H; 230-
A]

F 1.12 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 non-signatory 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 non-signatory has
G 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.The wholesale
adoption of the Swedish theory of trust into Indian law is not being
H
COX AND KINGS LIMITED v. SAP INDIA PRIVATE LIMITED 189
& ANOTHER

advocated. Rather, the notion of how we may apply the Group of A
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
well-established principles of piercing the veil and alter ego. This
B
may also address the legitimate critique of Chloro Controls and
Cheran Properties, that despite placing an emphasis on legal
standards of intent, the Court eventually resorted to principles
of equity and commercial/economic expediency to apply the Group
of Companies Doctrine in those cases. [Para 46, 47][230-E-H;
231-A] C
1.13 In view thereof, the questions that are sought to be
referred to a larger bench deserve further elaboration. 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: D
A. Whether the Group of Companies Doctrine should be
read into Section 8 of the Act or whether it can exist in Indian
jurisprudence independent of any statutory provision?
B. Whether the Group of Companies Doctrine should
continue to be invoked on the basis of the principle of ‘single E
economic reality’?
C. Whether the Group of Companies Doctrine should be
construed as a means of interpreting the implied consent or intent
to arbitrate between the parties?
F
D. Whether the principles of alter ego and/or piercing the
corporate veil can alone justify pressing the Group of Companies
Doctrine into operation even in the absence of implied consent?
[Para 48][231-B-E]
Chloro Controls India (P) Ltd. v. Severn Trent Water
G
Purification Inc. & Anr 2013 1 SCC 641 : [2012] (13)
SCR 402; Chloro Controls and Cheran Properties Ltd.
v. Kasturi and Sons Ltd. & Ors 2018 16 SCC 413 :
[2018] (4) SCR 1063; Dow Chemicals v. Isover Saint
Gobain Rev Arb 137 1984; 110 JDI 899 (1983);
H
190 SUPREME COURT REPORTS [2022] 15 S.C.R.

A Lakovoglou Prodomos and Co. v. SAS Amplitude Cour
de Cas, 1st Civ Ch, 27 Mar 2007, no 04-20842, JCP E
2007, 2018; Societe Alcatel Business Systems v. Societe
Akmor Technology Cour de Cas, 1st Civ Ch, 7 Nov.
2012, No. 11-25.891, JCP 2012, I, 1354 No 5; Peterson
Farms Inc v C &M Farming Ltd [2004] EWHC 121;
B
Through Transport Mutual Insurance Association
(Euasia) Ltd v New India Assurance Co. Ltd [2005]
EWHC 455 Moore-Bick J; Starlight Shipping Co. and
Anor v Tai Ping Insurance Co Ltd, Hubei Branch and
Anor [2007] EWHC 1893; Charles M Willie & Co
C (Shipping) Ltd v Ocean Laser Shipping Ltd (The Smaro)
[1998] EWHC 1206; Hicks v. Bank of Am, NA, 218 F
App’x 739, 746 (2007); Bridas SAPIC v. Turkmenistan,
447 F 3d 411, 416-20 (2006); 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,
D
406-07 (2001); Sukanya Holdings (P) Ltd. v. Jayesh
H. Pandya & Anr 2003 5 SCC 531 : [2003] (3) SCR
558; Indowind Energy Ltd. v. Wescare (I) Ltd. & Anr
2010 5 SCC 306 : [2010] (5) SCR 284; S.N. Prasad v.
Monnet Finance & Ors 2011 1 SCC 320 : [2010] (13)
E SCR 207; Reckitt Benckiser (India) (P) Ltd. v. Reynders
Label Printing (India) (P) Ltd & Anr 2019 7 SCC 62 :
[2019] (8) SCR 966; Mahanagar Telephone Nigam
Limited v. Canara Bank & Ors 2020 12 SC 767 : [2019]
(11) SCR 660; Oil and Natural Gas Corporation Ltd.
v. M/s Discovery Enterprises Pvt. Ltd. & Anr Civil
F
Appeal No 2042 of 2022; PetroAlliance Services
Company Ltd. v. Yukos Oil SCC Case No 108/1997,
2000 – referred to.
Case Law Reference
G [2012] (13) SCR 402 referred to Para 1
[2018] (4) SCR 1063 referred to Para 3
[2003] (3) SCR 558 referred to Para 19
[2010] (5) SCR 284 referred to Para 19
H [2010] (13) SCR 207 referred to Para 21
COX AND KINGS LIMITED v. SAP INDIA PRIVATE LIMITED 191
& ANOTHER

[2019] (8) SCR 966 referred to Para 25 A
[2019] (11) SCR 660 referred to Para 26
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), B
Complex Arbitrations: Multi-party, Multicontract, Multi-
issue – A comparative Study (Kluwer Law International
2020); Judgment of 29 January 1996, 14 ASA Bull
496 (Swiss Fed Trib) (1996); Jean Francois Poudret,
‘The Extension of the Arbitration Clause: French and
Swiss Approaches’ 122 JDI (Clunet) 893 (1995); C
Gabrielle Kaufmann-Kohler & A Rigozzi, International
Arbitration: Law and Practice in Switzerland (OUP
2015); Gary Born, ‘Parties to International Arbitration
Agreements, International Commercial Arbitration’
in Gary Born (eds) International Commercial
Arbitration (Kluwer Law International 2021) – D
referred to.
CIVIL ORIGINAL JURISDICTION : Arbitration Petition (Civil)
No.38 of 2020.
Petition Under Section 11(6), Section 11(12)(a) of the Arbitration
and Conciliation Act, 1996 for Appointment of the Arbitral Tribunal. E
Kailash Vasdev, Sr. Adv., Hiroo Advani, Divyakant Lahoti, Ms.
Madhooja Mulay, Ms. Madhur Jhavar, Ms. Vindhya Mehra, Nayantara
Gupta, Navdeep Dahiya, Advs. for the Petitioner.
Ritin Rai, Neeraj Kishan Kaul, Sr. Advs., Dheeraj Nair, Kumar
Kislay, Pratik Pawar, Siddhesh Pradhan, Ms. Shanaya Irani, Ms. Ritika F
Sinha, Advs. for the Respondents.
The Judgments* of the Court were delivered by
N. V. RAMANA, CJI
1. This petition calls on us to examine the ‘group of companies
doctrine’. In particular, it requires us to examine whether the principles G
of party autonomy under arbitration law and corporate personality in
*Ed Note: There were two judgments in the matter-one judgement rendered by
Shri N.V. Ramana, Hon’ble Chief Justice of India, for himself and on behalf of
Hon’ble Mr. Justice A.S. Bopanna; and the other judgment rendered by Hon’ble
Mr. Justice Surya Kant. H
192 SUPREME COURT REPORTS [2022] 15 S.C.R.

A company law have been adequately safeguarded in outlining the scope
and applicability of the doctrine being followed at present in Indian
jurisprudence.
2. The present Arbitration Petition has been preferred by the
Petitioner-Applicant under Section 11(6) and Section l1(12)(a) of the
B Arbitration and Conciliation Act, 1996 (hereinafter the “Arbitration Act”),
for appointment of an Arbitral Tribunal in terms of the provisions of the
Arbitration Act, on the ground that there has been a failure with respect
to the appointment of an Arbitral Tribunal in accordance with the
agreements between the parties.
C 3. The facts necessary for the adjudication of the dispute are as
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
D 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 e-commerce 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
E 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 -
Software Order Form 3, dated 30.10.2015, was signed between the
F 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
G the software.
5. Clause 15.7 of the GTC contains the arbitration clause which
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,
H
COX AND KINGS LIMITED v. SAP INDIA PRIVATE LIMITED 193
& ANOTHER [N. V. RAMANA, CJI]

the Parties shall undertake to resolve such disputes amicably. A
If disputes and differences cannot 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
B
in Mumbai and each party will bear the expenses of their
appointed arbitrator. The expense of the third arbitrator shall
be shared by the parties. The arbitration process will be
governed by the Arbitration & Conciliation Act, 1996.”
6. Till August 2016, the Applicant listed out various issues in project
implementation to Respondent No. 1 and requested Respondent no. 2 to C
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. D
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 E
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 (Retd.), and Hon’ble Mr. Justice V. C. Daga
(Retd.) was constituted to adjudicate the disputes between the parties. F

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 G
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. Mean while, on 22.10.2019, NCLT, admitted an application
under Section 7 of the Insolvency and Bankruptcy Code, 2016 preferred H
194 SUPREME COURT REPORTS [2022] 15 S.C.R.

A 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).
B 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
C 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:

D 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
E 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
F agreements. Especially, when Respondent No. 1 failed to
execute the agreement, Respondent No. 2 took the
responsibility to resolve the grievances of the applicant.
iii. Considering the holding in the three Judge Bench decision
of Chloro Controls India Private Limited v. Severn Trent
G 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
H arbitration proceedings and the earlier proceedings.
COX AND KINGS LIMITED v. SAP INDIA PRIVATE LIMITED 195
& ANOTHER [N. V. RAMANA, CJI]

v. Considering, the limited scope under Section 11 of the A
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: B
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 C
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 D
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 res-judicata applies to arbitral proceedings
as well.
13. Mr. Neeraj Kishan Kaul, learned Senior Advocate appearing E
on behalf of Respondent No. 2 made the following submissions:
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 F
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
G
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 “Group of Companies” doctrine is not applicable in
the present case. Respondent No. 2 is not only a non-
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196 SUPREME COURT REPORTS [2022] 15 S.C.R.

A 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
B matter, this Court must examine the ambit of the “Group of Companies”
doctrine. Ever since this doctrine was expounded in the Chloro Control
(supra) case, it has been 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 (supra)
case.
C
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
D the meandering course of litigation before Courts.
16. One of the most challenging areas of Arbitration practice,
both theoretical and practical, relates to multi-party and multi-claim
proceedings. Usually, arbitration involves parties who have explicitly
entered into an arbitration agreement, or parties with successor interests,
E 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.
F However, until a legal basis for the same is provided, efficiency cannot
itself be the sole ground to bind a party to arbitration.
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
G 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
H
COX AND KINGS LIMITED v. SAP INDIA PRIVATE LIMITED 197
& ANOTHER [N. V. RAMANA, CJI]

contract, conduct or correspondences. (See Govind Rubber A
Ltd. v. Louis Dreyfus Commodities Asia (P) Ltd., (2015) 13 SCC 477).
Therefore, the question of the extension of an arbitration agreement to
non-signatories necessarily also involves the question of the extension
of the scope and the effects of the jurisdiction of the arbitration tribunal
over such companies.1
B
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 Chemicals (supra),
it was the subsidiaries of Dow 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 C
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
non-signatories were also bound by the arbitration agreement. We may
note that the Dow Chemicals (supra) case related to a situation where D
a non-signatory 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.
20. The first case which dealt with group of companies doctrine E
for domestic arbitrations was Sukanya Holdings Pvt. Ltd. v. Jayesh
H. Pandya, (2003) 5 SCC 531. In that case, disputes 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 F
causes of action cannot be bifurcated in an arbitration, and non-parties
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 Chloro Control (supra) case. The Court at
the outset acknowledged that there were various school of thoughts G
when it came to the doctrine in arbitration jurisprudence. It was in this
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
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198 SUPREME COURT REPORTS [2022] 15 S.C.R.

A 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:
B “45. Power of judicial authority to refer parties to
arbitration.—Notwithstanding anything contained in Part I or in
the Code of 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
C 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
D 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?
E 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?
F
5. Is the arbitration agreement binding on the parties to the
dispute that is before the court?
6. Is this dispute arbitrable?”
23. The Court noticed distinction in the language under Section 45
G and Section 8 of the Arbitration Act in the following manner:
“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
H beyond “the parties” who are signatory to the arbitration
COX AND KINGS LIMITED v. SAP INDIA PRIVATE LIMITED 199
& ANOTHER [N. V. RAMANA, CJI]

agreement.Of course, such applicant should claim through A
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
B
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. C
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.
70. Normally, arbitration takes place between the persons who D
have, from the outset, been parties to both the arbitration agreement
as well as the substantive contract underlining (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 E
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 F
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, G
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. H
200 SUPREME COURT REPORTS [2022] 15 S.C.R.

A 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)
B From the above it is clear that the Court was of the firm opinion
that there must be a legal relationship between the non-signatory and
the party to the arbitration agreement.
24. While expounding on the legal relationship, the Court accepted
the group of companies doctrine as a sufficient basis to establish this
C 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 ad-idem to treat a non-signatory as being a party to
the arbitration agreement. This postulation conflates a contractual
understanding of the group of companies doctrine, which has evolved
D 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
E arbitration.
26. An attempt was made by the Court to find a basis for reading
the group of companies doctrine within the language of Section 45 of the
Arbitration Act in the following manner:
“99. Having examined both the above stated views, we are of
F 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
G
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
H
COX AND KINGS LIMITED v. SAP INDIA PRIVATE LIMITED 201
& ANOTHER [N. V. RAMANA, CJI]

signatory to an agreement and a third party. Of course, A
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 B
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, the non-signatory was a fully owned subsidiary, and C
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 D
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. E
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 F
those third persons who assert their right on the basis of the rights of a
signatory to an arbitration agreement. It is noticed that this Court in
Chloro Control (supra), while observing both cases as persuasive,
however, does not provide reasoning to favour one interpretation over
the other, in the following manner:
G
“98. In Roussel-Uclaf 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 wholly-owned
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202 SUPREME COURT REPORTS [2022] 15 S.C.R.

A 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
B
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
C within the purview of the arbitration clause, on the
basis 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 Roussel-Uclaf case
D [(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 Roussel-Uclaf [(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
E 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
F 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.”
G 29. This Court ultimately concluded that Sukanya Holdings
(supra) was not applicable for interpreting Section 45 of the Arbitration
Act. The ratio of the Sukanya Holdings (supra) was restricted to
arbitrations under Part I of the Arbitration Act as such.
30. It may be noted that following the ratio in Chloro Control
H (supra), the 246th Law Commission Report recommended an amendment
COX AND KINGS LIMITED v. SAP INDIA PRIVATE LIMITED 203
& ANOTHER [N. V. RAMANA, CJI]

to Section 2(1)(h) and 8 of the Arbitration Act to modify the definition of A
‘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. The relevant observations by the 246th Law Commission Report
are extracted below:
B
“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 C
“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, successors-of-interest of such parties, alter-ego’s
of such parties etc. This is particularly true in the case of
unincorporated entities, where the issue of “personality” D
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 “in respect of a defined legal
relationship, whether contractual or not.” E
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 F
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 G
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 “non-signatories” could be said to
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204 SUPREME COURT REPORTS [2022] 15 S.C.R.

A be bound by the arbitration agreement, including in cases of inter-
related contracts, group of companies doctrine etc.
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
B 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
C Commission proposes an 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
D 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.
E

F

G

H
COX AND KINGS LIMITED v. SAP INDIA PRIVATE LIMITED 205
& ANOTHER [N. V. RAMANA, CJI]

The 2015 Amendment brought in four amendments to Section A
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 cut-off for submitting an
B
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 C
examined by this Court. This has created an anomalous situation wherein
potentially a party “claiming through or 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.
D
32. In the case of 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 E
of a single commercial project. Thereafter, the Court applied the amended
Section 8(1) of the Arbitration Act and extended the arbitration to non-
signatory and opined that the dispute could be resolved only by referring
all four agreements and parties thereon to arbitration. The Court observed
therein: F
“25. Parties to the agreements, namely, Rishabh and Juwi India:
(i) Equipment and Material Supply Agreement; and (ii)
Engineering, Installation and Commissioning Contract and the
parties to Sale and Purchase Agreement between Rishabh and
Astonfield are one and the same as that of the parties in the main G
agreement, namely, Equipment Lease Agreement (14-3-2012).
All the four agreements are inter-connected. This is a case
where several parties are involved in a single commercial
project (Solar Plant at Dongri) executed through several
agreements/contracts. In such a case, all the parties can
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206 SUPREME COURT REPORTS [2022] 15 S.C.R.

A be covered by the arbitration clause in the main agreement
i.e. Equipment Lease Agreement (14-3-2012).
26. Since all the three agreements of Rishabh with Juwi India
and Astonfield had the purpose of commissioning the Photovoltaic
Solar Plant project at Dongri, Raksa, District Jhansi, Uttar Pradesh,
B the High Court was not right in saying that the Sale and Purchase
Agreement (5-3-2012) is the main agreement. The High Court, in
our view, erred in not keeping in view the various clauses in all the
three agreements which make them as an integral part of the
principal agreement, namely, Equipment Lease Agreement (14-
3-2012) and the impugned order of the High Court cannot be
C sustained.”
(emphasis supplied)
33. The interpretation of Chloro Control (supra) was further
expanded in the three Judge Bench decision of this Court in Cheran
D 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 non-signatory, even though it did not participate in
the proceedings.
34. This court in the case, Reckitt Benckiser (India) (P) Ltd. v.
E Reynders Label Printing (India) (P) Ltd., (2019) 7 SCC 62, wherein
the two-Judge 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:
“4. Keeping in mind the exposition in Chloro Controls... In other
F words, whether the indisputable circumstances go to show
that the mutual intention of the parties was to bind both the
signatory as well as the non-signatory parties, namely,
Respondent 1 and Respondent 2, respectively, qua the
existence of an arbitration agreement between the applicant
and the said respondents.
G
…
…
12.Thus, Respondent 2 was neither the signatory to the
arbitration agreement nor did have any causal connection
H
COX AND KINGS LIMITED v. SAP INDIA PRIVATE LIMITED 207
& ANOTHER [N. V. RAMANA, CJI]

with the process of negotiations preceding the agreement A
or the execution thereof, whatsoever. If the main plank of
the applicant, that Mr Frederik Reynders was acting for and on
behalf of Respondent 2 and had the authority of Respondent 2,
collapses, then it must necessarily follow that Respondent 2 was
not a party to the stated agreement nor had it given assent to the
B
arbitration agreement and, in absence thereof, even if Respondent
2 happens to be a constituent of the group of companies of which
Respondent 1 is also a constituent, that will be of no avail. For,
the burden is on the applicant to establish that Respondent
2 had an intention to consent to the arbitration agreement
and be party thereto, maybe for the limited purpose of C
enforcing the indemnity Clause 9 in the agreement, which
refers to Respondent 1 and the supplier group against any
claim of loss, damages and expenses, howsoever incurred
or suffered by the applicant and arising out of or in
connection with matters specified therein. That burden has
D
not been discharged by the applicant at all. On this finding, it must
necessarily follow that Respondent 2 cannot be subjected to the
proposed arbitration proceedings. Considering the averments in
the application under consideration, it is not necessary for us to
enquire into the fact as to which other constituent of the group of
companies, of which the respondents form a part, had participated E
in the negotiation process.”
(emphasis supplied)
35. In the Division Bench decision of this Court in Mahanagar
Telephone Nigam Ltd. v. Canara Bank, (2020) 12 SCC 767,it was
observed that the group of companies doctrine can be utilized to bind a F
third party to an arbitration, if a tight corporate group structure constituting
a single economic reality existed. The Court held as under:
“10.6. The circumstances in which the “group of companies”
doctrine could be invoked to bind the non-signatory affiliate of a
parent company, or inclusion of a third party to an arbitration, if G
there is a direct relationship between the party which is a signatory
to the arbitration agreement; direct commonality of the subject-
matter; the composite nature of the transaction between the
parties. A “composite transaction” refers to a transaction which
is interlinked in nature; or, where the performance of the agreement H
208 SUPREME COURT REPORTS [2022] 15 S.C.R.

A may not be feasible without the aid, execution, and performance
of the supplementary or the ancillary agreement, for achieving
the common object, and collectively having a bearing on the dispute.
10.7. The group of companies doctrine has also been
invoked in cases where there is a tight group structure
B 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 non-signatories
have been bound together under the arbitration agreement.
This will apply in particular when the funds of one company
are used to financially support or restructure other members
C of the group. [ ICC Case No. 4131 of 1982, ICC Case No. 5103
of 1988.]”
(emphasis supplied)
We may notice that these cases have been decided by this Court,
D without referring to the ambit of the phrase ‘claiming through or under’
as occurring under Section 8 of the Arbitration Act.
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
E the two is difficult and requires exposition by this Court.
37. It may be noted that the doctrine, as expounded, requires the
joining of non-signatories as ‘parties in their own right’. This joinder is
not premised on non-signatories ‘claiming through or under’. Such a
joinder has the effect of obliterating the commercial reality, and the
F 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 Control
(supra) case has created certain broad-based understanding of this
doctrine which may not be suitable and would clearly go against distinct
G
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 re-look at the doctrinal
ingredients concerning the group of companies doctrine.
H
COX AND KINGS LIMITED v. SAP INDIA PRIVATE LIMITED 209
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39. Internationally, the group of companies doctrine has been A
accepted in varying degrees. Swiss Courts usually do not recognize such
a doctrine under their Switzerland de lege lata.2 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 B
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 cannot here be
bridged.” 3
(emphasis supplied) C
40. Similarly, in the case of Peterson Farms Inc. v. C & M
Farming Ltd.,4 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 D
does not form a part of English law. It further stated that a corporate
structure 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 E
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
Laboratories Inc v. O’Brien, (1990) 169 CLR 332 interpreted the
phrase “claiming through and under” in the following manner: F
“…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
G
notion of a derivative cause of action or ground of defence,
that is to say, a cause of action or ground of defence derived
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) H
210 SUPREME COURT REPORTS [2022] 15 S.C.R.

A 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…”
B (emphasis supplied)
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
C 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.
D
42. Viewed from a different angle, this Court in the case of 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
E 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] with respect to
F domestic arbitration. Jurisdictional issues concerning whether
certain parties are bound by a particular arbitration, under
group-company doctrine or good faith, etc., in a multi-party
arbitration raises complicated factual questions, which are
best left for the tribunal to handle. The amendment to
G Section 8 on this front also indicates the legislative intention
to further reduce the judicial interference at the stage of
reference.
240. Courts, while analysing a case under Section 8, may choose
to identify the issues which require adjudication pertaining to the
validity of the arbitration agreement. If the court cannot rule on
H
COX AND KINGS LIMITED v. SAP INDIA PRIVATE LIMITED 211
& ANOTHER [N. V. RAMANA, CJI]

the invalidity of the arbitration agreement on a prima facie basis, A
then the court should stop any further analysis and simply refer all
the issues to arbitration to be settled.
…
242. We are cognizant of the fact that the statutory language
of Sections 8 and 11 are different, however materially they B
do not vary and both sections provide for limited judicial
interference at reference stage, as enunciated above.
…
244.1. Sections 8 and 11 of the Act have the same ambit with C
respect to judicial interference.
…
244.3. The court, under Sections 8 and 11, has to refer a
matter to arbitration or to appoint an arbitrator, as the case
may be, unless a party has established a prima facie D
(summary findings) case of non-existence of valid arbitration
agreement, by summarily portraying a strong case that he
is entitled to such a finding.”
(emphasis supplied)
E
43. In the aforesaid case of Vidya Drolia (supra), this Court
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 prima
existence of an arbitration agreement. F
44. The aforesaid case pre-dominantly 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 “non-signatory”
to arbitration. Especially, the scope of judicial reference at the stage of G
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.
45. An arbitration agreement may be binding on parties, whether
signatories or non-signatories, provided there is sufficient legal basis to
bind them. Most legal bases for binding non-signatories to an arbitration H
212 SUPREME COURT REPORTS [2022] 15 S.C.R.

A 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 non-signatories. Expounding on the same, Professor
William Park, in one of his key works, captures the dilemma while
attaching a non-signatory to the arbitral process5 as under:
B “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
C of corporate personality…
The term “non-signatory” remains useful for what might
be called “less-than-obvious” parties to an arbitration
clause: individuals and entities that never put pen to paper,
but still should be part of the arbitration under the
D 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 self-evident...
Most significantly, the fact that a “non-signatory” might be
E 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
F
companies doctrine must be applied with caution and mere fact that a
non-signatory is a member of a group of affiliated companies will not be
sufficient to claim extension of the arbitration agreement to the non-
signatory. In this context Gary Born6 notes as under:
“GROUP OF COMPANIES” DOCTRINE
G
Another significant, but controversial, basis for binding non-
signatories to an arbitration agreement is the “group of companies”
5
William W. Park, Non-Signatories and International Contracts: An Arbitrator’s
Dilemma, in Multiple Parties in International Arbitration (Oxford University Press)
(2009).
6
Gary B.Born’s, International Commercial Arbitration, 3 rd Edition, Volume I, Page
H 1558 - 1559
COX AND KINGS LIMITED v. SAP INDIA PRIVATE LIMITED 213
& ANOTHER [N. V. RAMANA, CJI]

doctrine. Under this principle, non-signatories of a contract may A
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 contract and is involved
B
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 C
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, D
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 E
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 F
of group of companies to a larger Bench to provide clarity on this aspect.
The law laid down in Chloro Control (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. G
48. On a different note, we are cognizant that reference to a
larger 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.
H
214 SUPREME COURT REPORTS [2022] 15 S.C.R.

A 49. It is in this context that we deem it appropriate to refer the
matter to a larger Bench as the threshold laid down by Shah Faesal v.
Union of India, (2020) 4 SCC 1stands adequately 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
B Group of Companies doctrine and answer the following questions:
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
C by Chloro Control Case (supra) and subsequent judgments
are valid in law?
SURYA KANT, J.
1. I have had the advantage of going through a scholarly and self-
D 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.&
Anr1 and formulating the questions of law to be determined by a larger
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
E 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
No. 2, should be joined to this arbitration petition regardless of the fact
F that the Petitioner had entered into an SAT-Software End User License
Agreement and SAP-Enterprise 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
G 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.
1
H 2013 1 SCC 641.
COX AND KINGS LIMITED v. SAP INDIA PRIVATE LIMITED 215
& ANOTHER [SURYA KANT, J.]

3. On the issue of whether Respondent No. 2 may be roped into A
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 non-signatories 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. & Ors 2, Hon’ble
B
the Chief Justice felt it necessary to revisit certain 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.
4. Hon’ble the Chief Justice has very eruditely analysed the
sustainability of the Group of Companies Doctrine and inter alia pointed C
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 D
contractual principles on the basis of which such intent is
interpreted;
ii) Joinder of non-signatories based on the notion of “single
economic unit” ignores commercial reality and the
importance of treating different parties within the same E
group of companies as separate legal entities;
iii) Following Chloro Controls there has been an expansion of
the Group of Companies Doctrine. A broad interpretation
of the Doctrine is at odds with the principle of party
autonomy; F
iv) The line of judgments by this Court, beginning with Chloro
Controls, seem to be premised more on convenience and
economic efficiency in resolution of disputes rather than a
consistent and clear legal doctrine which respects party
autonomy and intent; G
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

2
2018 16 SCC 413. H
216 SUPREME COURT REPORTS [2022] 15 S.C.R.

A 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
5. The Group of Companies Doctrine has generally been invoked
by courts and tribunals in arbitrations to either ‘extend’ the arbitration
B agreement or ‘bind’ a non-signatory 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
C that the true intention of parties was to bind the signatories as well as the
non-signatories.
6. The Group of Companies Doctrine was first espoused explicitly
by an arbitral tribunal in the case of Dow Chemicals v. Isover Saint
Gobain3. The International Chamber of Commerce (hereinafter “ICC”)
D Tribunal opined that the scope and effect of the arbitration agreement
should be determined on the basis of the “common intent of the parties”
as ascertainable from the circumstances related to ‘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
E 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 that the non-signatories
to the distribution agreements with Saint Gobain would be bound to the
F arbitration agreement, regardless of whether they had performed the
contract.
7. The Tribunal in Dow Chemicals laid down the elements required
to attract the Group of Companies Doctrines, which read as follows:
“…irrespective of the distinct juridical identity of each of its
G 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
3
Rev Arb 137 1984; 110 JDI 899 (1983).
H
COX AND KINGS LIMITED v. SAP INDIA PRIVATE LIMITED 217
& ANOTHER [SURYA KANT, J.]

Considering that the tribunal shall, accordingly, determine A
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
B
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 C
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 D
may give rise.”
(Emphasis Supplied)
B. Group of Companies Doctrine in Foreign Jurisdictions
8. It is important to recount the evolution of the Group of Companies
Doctrine in France and other jurisdictions in order to understand some E
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 F
companies is not the sole sufficient condition for the joinder of a non-
signatory to arbitration proceedings. The Tribunal in ICC Case Nos.
7604 & 76104 had summed up the steps in the application of the doctrine
and held:
“…Although the existence of a group is the first condition for
G
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 non-signatory
third party.”
4
ICC award in Cases No. 7604 and 7610 of 1995, 125 J Droit Int’l 1027 (1998) and 4
ICC Awards 510. H
218 SUPREME COURT REPORTS [2022] 15 S.C.R.

A 10. The Final Award in ICC Case No. 107585 elaborated as
follows,
“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 non-signatory’s participation in the
B negotiations, conclusion or 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
C 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;
D 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
E 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
F arbitration clause have a standing of their own, as a substitute
for consent” 6
(Emphasis Supplied)
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
G parties’ intentions are interpreted. The existence of a close group structure
5
ICC award in Case No. 10758 of 2000, 6 ICC Ct Bull 87 (No. 2, 2005), 5 ICC Awards
537, JDI 2001, 1171.
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-
H issue – A comparative Study (Kluwer Law International 2020).
COX AND KINGS LIMITED v. SAP INDIA PRIVATE LIMITED 219
& ANOTHER [SURYA KANT, J.]

would be only one of the considerations when determining the implied A
consent of a third party to arbitrate.
13. Subsequent French court decisions have taken a similar stance.
In Lakovoglou Prodomos and Co. v. SAS Amplitude7, the Cour de
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 B
arbitration agreement contained therein. Simply the existence of a closely
knit group of companies would be insufficient. In Societe Alcatel
Business Systems v. Societe Akmor Technology8 as well, the Cour de
Cassation noted that arbitral proceedings may bind non-signatories
involved in the substantive dispute itself.
C
14. In yet another ICC Award9, the Tribunal held,”…There is no
general rule, in French international arbitration law, that would
provide that non-signatory parties members of a same group of
companies would be bound by an arbitration clause, whether always
or in determined circumstances.”
D
15. The reception to the Group of Companies Doctrine in other
jurisdictions has been mixed. The Swiss Federal Tribunal rejected the
Group of Companies Doctrine10 but has accepted that a third party may
‘implicitly’ consent to be bound to arbitration in certain circumstances.
In general, the involvement of the non-signatory in the performance of
the contract will be interpreted as intent to be bound to the arbitration E
agreement.11 However, this requires an active involvement which shows
clear and unambiguous intent, thus setting a high threshold for a third
party to be joined.12
16. The Swiss sentiment vis-à-vis the Group of Companies
Doctrine is mirrored by British jurisprudence where there has been an F
unequivocal rejection of the Doctrine.13 Further, the expression “claiming
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
G
Francois Poudret, ‘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. H
220 SUPREME COURT REPORTS [2022] 15 S.C.R.

A 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 inter alia
assignees14, subrogated insurer15, novatees16, and successors17.
B 17. American Courts usually do not refer to the Group of
Companies Doctrine and rely primarily on aspects of American Contract
Law and Agency Law.18 Company law principles such as alter ego and
piercing the veil are additionally invoked by American Courts though the
threshold for their application remains relatively high.19 American Courts
have sometimes reached conclusions through reasoning that resembles
C the Group of Companies Doctrine but which are actually based on the
principle of equitable estoppel.20
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
D 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
E 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
F 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
G 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).
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
H LP v. Am Home Assur Co, 271 F 3d 403, 406-07 (2001).
COX AND KINGS LIMITED v. SAP INDIA PRIVATE LIMITED 221
& ANOTHER [SURYA KANT, J.]

& Anr21 certain disputes had arisen between multiple parties relating to A
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 not be
possible to refer the non-signatories to arbitration. Thereafter, in Indowind
Energy Ltd. v. Wescare (I) Ltd.& Anr22 this Court interfered with an
B
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:
“18. The very fact that the parties carefully avoided making
Indowind a party and the fact that the Director of Subuthi C
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 D
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 confirmation
of the agreement dated 24-2-2006 by Indowind.”
20. With utmost respect, it appears that the Court in Indowind E
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 F
agreement. In fact, certain principles by which Courts across jurisdictions
join non-signatories 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. Prasad v. Monnet Finance & Ors23 as well. Eventually, this G
position of law regarding the joinder of non-signatories was radically
transformed after the decision of this Court in Chloro Controls, whereby,
21
2003 5 SCC 531.
22
2010 5 SCC 306.
23
2011 1 SCC 320. H
222 SUPREME COURT REPORTS [2022] 15 S.C.R.

A 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
B
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
C Sukanya Holdings was decided under the 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 multi-party agreement to Arbitration while invoking
the Group of Companies Doctrine. It was further elucidated:
D
“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
E 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
F 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
G 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
H
COX AND KINGS LIMITED v. SAP INDIA PRIVATE LIMITED 223
& ANOTHER [SURYA KANT, J.]

its own contours and is not an absolute right, free of any A
obligations/limitations.
xxx
72….In other words, ‘intention of the parties’ is a very
significant feature which must be established before the scope
of arbitration can be said to include the signatory as well as B
the non-signatory party.
73. A non-signatory 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 C
to the arbitration agreement, direct commonality of the subject-
matter 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 D
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 E
even non-signatory parties would fall within the exception
afore-discussed.”
(Emphasis Supplied)
22. To give legislative effect to the decision in Chloro Controls, F
the Law Commission in its 246 th 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 G
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 H
224 SUPREME COURT REPORTS [2022] 15 S.C.R.

A anomaly, the Commission proposes an amendment to the definition
of “party” under section 2 (h) of the Act.”24
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:
B “(1). A judicial authority, before which an action is brought in a
matter which is the subject of an arbitration agreement shall, if a
party to the arbitration agreement or any person claiming
through or under him, so applies not later than the date of
submitting his first statement on the substance of the dispute, then,
notwithstanding any judgment, decree or order of the Supreme
C 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
D three judge bench of this Court in Cheran Properties Ltd. This Court
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
E agreement. Speaking on the importance of this doctrine in modern
commercial transactions, the Court held that, “The 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.”
F
25. In Reckitt Benckiser (India) (P) Ltd. v. Reynders Label
Printing (India) (P) Ltd & Anr 25, 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 non-signatory company had
negotiated the contract on behalf of the signatory.
G 26. A two judge bench of this Court in Mahanagar Telephone
Nigam Limited v. Canara Bank & Ors26, was concerned with the
24
Law Commission of India, Amendments to the Arbitration and Conciliation Act 1996
¶ 64.
25
2019 7 SCC 62.
26
H 2020 12 SC 767.
COX AND KINGS LIMITED v. SAP INDIA PRIVATE LIMITED 225
& ANOTHER [SURYA KANT, J.]

joinder of CANFINA, which was a non-signatory to the agreement but A
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
B
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 non-signatories have been bound together C
under the arbitration 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.]”
27. A three judge bench of this Court (in which I was a member), D
has in a very recent decision dated 27.04.2022 in Oil and Natural Gas
Corporation Ltd. v. M/s Discovery Enterprises Pvt. Ltd. & Anr27,
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 non-signatory company within a group of companies would E
be bound by the arbitration agreement:
“i) The mutual intent of the parties;
(ii) The relationship of a non-signatory to a party which is
a signatory to the agreement;
F
(iii) The commonality of the subject matter;
iv) The composite nature of the transaction; and
(v) The performance of the contract.”
(Emphasis Supplied)
G
D. Current State of the Group of Companies Doctrine
28. At the outset, it must be candidly acknowledged that certain
inconsistencies do exist in terms of the judgments of this Court regarding
the underlying basis for the Group of Companies Doctrine. For instance,
27
Civil Appeal No 2042 of 2022. H
226 SUPREME COURT REPORTS [2022] 15 S.C.R.

A in Chloro Controls, the Court seemed to adopt 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 non-signatory party, but on other, it went on to add that non-
signatories may be added to the arbitration proceedings without their
consent in “exceptional cases”. Thus, it seems that while the Chloro
B
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
C 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.
D 30. It is also worth noting that in Cheran Properties, this Court
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
E 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 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
F 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
G 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
H Justice correctly notes that the term “parties” under Section 2(1)(h) has
COX AND KINGS LIMITED v. SAP INDIA PRIVATE LIMITED 227
& ANOTHER [SURYA KANT, J.]

not been amended despite the changes introduced in Section 8 of the A
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 discretion, B
especially when there is a limited statutory guidance. 28 Thus, the
perception regarding the questionable sourcing of the Group 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. C

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
law. Gary Born29 notes that the Doctrine,
D
“…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 E
that they were intended to be parties to an agreement,
notwithstanding their formal status as non-signatories.”
Commentators have observed the same distinctions between
the group of companies doctrine and veil-piercing principles.”
(Emphasis Supplied) F
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 G
as piercing the veil and alter ego are a means by which to identify
fraudulent activity by a non-signatory which would then provide the legal
justification for application of the Group of Companies Doctrine to bind
28
Born (n 18).
29
Born (n 18). H
228 SUPREME COURT REPORTS [2022] 15 S.C.R.

A that non-signatory 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.
36. Thus, in this approach, the separate legal form of the parent
B 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
C 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
D 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 group and the manner in
E which it functions. This maintains the separate legal personality of the
non-signatory 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
F that the intention of the parties was to bind the non-signatory, 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
G jurisprudence.
39. This is not without reason. On a practical front, the Doctrine
is a means of grappling with complex multi-party 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
H
COX AND KINGS LIMITED v. SAP INDIA PRIVATE LIMITED 229
& ANOTHER [SURYA KANT, J.]

Doctrine helps to ensure that arbitration as a dispute resolution mechanism A
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.
40. The Doctrine also ensures that multiplicity of proceedings are B
avoided. A party may be involved in the negotiation and even 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.
41. There are additional benefits of having the Group of Companies C
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 D
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 E
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 know-how of the parent. F
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.
43. The Doctrine itself may also provide greater stimulus for
business with new entities that are starting out. Due to the aforementioned G
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
H
230 SUPREME COURT REPORTS [2022] 15 S.C.R.

A 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 non-signatory parent
B company when entering into an agreement with its subsidiary. The
Tribunal in Petro Alliance Services Company Ltd. v. Yukos Oil30 under
the aegis of the Arbitration Institute of the Stockholm Chamber of
Commerce is a prime example of international arbitration grappling with
this issue.
C 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 Yukos to
the arbitral proceedings, the most relevant takeaway for our purposes is
D 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 non-signatory may be acting duplicitously to represent itself
E 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 non-signatory 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,
F 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
G be addressed by examining the impression that was conveyed to the
contracting parties by the third party. This is in addition to the already
well-established principles of piercing the veil and alter ego. This may
also address the legitimate critique of Chloro Controls and Cheran
Properties, that despite placing an emphasis on legal standards of intent,
30
H SCC Case No 108/1997, 2000.
COX AND KINGS LIMITED v. SAP INDIA PRIVATE LIMITED 231
& ANOTHER [SURYA KANT, J.]

the Court eventually resorted to principles of equity and commercial/ A
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 B
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:
A. Whether the Group of Companies Doctrine should be read C
into Section 8 of the Act or whether it can exist in Indian
jurisprudence independent of any statutory provision?
B. Whether the Group of Companies Doctrine should continue
to be invoked on the basis of the principle of ‘single economic
reality’? D
C. Whether the Group of Companies Doctrine should be
construed as a means of interpreting the implied consent or
intent to arbitrate between the parties?
D. Whether the principles of alter ego and/or piercing the
E
corporate veil can alone justify pressing the Group of
Companies Doctrine into operation even in the absence of
implied consent?

Nidhi Jain Matter refered to larger Bench.
(Assisted by : Shashwat Jain, LCRA) F

G

H