GROUP OF COMPANIES DOCTRINE: A KEY COMPONENT OF INDIAN ARBITRATION LAW

AUTHOR – ADITYA ROY, STUDENT AT ST. XAVIERS UNIVERSITY, KOLKATA

BEST CITATION – ADITYA ROY, GROUP OF COMPANIES DOCTRINE: A KEY COMPONENT OF INDIAN ARBITRATION LAW, INDIAN JOURNAL OF LEGAL REVIEW (IJLR), 4 (3) OF 2024, PG. 101-103, APIS – 3920 – 0001 & ISSN – 2583-2344.

Abstract

On December 6, 2023, the Supreme Court of India, in Cox & Kings Ltd. v. SAP India Pvt. Ltd., recognized the “group of companies” doctrine as a component of Indian arbitration law. This doctrine allows for an arbitration agreement made by a company within a corporate group to bind non-signatory affiliates if the circumstances demonstrate a mutual intention among the parties to include both signatories and non-signatories. This ruling raises critical questions about the interplay between the doctrine and the established principles of separate legal personality in corporate law. The Supreme Court’s opinion, authored by Chief Justice Dr. Dhananjaya Y. Chandrachud, distinguishes between consent-based theories and non-consensual theories, asserting that the group of companies doctrine is grounded in consent. It emphasizes the need for a fact-specific inquiry into the relationships and intentions of the parties involved, ultimately maintaining the integrity of separate corporate identities. This landmark ruling not only clarifies the applicability of the doctrine within arbitration law but also suggests potential implications for future litigation involving corporate groups, reshaping the landscape of arbitration in India. As such, the Cox & Kings decision marks a pivotal development in balancing inclusive dispute resolution with the core principles of corporate law.