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OIL AND NATURAL GAS CORPORATION LTD. vs. M/S DISCOVERY ENTERPRISES PVT. LTD. & ANR.

SCR Citation: [2022] 4 S.C.R. 926
Year/Volume: 2022/ Volume 4
Date of Judgment: 27 April 2022
Petitioner: OIL AND NATURAL GAS CORPORATION LTD.
Disposal Nature: Appeal Allowed
Neutral Citation: 2022 INSC 483
Judgment Delivered by: Honble Dr. Justice D.Y. Chandrachud
Respondent: M/S DISCOVERY ENTERPRISES PVT. LTD. & ANR.
Case Type: CIVIL APPEAL /2042/2022
Order/Judgment: Judgment
1. Headnote

Arbitration – Group of companies doctrine – Invocation of – Held: An arbitration agreement entered into by a company within a group of companies, can bind its non-signatory affiliates or sister concerns if the circumstances demonstrate a mutual intention of the parties to bind both the signatory and affiliated, non-signatory parties – A non-signatory may be bound by the arbitration agreement where: (i) there exists a group of companies; and (ii) parties have engaged in conduct or made statements indicating an intention to bind a non-signatory – In deciding whether a company within a group of companies which is not a signatory to arbitration agreement would nonetheless be bound by it, the law considers the following factors: (i) mutual intent of the parties; (ii) relationship of a non-signatory to a party which is a signatory to the agreement; (iii) commonality of the subject matter; (iv) composite nature of the transaction; and (v) performance of the contract. Arbitration and Conciliation Act, 1996 – s.37 – Decision of Arbitral Tribunal that it lacks jurisdiction – Challenge to – Held: If the arbitral tribunal accepts a plea that it lacks jurisdiction, the order of the tribunal is amenable to a challenge in appeal u/s.37(2)(a) – In exercise of the appellate jurisdiction, the court must have due deference to the grounds which weighed with the tribunal in holding that it lacks jurisdiction having regard to the object and spirit underlying the statute which entrusts the arbitral tribunal with the power to rule on its own jurisdiction – Decision of the tribunal that it lacks jurisdiction is not conclusive because it is subject to appellate remedy u/s.37(2)(a) – However, in exercise of this appellate power, the court must be mindful of the fact that the statute has entrusted the arbitral tribunal with the power to rule on its own jurisdiction with the purpose of facilitating the efficacy of arbitration as an institutional mechanism for resolution of disputes.

2. Case referred
3. Act
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4. Keyword
  • Arbitration and Conciliation Act
  • 1996 – s.37 –
5. Equivalent citation
    Citation(s) 2022 (7) SCALE 73