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.