TaxTMI 
TaxTMI 
2022 (4) TMI 1350
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........................................................................... 21 C.1. Group of Companies Doctrine..................................................................... 21 C.2. Standard for Review of the Interim Arbitral Award ...................................... 37 D Conclusion ......................................................................................................... 58 A Facts 1 The appeal arises from a judgment dated 27 June 2012 of the High Court of Judicature at Bombay by which an appeal under Section 37 of the Arbitration and Conciliation Act, 1996 "Act of 1996" has been dismissed. Oil & Natural Gas Corporation Limited "ONGC" instituted an appeal against an interim award dated 27 October 2010 "interim award" of the Arbitral Tribunal holding that the second respondent - Jindal Drilling and Industries Limited "JDIL" or the "second respondent" was not a party to the arbitration agreement and must be deleted from the array of parties. The interim award was challenged in an appeal which was dismissed by the impugned judgment. 2 On 22 March 2006, ONGC awarded a contract to Discovery Enterprises Private Limited "DEPL", the first respondent, which is....
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....edged that the contractor M/s DEPL is a group company of Jindal Group in their website in an article titled "Key due diligence observations". A copy of the said article is annexed herewith and marked as Annexure 8. Since Respondent No. 1 is liable to compensate ONGC for the losses suffered by it, ONGC has adjusted the said amount from the monies payable to Jindal Drilling and Industries Limited as a security to satisfy the award to be passed in this case. 18. As stated above, Respondent No. 2 was supplying vessels and rigs to ONGC under various contracts, for last many years. It is a fact that the Respondent No.1 was formed as a group company with the charter of introducing cutting-edge technology and solutions to the oil and gas market in India. Respondent No.1 has represented itself as a part of the DP Jindal group of companies as seen from the company's website (www.discoveryepl.com). A copy of the relevant extract from the website is attached herewith and marked as Annexure A-9. The same web-based representation was made in categorical and unequivocal manner by Respondent No.1 in the bid submitted by them in connection with the subject contract. The copy of the same is an....
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....e dues of respondent No.1. The issue preferred to Tribunal is within the arbitration agreement and under law and this Hon'ble Tribunal has jurisdiction to entertain and decide the dispute." 4 An application under Section 16 of the Act of 1996 was filed by JDIL seeking its deletion from the arbitral proceedings on the ground that it is not a party to the arbitration agreement. ONGC responded to the application. During the course of the proceedings, ONGC filed an application on 5 January 2009 for discovery and inspection to support its case that DEPL is an alter ego of the Jindal Group of companies. In support of the application for discovery and inspection, ONGC pleaded that: (i) DEPL and JDIL are group companies and that the former is an agent or alter ego of the latter; (ii) There exists corporate and functional unity between them; (iii) DEPL is a corporate facade which has been created to promote and extend the business of JDIL; (iv) JDIL is responsible for the acts of omission and commission of DEPL on the basis of the group of companies doctrine; (v) DEPL has been created by the Jindal Group to render services in the oil and gas sector and each entity of the group is stra....
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....ing minutes: "Per Tribunal : The documents produced by the witness Anindya Bhattacharya (CW-1) along with his affidavit dated June 26th 2009 and annexures 1 to 10 are taken on record. Mr. Rahul Narichania, Ld. Advocate for Respondent No. 2 objects to these documents being taken on record on the ground that the same are not relevant and admissible as far as the Respondent No. 2 is concerned. He further stated that he will cross examine the witness on the documents without prejudice to his rights that the said documents were neither relevant nor admissible in evidence and ought not to be marked as exhibits. The rival contentions will be decided while disposing of the application made under Section 16 of the Arbitration & Conciliation Act, 1996. It is also made clear that merely because the witness has been cross examined on behalf of the Respondent No. 2 on the documents, the documents do not automatically stand exhibited. Mr. Rajiv Kumar objects to the procedure recorded above. The Claimants do not waive any rights in this behalf." 7 By its interim award dated 27 October 2010, the Arbitral Tribunal held that it lacked the jurisdiction to arbitrate on the claim against JDIL,....
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....een the two companies, ONGC awarded the said contract to DEPL. Even assuming this to be correct, it does not take the case of ONGC any further. JDIL is admittedly not a party to the contract and cannot be liable under the said contract which is only between ONGC and DEPL. If ONGC wanted to bind JDIL to the said contract, it should have asked JDIL to be a party to the said contract. In fact, this court inquired from learned Advocate appearing for ONGC as to why ONGC did not insist on JDIL signing the said contract when admittedly there are other contracts which are entered into between ONGC and JDIL. However, the learned advocate appearing for ONGC had no answer to the same. In response, he only submitted that ONGC has also filed suit being 2947 of 2011 in this court in which DEPL and JDIL have been arrayed as the defendants." 9 The judgment of the High Court was challenged by ONGC under Article 136 of the Constitution. The Arbitral Tribunal delivered its final award dated 6 June 2013 "Arbitral Award in the first proceeding" and, while allowing the claim of ONGC, held that it is entitled to recover an amount of Rs. 63.87 crores and USD 1,756,197.50 together with interest at 9% per ....
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.... group companies of D.P. Jindal group of companies. Although the directors of DEPL are the son and daughter-in-law of the managing director of the Claimant, and the two companies, for some time, shared a common office and telephone numbers, that does not make the two companies one. Both are subsidiaries of the main company and both have independent legal existence. DEPL was incorporated in the year 2003. The Claimant is a public limited company listed on the stock exchange and was incorporated in the year 1983. 26. [...] The facts of the present case are totally different and do not warrant lifting of corporate veil, assuming there is one. The evidence in the present case does not justify the application of "lifting the corporate veil". In respect of the contract which was entered into by the Respondent with DEPL, the tender was floated by ONGC in 2005 and the contract was entered into in 2006. There is no material to show that the Respondent awarded the contract to DEPL because it was in fact the claimant and/ or was supported by the claimant. The minutes of the meeting held by the Respondents for short-listing of bidders in respect of the contract have not been produced. The on....
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....ing out of the interim award dated 27 October 2010. B Submissions of Counsel 13 Mr K M Nataraj, Additional Solicitor General "ASG", appearing on behalf of ONGC submitted that: (i) The case of ONGC is that DEPL and JDIL constitute one single commercial entity and that ONGC is hence entitled by law to compel JDIL to participate in the arbitration proceedings so as to enforce the award against it; (ii) Though evidence was available with ONGC to buttress the above claim, it filed an application for discovery and inspection to secure material which was within the possession, control and custody of JDIL. However, with the deletion of JDIL from the array of parties, the application for discovery and inspection has been rendered otiose; (iii) The Arbitral Tribunal has not enquired into the facts at all, despite the contention of ONGC that JDIL is a necessary party; (iv) The Arbitral Tribunal has merely held, on the basis of the legal principle underlying Section 7 of the Act of 1996 and privity of contract, that JDIL which is not a signatory to the arbitration agreement cannot be impleaded in the arbitral proceedings; (v) After the application for discovery and inspection was o....
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....nbsp; any role to find itself in the contract between Para 16 Page 14 of SLP There is no evidence tendered before Arbitral Tribunal that DEPL and JDIL had common shareholders and common Board of Directors. Even if that had been the case, the Hon'ble Supreme DEPL is an alter ego of JDIL. JDIL is the ultimate beneficiary in the business with DEPL. DEPL has close corporate unity with JDIL. seen that there is no benefit being derived by JDIL from DEPL. Further, it was incorporated in 1983 and DEPL was incorporated way later in 2003. * DEPL and ONGC. The executives of JDIL participated in the negotiations, etc. on behalf of DEPL as their signatures duly signify. The personal relationship between the directors of DEPL and MD of JDIL is of no consequence. Clearly JDIL is not party to the arbitration agreement. Para 20 Page 180 of SLP None of the documents on the record would satisfy the requirement of clauses a, b & c of sub- section 7. * Court of India in Indowind Versus Wescare case (supra) has held that merely because two companies have common shareholders and Dire....
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....on- signatory companies, when the underlying contract is intended to benefit the non- signatory as in the instant case. There are no underlying contracts wherein JDIL has any interest. JDIL was never a party or had any benefits arising from the contract between DEPL and ONGC. ONGC and JDIL have four separate contracts which are a part of TC 47-50 of 2016 proceedings. JDIL and DEPL have offices in the same building/same premises. A lot of businesses have common business address (Eg. Tata Companies). Just on the basis of the same, it certainly cannot be said that they are one and the same. Especially todays' time of co- working spaces, a lot of companies operate out of the same premises." 15 The following submissions have been urged by Mr Shyam Divan, Senior Counsel behalf of the respondent: (i) There is no disputing the factual position that DEPL is a part of the D P Jindal Group, yet JDIL has no shareholding in DEPL. There is neither any cross shareholding nor any common directors; (ii) In 2010, DEPL ceased to be a part of the D P Jindal Group. However, JDIL continues to be a part of the D P Jindal Group of companies together with other group entities such as Maharashtra Se....
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....hat he has accessed the website of DEPL for the first time in June 2008, after the award of the contract on 22 March 2006. Hence it is not open to ONGC to claim that DEPL or JDIL represented to ONGC that DEPL was a group company of JDIL or that ONGC awarded the contract because of any representation by JDIL on its website. C Analysis C.1. Group of Companies Doctrine 16 Section 7 "7. Arbitration agreement.- (1) In this Part, "arbitration agreement" means an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not. (2) An arbitration agreement may be in the form of an arbitration clause in a contract or in the form of a separate agreement. (3) An arbitration agreement shall be in writing. (4) An arbitration agreement is in writing if it is contained in- (a) a document signed by the parties; (b) an exchange of letters, telex, telegrams or other means of telecommunication including communication through electronic means which provide a record of the agreement; or (c) an exchange of statements of claim and defence in which the existence of t....
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....h the second respondent and Indowind for the appointment of an arbitrator. Indowind resisted the petition on the ground that it was not a party to the agreement between the first and second respondent. The application was allowed by the Chief Justice of the Madras High Court by observing that prima facie Indowind was a party after lifting the corporate veil and noticing Indowind's intention to be bound by the sale agreement. Two issues were framed by this Court for consideration: "(i) Whether an arbitration clause found in a document (agreement) between two parties, could be considered as a binding arbitration agreement on a person who is not a signatory to the agreement; (ii) Whether a company could be said to be a party to a contract containing an arbitration agreement, even though it did not sign the agreement containing an arbitration clause, with reference to its subsequent conduct" Justice R V Raveendran, speaking for the two-judge Bench in Indowind (supra) held that if Indowind had acknowledged or confirmed in any correspondence, agreement or document that it was a party to the arbitration agreement between the first and second respondent or that it was bound by the arb....
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....gation towards another party or whether any person had committed a breach of contract, will be possible in a suit or arbitration proceeding claiming damages or performance. But the issue in a proceeding under Section 11 is not whether there was any contract between the parties or any breach thereof. A contract can be entered into even orally. A contract can be spelt out from correspondence or conduct. But an arbitration agreement is different from a contract. An arbitration agreement can come into existence only in the manner contemplated under Section 7. If Section 7 says that an arbitration agreement should be in writing, it will not be sufficient for the petitioner in an application under Section 11 to show that there existed an oral contract between the parties, or that Indowind had transacted with Wescare, or Wescare had performed certain acts with reference to Indowind, as proof of arbitration agreement. [...] 24. It is no doubt true that if Indowind had acknowledged or confirmed in any correspondence or other agreement or document, that it is a party to the arbitration agreement dated 24-2-2006 or that it is bound by the arbitration agreement contained therein, it could ....
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....y, being one within a group of companies, can bind its non-signatory affiliates or sister or parent concerns, if the circumstances demonstrate that the mutual intention of all the parties was to bind both the signatories and the non-signatory affiliates. This theory has been applied in a number of arbitrations so as to justify a tribunal taking jurisdiction over a party who is not a signatory to the contract containing the arbitration agreement. [Russell on Arbitration (23rd Edn.)] 72. This evolves the principle that a non-signatory party could be subjected to arbitration provided these transactions were with group of companies and there was a clear intention of the parties to bind both, the signatory as well as the non-signatory parties. 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 the non-signatory parties." Noting that this would only be in exceptional cases, the Court in Chloro Controls (supra) held that these exceptions would be examined on the touchstone of: (i) A direct relationship to the party signatory to the arbitration agreement; (ii....
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.... the transactions a meaning consistent with the business sense which was intended to be ascribed to them. Therefore, factors such as the relationship of a non-signatory to a party which is a signatory to the agreement, the commonality of subject-matter and the composite nature of the transaction weigh in the balance. The group of companies doctrine is essentially intended to facilitate the fulfilment of a mutually held intent between the parties, where the circumstances indicate that the intent was to bind both signatories and non-signatories. 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." This Court in Cheran Properties (supra) also analysed academic literature that scrutinised adjudicatory trends across the world. It noted that the written intention to arbitrate between parties can extend to bind non-signatories with the aim to target the creditworthy member of the group of companies. However, the principle of separate legal personalities of companies also has t....
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....arties of the original arbitration agreement, by respecting the conscious intention of the parties to subject themselves to separate arbitration agreements under their individual contracts. This Court in Cheran Properties (supra) distinguished the factual situation in Duro Felguera (supra) by discerning the mutual intention of the parties and performance of the contract: "34. [.....] The principle which underlies Chloro Controls [Chloro Controls India (P) Ltd. v. Severn Trent Water Purification Inc., (2013) 1 SCC 641 : (2013) 1 SCC (Civ) 689] is that an arbitration agreement which is entered into by a company within a group of companies may bind non-signatory affiliates, if the circumstances are such as to demonstrate the mutual intention of the parties to bind both signatories and non-signatories. In applying the doctrine, the law seeks to enforce the common intention of the parties, where circumstances indicate that both signatories and non-signatories were intended to be bound. In Duro [Duro Felguera v. Gangavaram Port Ltd., (2017) 9 SCC 729 : (2017) 4 SCC (Civ) 764] , the case was held to stand on a different footing since all the five different packages as well as the corpor....
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....is of the "group of companies" doctrine, where the conduct of the parties evidences a clear intention of the parties to bind both the signatory as well as the non-signatory parties. Courts and tribunals have invoked this doctrine to join a non-signatory member of the group, if they are satisfied that the non-signatory company was by reference to the common intention of the parties, a necessary party to the contract." While elucidating the circumstances in which the group of companies doctrine could be invoked to bind the non-signatory, the Court held: "10.5. The group of companies doctrine has been invoked by courts and tribunals in arbitrations, where an arbitration agreement is entered into by one of the companies in the group; and the non-signatory affiliate, or sister, or parent concern, is held to be bound by the arbitration agreement, if the facts and circumstances of the case demonstrate that it was the mutual intention of all parties to bind both the signatories and the non-signatory affiliates in the group. The doctrine provides that a non-signatory may be bound by an arbitration agreement where the parent or holding company, or a member of the group of companies is a s....
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.... the agreement between MTNL and Canfina and there was "a clear and direct nexus" between the issuance of the bonds, their subsequent transfer by Canfina to Canara Bank and the cancellation of allotment by MTNL. Canfina was held to be a proper party to the proceedings. 23 Commentators have noted that a signed written agreement to submit a present or future dispute to arbitration does not exclude the possibility of an arbitration agreement binding a third party. A non-signatory may be bound by the operation of the group of companies doctrine as well as by the operation of the principles of assignment, agency and succession. Redfern and Hunter on International Arbitration, 5th Ed. - 2.13, pp. 89-90 A party, which is not a signatory to a contract containing an arbitration clause, may be bound by the agreement to arbitrate if it is an alter ego of a party which executed the agreement. This constitutes a departure from the ordinary principle of contract law that every company in a group of companies is a distinct legal entity. 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 stateme....
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....t when it works to its disadvantage." Tepper Realty Co. v. Mosaic Tile Co., 259 F.Supp. 688,692 (SDNY 1966). The direct benefits doctrine reflects that core principle by preventing a party from claiming rights under a contract but, at the same time, disavowing the obligation to arbitrate in the same contract. [....] By contrast, the intertwined estoppel theory looks not to whether any benefit was received by the non-signatory, but rather at the nature of the dispute between the signatory and the non-signatory, and, in particular whether "the issues the non-signatory is seeking to resolve in arbitration are intertwined with the agreement that the estoppel [signatory party] has signed....the intertwined estoppel theory has as its central aim the perseveration of the efficacy of the arbitration process is clear when one looks at the typical fact pattern of an intertwined estoppel case." John Fellas, Compelling Signatories to Arbitrate with Non-Signatories, New York Law Journal (March 28, 2022) (emphasis supplied) 26 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 ....
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....on-signatory to an arbitration agreement. The Tribunal held that it has no jurisdiction to investigate, enquire into or record any findings on the basis of ONGC's claim against JDIL. 29 The Tribunal had, by its order dated 7 July 2009, specifically held that the objections of JDIL to the production of documents sought by ONGC would be decided when the application under Section 16 was resolved. Yet in the interim award, ultimately, the Tribunal has directed that ONGC's application dated 5 January 2009 would stand deferred until the issue of jurisdiction is decided. ONGC was justified in submitting that its application for discovery and inspection should be heard first and disposed of on merits after which appropriate orders as regards joinder of parties could be issued to DEPL and JDIL. 30 By failing to consider the application for discovery and inspection, the Tribunal has foreclosed itself from inquiring into whether there was sufficient material to establish the application of the group of companies doctrine. The application for discovery and inspection was indeed relevant to the exercise which was being carried out by the Tribunal. ONGC's primary submissions for impleading JDI....
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....nce of a single economic unit comprising JDIL and DEPL; (iv) No directions could have been issued by the Tribunal on ONGC's application for discovery and inspection unless the Tribunal were to rule on the challenge to its jurisdiction which had to be decided first and hence the Tribunal was justified in concluding that the application filed by ONGC for discovery and inspection would be considered subsequently; (v) The decision in Indowind (supra) continues to hold the field. The group of companies doctrine is only an exception to the principle that a party who is not a signatory of the agreement cannot be subjected to arbitration; (vi) The broad approach of the court under Section 34 which is of non-interference with the arbitral award, must also govern an appeal under Section 37; and the same standard must apply to the latter as it applies to the former. The Arbitral Tribunal has ruled on its jurisdiction, pursuant to the application filed by JDIL under sub-section (1) of Section 16. Under sub-section (5), if the Arbitral Tribunal rejects such a plea, it must continue with the arbitral proceedings to make an arbitral award. Under sub-section (6), a party aggrieved by the arb....
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....ntal policy of Indian law; or (iii) The award conflicts with the most basic notions of morality or justice. 36 In Ssangyong Engineering (supra), this Court held that the expression "public policy of India" in Section 34 would mean "the fundamental policy of Indian law" as explained in Associate Builders v. DDA (2015) 3 SCC 49. Sub-section (2A) to Section 34, which was introduced by the Amending Act of 2016, provides for an additional ground of challenge in the case of a domestic award, namely the existence of a patent illegality apparent on the face of the award. Justice R F Nariman, speaking for the two-judge Bench, observed that: "34. What is clear, therefore, is that the expression "public policy of India", whether contained in Section 34 or in Section 48, would now mean the "fundamental policy of Indian law" as explained in paras 18 and 27 of Associate Builders [Associate Builders v. DDA, (2015) 3 SCC 49 : (2015) 2 SCC (Civ) 204] i.e. the fundamental policy of Indian law would be relegated to "Renusagar" understanding of this expression. This would necessarily mean that Western Geco [ONGC v. Western Geco International Ltd., (2014) 9 SCC 263 : (2014) 5 SCC (Civ) 12] expansio....
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....M Nataraj, ASG, urged that when an appeal arises under Section 37(2)(a) against an order of the arbitral tribunal accepting the plea under Section 16 that it has no jurisdiction, the parameters for the exercise of the appellate jurisdiction of the court would not be constricted by the principles which apply to a challenge to an arbitral award under Section 34. The ASG submitted that this is for a valid reason, which is that upon the acceptance of a plea that there is a lack of jurisdiction, the matter goes out of the fold of arbitration. Such a determination cannot be subject to the governing principles which apply to a challenge to an arbitral award under Section 34. 39 Sub-section (1) of Section 37 provides for appeals to the court against orders of the arbitral tribunal meeting one of the descriptions specified in clauses (a), (b) and (c). Sub-section (2) provides that an appeal shall also lie to the court from an order of the arbitral tribunal accepting a plea under sub-sections (2) or (3) of Section 16 (of a want of jurisdiction) and for granting or refusing a measure under Section 17. It is true that Parliament has not specifically constricted the powers of the court while c....
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....ements between ONGC and JDIL which are tabulated below: - S. No. Date of the Agreement Particulars 1. 23 December 2003 Agreement for Charter Hire of Drilling Unit NCY 2. 9 December 2004 Agreement for hiring of 2 sets of steerable downhole mud motors Equipment, Drilling jars and directional drilling services 3. 2 December 2006 Agreement for Charter Hire of Drilling Unit NCY 4. 17 August 2006 Agreement for Charter Hire of Drilling Unit "Noble Ed-Holt" JDIL invoked the arbitration on 4 February 2010 and an Arbitral Tribunal consisting of Ms Justice Sujata Manohar, Mr Justice B N Srikrishna and Mr Justice M S Rane was constituted. The Arbitral Tribunal rendered a final award on 9 October 2013 (the arbitral award in the second proceeding) in favour of JDIL and accepted its claim amounting to US$14,772,495.55 together with interest of 4% per annum from the date of the invoice until payment or realisation. ONGC instituted proceedings under Section 34 before the Bombay High Court. By a judgment dated 28 April 2015, a Single Judge of the Bombay High Court upheld the arbitral award. The appeals against the judgment of the Single Judge under Section 37 were pending when ONGC a....
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....itral Award in the second proceeding, the Arbitral Tribunal has also observed that the claims of JDIL were not disputed by ONGC. The award of the Arbitral Tribunal noted that: "The above claims of the Claimant are not denied by the Respondent ONGC. The defence of ONGC to the claims made by the Claimant in these arbitration proceedings is essentially to the effect that the Respondent is entitled to appropriate the sums payable by it to the Claimant under these 4 contracts against the claim of the Respondent against DEPL under its contract with DEPL." 43 The basis on which ONGC claimed the above adjustment was that DEPL and JDIL constitute one economic entity and that DEPL is a group company of JDIL. The Arbitral Tribunal rejected the submission of ONGC, observing thus : "It is contended by Mr Rajiv Kumar, learned senior counsel for the Respondent that the corporate veil should be lifted in order to treat the two companies as one because throughout, it was the Claimant which acted on behalf of DEPL. The Respondent has placed strong reliance on the case of State of UP v. Renusagar Power Co. and Another [1988 4 SCC 59]. The Supreme Court has observed that in the expanding horizon ....
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.... meetings and signed letters etc. only on behalf of DEPL and has signed these expressly on behalf of DEPL." 44 The Tribunal also observed that JDIL had not furnished any guarantee or letter of comfort to ONGC in respect of the liabilities of DEPL. The emails addressed by the Managing Director of JDIL to the owners of the vessel were not from an official email address but from personal email addresses. The Arbitral Tribunal held that there was no basis for the allegation that DEPL was incorporated to defraud the creditors. Thus, the Tribunal observed that JDIL and DEPL maintained a separate legal character throughout. 45 In the earlier proceedings instituted by ONGC against both DEPL and JDIL, the Arbitral Tribunal had by its interim award dated 27 October 2010 upheld JDIL's plea of a lack of jurisdiction and held that JDIL could not be impleaded. In paragraph 31 of the Arbitral Award in the second proceeding, dated 9 October 2013 between ONGC and JDIL, the Arbitral Tribunal adverted to the interim award 27 October 2010 in the first proceeding and agreed with those findings. The relevant extract reads as follows: "31. In the present case the Respondent ONGC had earlier initiated....
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....on. JDIL also led evidence, inter alia, of its manager in support of its assertion that there were neither any common directors between JDIL and DEPL nor did JDIL hold any shares in DEPL. 47 The above narration indicates that the batch of cases which has been transferred to this Court arises from a claim in arbitration by JDIL against ONGC under four contracts. The Arbitral Tribunal by its award dated 9 October 2013 (the Arbitral Award in the second proceeding) allowed the claim. ONGC did not plead any defence to the claim on merits. However, ONGC asserted a right to adjust the amounts which were due to JDIL against the claims which ONGC had against DEPL under a distinct contract. ONGC asserted that JDIL and DEPL form one common economic entity and that the group of companies doctrine would apply. Thus essentially, the grounds on which ONGC opposed JDIL's application under Section 16 in the first arbitral proceeding overlap with the basis on which ONGC sought adjustment of the claims due to JDIL in the second arbitral proceeding. There is thus a significant degree of overlap between the issues which arose before the first Arbitral Tribunal in its interim award dated 27 October 201....
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....indal Group of Companies which has a strong presence in the oil and gas sector and is engaged in off shore drilling for oil and gas; (v) Both DEPL and JDIL shared a common addresses and telephone numbers; (vi) DEPL was created by the Jindal Group with the definite purpose of rendering a particular service to the oil and gas sector and DEPL has indicated on the website that it works under the "fraternal hood of the said group"; (vii) DEPL is promoted and managed by the son and daughter in law of the Managing Director of JDIL; (viii) The bid submitted by DEPL was signed by G D Sharma as an authorized signatory who is an employee of JDIL; (ix) The Managing Director of JDIL, Mr Naresh Kumar, had negotiated with the owners of the vessel for hiring on behalf DEPL; (x) DEPL was incorporated in 2003; (xi) Mohan Ramanathan who attended the office of ONGC in connection with the subject contract was the General Manager of JDIL; and (xii) Almost all senior officers of JDIL including its Managing Director actively took part in matters relating to the hiring of the vessel, its deployment, performance and related issues. Therefore, a corporate, financial and functional unity exist....
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....eement was only between ONGC and DEPL and that in terms of Section 7, an agreement to arbitrate is between the parties to the agreement. While observing that the arbitration agreement was only between DEPL and ONGC, the Tribunal held that neither was there an arbitration agreement between ONGC and JDIL nor was JDIL a signatory to the agreement between ONGC and DEPL. After noting the documents which were relied upon by ONGC, the Tribunal held that there was "no tickle of evidence to indicate that JDIL", a distinct incorporated legal entity, ever played any role to find itself in the contract between JDIL and ONGC. The executives of JDIL who participated in the contractual dealing were held to be representatives of DEPL. Reading the interim award dated 27 October 2010 of the first Arbitral Tribunal, the unmistakable impression which emerges from the record is that the primary basis for the determination of an absence of jurisdiction is that the arbitration agreement was between ONGC and DEPL. The legal foundation of the group of companies doctrine has not been evaluated, on facts or law. True enough, the judgment of this Court in Cholo Controls (supra) is of 2013, Cheran Properties (....
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....o be set aside; (iii) The plea by JDIL that the Arbitral Tribunal lacks jurisdiction would have to be decided afresh. In this regard, this Court was informed that one of the three arbitrators has died and that the Arbitral Tribunal cannot be reconstituted. We accordingly direct that ONGC and JDIL shall each nominate their arbitrators within a period of two weeks from the date of this judgment while the two arbitrators shall nominate and appoint the third arbitrator. The Arbitral Tribunal so reconstituted shall decide afresh upon the plea of JDIL in regard to the absence of jurisdiction after furnishing to the parties the opportunity of leading any further evidence or seeking the production of further documentary material on the record. The evidence and documentary evidence which has been already adduced before the earlier Arbitral Tribunal shall however form part of the record of the newly constituted Tribunal; (iv) As regards the cases which have been transferred to this Court, we would order and direct that these cases be remitted back to the Bombay High Court. The decision on those appeals which arose from the dismissal by the Single Judge of the petition under Section 34 ch....