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Abstract:
The decision of Cox& Kings Ltd. v. SAP India Pvt. Ltd. [“Cox & Kings Ltd.”] 2 has brought the issue of incorporating third parties to arbitration in to the foray, by referring this issue to a five- judge bench to decide the matter authoritatively. Several questions, such as, reconciliation of extension of arbitral agreement with party autonomy and other basic tenets of arbitration, and legitimacy of this practice under the scheme of Arbitration and Conciliation Act 1996, have been raised. While the third-party extension is invaluable in the present-day complex structure of transactions, lately the essentials and contours of this practice have been muddled up through various decision of the Apex Court. In this context, the feasibility and legitimacy of ‘group of companies’ doctrine, which has been questioned in the case of Cox & Kings Ltd., has to be reassessed. In addition to dealing with this issue, the authors will also attempt to delineate the essentials required for the application of this doctrine. Furthermore, this article attempts to point out the flagrant errors committed by Apex Court in 'Chloro Controls India (P) Ltd. v. Severn Trent Water Purification Inc. & Anr. [“Chloro Control Case”] 3 , wherein a confusion between the concepts of Joinder and Consolidation was apparent. Apart from this, a distressing pattern in application of this doctrine is flagged out in the post Chloro Control precedents. In conclusion, the authors are of the view that the five-judge bench referring the matter will have a lot of issues to settle conclusively, while keeping in mind the commercial need of the group of companies’ doctrine.

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Cite this as: Vedaant Agarwal & Shivankar Sukul, “Analyzing “The Sukul, “Analyzing the Feasibility & Legitimacy of third-party extension of Arbitration Agreement in the Indian Arbitration Regime” 3 3 IRIArb (2023).

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Keywords:Arbitral agreement, feasibility, Indian Arbitration regime,

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*The views expressed are of author(s) only.

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