Anant Vijay, Jindal Global Law School
ABSTRACT
The forum of arbitration is intrinsically based on the principle of party autonomy, where two parties enter into an arbitration agreement to refer their future disputes to an arbitral tribunal. These disputes usually involve a series of transactions often based on multi-party contracts. Such disputes are complex in nature as they involve big national and multinational corporations that have their subsidiaries performing their contractual obligations for them. Thus, to impose liability on these subsidiaries and to ensure the fair resolution of such kinds of disputes, the joinder of non-signatories to these disputes is necessary. It is in this context, that the Group of Companies Doctrine was introduced in France in the Dow Chemicals1 case in 1984. Subsequently, it was adopted in India in the Chloro Controls2 case in 2013. In these ten years of Indian Law, statutes have been amended and courts have interpreted them to widen the scope of this doctrine. This has resulted in the overlap of questions of economy with that of questions of law. In this essay, we will trace the development of this doctrine and shed light on the contradictions, the irregularities, and their overlap with the discipline of economics. Finally, we will look at the recent observation made by the Supreme Court in the Cox and Kings3 case that expressed the need for a relook at this doctrine.
Keywords: Group of Companies, Party Autonomy, Parent-Subsidiary Relationship, Implied Consent, Party Intent, Composite Transactions, Separate Legal Personality, Single Economic Entity
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