Arbitration Weekly Round-Up: 4th December To 10th December

Supreme Court Principle Of 'Alter Ego' Or 'Piercing Corporate Veil' Not The Basis For 'Group Of Companies' Doctrine: Supreme Court Case: Cox and Kings Ltd v. SAP India Pvt Ltd | ARBIT. PETITION No. 38/2020 Citation: 2023 LiveLaw (SC) 1042 While approving the 'group of companies' doctrine in the arbitration law jurisprudence, the Supreme Court clarified that the principle of "alter ego" or "piercing the corporate veil" cannot be the basis for applying this doctrine. The Constitution Bench comprising Chief Justice of India DY Chandrachud, Justice Hrishikesh Roy, PS Narasimha, JB Pardiwala and Manoj Misra was answering a reference which doubted the "group of companies" doctrine which allows non-signatory companies to be bound by arbitration agreement. The judgment, authored by CJI Chandrachud, explained that the "group of companies" doctrine does not dilute the separate corporate identity of different companies; its application is based on the conduct of non-signatories, which indicate an intention to be bound by the arbitration agreement. Arbitration Agreement Can Bind Non-Signatories: Supreme Court Upholds 'Group Of Companies' Doctrine Case: Cox and Kings Ltd v. SAP India Pvt Ltd | ARBIT. PETITION No. 38/2020 Citation: 2023 LiveLaw (SC) 1042 A Constitution Bench of the Supreme Court on Wednesday (December 6) held that an arbitration agreement can bind non-signatories as per the "group of companies" doctrine. "The 'group of companies' doctrine must be retained in the Indian arbitration jurisprudence considering its utility in determining the intention of the parties in the context of complex transactions involving multiple parties and multiple agreements," the Court observed. Allahabad High Court Allahabad High Court Holds That Improper Notice Invalidates Ex-Parte Arbitral Award Case Title: Bharat Pumps and Compressors Limited v. Chopra Fabricators & Manufacturers Pvt Ltd, Appeal U/S 37 of the A&C Act No. 146 of 2022 Neutral Citation: 2023:AHC:228958 The Allahabad High Court has held that improper notice of arbitration invalidates an arbitration award passed ex-parte. The bench of Justice Rohit Ranjan Agarwal held that Section 14(2) of the Arbitration Act, 1940 requires that notice be given to the parties after the arbitrators or umpire have signed the award. Without proper notice, the court held that the proceedings leading to the judgment making the award rule of the court would be flawed. Allahabad High Court Upholds The Termination Of The Arbitrator's Mandate, Citing An Unjustified Eight-Year Delay In Proceedings Case Title: Amit Agarwal v. Atul Gupta, Matters under Article 227 No. 11263 of 2023 The Allahabad High Court has upheld the termination of the Arbitrator's mandate, citing an unjustified eight-year delay in proceedings. The bench of Justice Rohit Ranjan Agarwal observed that the arbitrator sat over the arbitral proceedings for 8 long years without any progress and passed the award in haste after the application seeking its removal was made. Ergo, the Court held that the arbitrator acted in breach of Section 14 and its mandate stands terminated under the said provision. Bombay High Court Court U/S 37 Of The A&C Act Can't Undertake An Independent Assessment Of Arbitral Award,: Bombay High Court Case Title: Madgavkar Salvage v. Bergen Offshore Logistics Pvt Ltd, Comm. Arbitration Petitioner No. 13 of 2015. The High Court of Bombay has held that under Section 37 of the A&C Act, the challenge must be related to the impugned order passed under Section 34 of the Act and not merely to the arbitral award. It held that it is incumbent upon a party to point out errors in the order under Section 34 to make out a case in appeal under Section 37. The bench of Chief Justice Devendra Kumar Upadhyaya and Justice Arif. S. Doctor held that the Court while exercising powers under Section 37 of the A&C Act cannot take an independent assessment of the arbitral award, therefore, the challenge must be premised on the errors in the impugned order under Section 34. It held that it is not permissible for a party to challenge an arbitral award de hors any challenge to the impugned order. Court Can Extend Period Of Arbitral Tribunal Even If Application Is Made After Time Limit: Bombay High Court Case Title: Nikhil H. Malkan v. Standard Chartered Investment and Loans (India) Limited, Arbitration Petition (Lodging) No. 28255 of 2023 The High Court of Bombay has held that Section 29A permits the court to extend the mandate of the arbitral tribunal even when the application is made after the expiry of time limit provided therein. The bench of Justice Manish Pitale clarified that Section 29A(4) allows the Court to extend the arbitrator's mandate either before or after the specified period's expiry, provided sufficient grounds are demonstrated. The purpose is to ensure the...

Arbitration Weekly Round-Up: 4th December To 10th December

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