Unraveling Legal Ambiguity: Exploring The Dynamics Of The 'Group Of Companies' Doctrine In India

Sneha Arora & Nitik Dhenwal, Himachal Pradesh National Law University, Shimla

ABSTRACT

The ‘Group of Companies’ doctrine has emerged as a significant legal concept in the international arena. With its roots tracing back to France, the concept garnered attention gradually for its cross-border transactions. Of particular interest is the recent judgment of Cox and Kings Ltd. v. SAP India (P) Ltd. & Anr. (hereinafter referred to as “Cox & Kings”) of the Apex Court that addressed ambiguities and inconsistencies that previously clouded the application of this doctrine in the Indian Arbitration landscape.

This paper meticulously examines the evolution of the doctrine, examining its divergent application in other jurisdictions and the landmark Cox & Kings judgment, which clarified its scope and applicability to third parties in the Indian context.

The genesis of the doctrine can be traced back to the Dow Chemical v. Isover St. Gobain case, where the ICC arbitral tribunal laid the groundwork for recognizing the economic reality of conglomerates and their mutual intentions in enforcing arbitration clauses. This seminal decision set a precedent for considering the broader context of group dynamics in contractual disputes, a principle that resonated with the needs of international commerce.

Furthermore, this paper delves into the analysing the potential consequences of application of this doctrine in the realm of arbitration.

In conclusion, this research paper contributes to the understanding of the 'Group of Companies' doctrine in international law and its implications for the evolving landscape of corporate governance and dispute resolution by providing clarity on the doctrine's application and implications within the Indian legal framework.

Keywords: Arbitration, Dispute Resolution, Company Law, ‘Group of Companies’ doctrine