SUPREME COURT OF INDIA
N.V. RAMANA, CJI., A.S. BOPANNA, SURYA KANT, JJ.
Cox and Kings Limited - Petitioner
Versus
SAP India Private Limited & Another - Respondents
Arbitration Petition (Civil) No. 38 of 2020
Decided On : 06-05-2022
| Table of Content |
|---|
| 1. factual background of license agreements and performance issues. (Para 3 , 4 , 6) |
| 2. initiation of arbitration and role of parties involved. (Para 7 , 8) |
| 3. arguments from both parties regarding the arbitration and claims. (Para 11 , 12 , 13) |
| 4. court's examination of the group of companies doctrine. (Para 14 , 15 , 16) |
| 5. discussion on the nature and applicability of arbitration agreements. (Para 17 , 18 , 19) |
| 6. judicial authority power under section 45 of the arbitration act. (Para 20 , 21 , 22) |
| 7. clarification on group of companies doctrine and judicial intent. (Para 23 , 24 , 25) |
| 8. further evolution and application of group of companies doctrine. (Para 26 , 27 , 28) |
| 9. critical examination of decisions regarding group of companies doctrine. (Para 29 , 30 , 32) |
| 10. complexities in applying group of companies doctrine in arbitration. (Para 33 , 34 , 35 , 36 , 37 , 38 , 39 , 40 , 41 , 42) |
| 11. referral to a larger bench for clarification of key legal questions. (Para 49 , 50) |
JUDGMENT :
N.V. Ramana, CJI.
This petition calls on us to examine the 'group of companies doctrine'. In particular, it requires us to examine whether the principles of party autonomy under arbitration law and corporate personality in company law have been adequately safeguarded in outlining the scope and applicability of the doctrine being followed at present in Indian jurisprudence.
2. The present Arbitration Petition has been preferred by the Petitioner-Applicant under Section 11 (6) and Section l1(12)(a) of the Arbitration and Conciliation Act, 1996 (hereinafter the "Arbitration Act"), for appointment of an Arbitral Tribunal in terms of the provisions of the Arbitration Act, on the ground that there has been a failure with respect to the appointment of an Arbitral Tribunal in accordance with the agreements between the parties.
3. The facts necessary for the adjudication of the dispute are as follows: on 14.12.2010, the Applicant and Respondent No. l entered into an SAP Software End User License Agreement and SAP Enterprise Support Schedule under which the Applicant was made a licensee of certain ERP software developed and owned by the Respondents. This is an overall licensing agreement that all customers of the Respondents have to enter into compulsorily in advance in order to utilize any software of the Respondents. In 2015, while the Applicant was developing its own e-commerce platform, the Respondents approached the Applicant and recommended their Hybris Solution as it would be 90% compatible with the Applicant's software. The Respondents indicated that the remaining 10% customisation would take only 10 months, a much shorter solution than the Applicant developing the software itself.
4. The aforesaid agreement was divided into 3 separate transactions: first, the Software License and Support Agreement- Software Order Form 3, dated 30.10.2015, was signed between the Applicant and Respondent No. 1 for the purchase of the SAP Hybris Software License. Second, an agreement dated 30.10.2015 was signed between the parties containing the terms and conditions governing the implementation of the SAP Hybris software. This agreement is called the Services General Terms and Conditions Agreement ("GTC"). Third, on 16.11.2015, an agreement was entered into for the customization of the software.
5. Clause 15.7 of the GTC contains the arbitration clause which we are concerned with in the present matter. The clause reads as follows:
"15.7 Dispute Resolution: In the event of any dispute or difference arising out of the subject matter of this Agreement, the Parties shall undertake to resolve such disputes amicably. If disputes and differences cannot be settled amicably then such disputes shall be referred to bench of three arbitrators, where each party will nominate one arbitrator and the two arbitrators shall appoint a third arbitrator. Arbitration award shal
The Group of Companies doctrine allows binding non-signatories to arbitration agreements based on mutual intent, assessed through their conduct and involvement in the contractual relationship, withou....
The Group of Companies Doctrine can be invoked to bind a non-signatory party to an arbitration agreement if there is a mutual intent of the parties, a direct relationship between the party which is a....
Scope of an arbitration agreement is limited to the parties who entered into it and those claiming under or through them, Courts under English Law have, in certain cases, also applied the 'Group of C....
An application for leave to defend in a summary suit constitutes the 'first statement on the substance of the dispute' under the Arbitration and Conciliation Act. Participating in court proceedings b....
Non-signatories can be bound by arbitration agreements based on their conduct and involvement in the contractual relationship.
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