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 signatory to the arbitration agreement and the non-signatory party, commonality of the subject-matter, the composite nature of the transaction, and the performance of the contract.

JUDGMENT :

CHANDRA DHARI SINGH, J.

The petitioner vide the present petition under Section 34 of the Arbitration & Conciliation Act, 1996, (hereinafter referred to as ‘the Act’) has sought the following reliefs:

“a) allow the present petition and consequently set aside the Impugned Arbitral Award dated 31.05.2020 pronounced on 01.06.2020 passed by learned Sole Arbitrator Hon'ble Mr. Justice [Retd] V.K. Bali;

b) Pass such other order/orders as this Hon'ble Court may deem fit and proper in the facts and circumstances of the case:”

FACTUAL MATRIX

2. The brief facts of the case are that before the learned Arbitral Tribunal, two claim petitions bearing No. DAC/2085A/06-18 and DAC/20858/06-18 were filed. The counter claims have also been filed between the same parties. Both the claims have been decided by the learned Arbitral Tribunal by a common award. The learned counsel appearing on behalf of the parties had also consented that both the claim petitions could be decided by way of passing a common award.

3. M/s. Avon Health Care Private Limited, the respondent herein and the claimant before the learned Arbitral Tribunal, is a company incorporated under the Companies Act, 1956 whereas the petitioner M/s. Trade International is a Sole Proprietorship of one Mr. P.K. Handa.

4. The respondent herein, i.e., the claimant before the learned Arbitral Tribunal, is engaged in the business of promoting, providing, acquiring, buying, selling, converting developing and erecting health care systems including medical equipments for bio-medical waste management systems. The petitioner herein i.e., the respondent before the learned Arbitral Tribunal, is a sole proprietorship of Mr. P.K. Handa, represented previous constituents of claimant that it is sole authorized distributor and representative in India for all products of Medical Coaches Inc. [MCI] a company established and incorporated under the Laws of United States of America. The petitioner herein (the respondent before the learned Arbitral Tribunal) was also given to understand that Positive Impact Waste Solution Inc. located at New Jersey, U.S.A. (hereinafter referred to as ‘PIWS’) was engaged in manufacturing of bio-medical waste processing equipments and chemicals. The petitioner herein (the respondent before the learned Arbitral Tribunal) intended to appoint the claimant, i.e., the respondent herein, as sub-representative for undertaking promotion and sales of the products of PIWS. During negotiations, the previous constituents of the claimant, i.e., the respondent herein, were assured that they would be able to make profit of Rs. 50,00,000/- per machine which would be supplied vide the intended Sub Representative Agreement. In addition to aforesaid profit, the claimant, i.e., the respondent herein, would also be entitled to commission @ 8% on executed sales.

5. The petitioner herein (the respondent before the learned Arbitral Tribunal) also represented that though it was a distributor of MCI but it would be fully responsible for the products supplied to the claimant, i.e., the respondent herein, and the claimant, i.e., the respondent herein, would not have any privity of contract with actual manufacturers. Based on representations and assurances of the petitioner herein (the respondent before the learned Arbitral Tribunal) mentioned hereinbefore, the previous constituents of claimant, i.e., the respondent herein, entered into Sub Representative Agreement dated 1st November, 2012 with the petitioner herein (the respondent before the learned Arbitral Tribunal) by virtue of which the claimant, i.e., the respondent herein, was to undertake sale promotion activities of PIWS 3000 in the territories of Haryana, Punjab, Chandigarh, Himachal Pradesh, Uttarakhand and Jammu & Kashmir for a period of four years. In consideration of the said undertaking, previous constituents of claimant, i.e., the respondent herein, made initial payment of Rs. 12,50,000/- immediately upon execution of the agreement. The bala