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IN THE HIGH COURT OF DELHI AT NEW DELHI
Chandra Dhari Singh, J.
M/s Trade International – Appellant
Versus
M/s Avon Healthcare Pvt. Ltd. – Respondent
O.M.P. (COMM) 456 of 2020
Decided On : 23-05-2023
Review Petition - Arbitration Act - Section 34 of the Arbitration and Conciliation Act, 1996 - [Section 34 of the Arbitration Act] - The court dismissed the review petition seeking to review the judgment passed in a petition under Section 34 of the Arbitration Act. The petitioner raised grounds related to the erroneous adjudication of the Group of Companies doctrine, the severability of the petitioner and a third entity, and the non-consideration of arguments advanced on behalf of the petitioner. The court held that the review jurisdiction is limited and cannot be exercised on the ground that the decision was erroneous on merits. The court found that the petitioner failed to show any error apparent on the face of the record, and therefore dismissed the review petition.
Fact of the Case:
The petitioner sought review of the judgment passed in a petition under Section 34 of the Arbitration Act, claiming that the court failed to consider the arguments raised on behalf of the petitioner, and that the doctrine of 'Group of Companies' was not correctly applied.
Finding of the Court:
The court found that the review jurisdiction is limited and cannot be exercised on the ground that the decision was erroneous on merits. The court held that the petitioner failed to show any error apparent on the face of the record, and therefore dismissed the review petition.
Issues: The issues raised in the review petition pertained to the erroneous adjudication of the Group of Companies doctrine, the severability of the petitioner and a third entity, and the non-consideration of arguments advanced on behalf of the petitioner.
Ratio Decidendi: The court held that the review jurisdiction is limited and cannot be exercised on the ground that the decision was erroneous on merits. The court found that the petitioner failed to show any error apparent on the face of the record, and therefore dismissed the review petition.
Final Decision: The court dismissed the review petition seeking to review the judgment passed in a petition under Section 34 of the Arbitration Act, as the petitioner failed to show any error apparent on the face of the record.
ORDER
Chandra Dhari Singh, J. (Oral)
I.A. 10101/2023 (Exemption)
Exemption allowed subject to just exceptions.
The application stands disposed of.
REVIEW PET. 146/2023
1. The instant review petition under Section 114 and Order XLVII of the Code of Civil Procedure, 1908 (hereinafter "CPC") has been filed on behalf of the review petitioner (hereinafter "the petitioner") seeking the following reliefs:
"(a) allow the present Petition seeking review of the Judgment and Order dated 26.04.2023 passed by this Hon'ble Court in OMP(COMM) No. 456/2020; and
(b) allow such other and/or further order(s) as the nature and circumstances of the present case may require."
2. The petitioner has sought review of the judgment passed in the captioned petition on 26th April 2023 whereby this Court dismissed the objections filed by the petitioner under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter "the Arbitration Act") against the Award dated 31st May 2020.
Submissions on behalf of the petitioner
3. The learned counsel for the petitioner submitted that this Court while passing the judgment under review has failed to consider the arguments which were raised on behalf of the petitioner. It is submitted that while arguing the objections against the impugned Award it was not the case of the petitioner that the doctrine of `Group of Companies' was not applicable on the facts of the case but the arguments were advanced on the manner in which the said doctrine would be applicable. Further, it is submitted that the doctrine could only be applied for the limited purpose of joinder of a third party to the arbitration proceedings in cases when there is arbitration agreement with one party but no arbitration with another concern or connected party. In the present case, the respondent had separate arbitration agreement with the petitioner and M/s Snowcross Healthcare Pvt. Ltd. Therefore, even if the doctrine was to be applied, it would have been necessary to make M/s Snowcross Healthcare Pvt. Ltd. a party with respect to agreement dated 1st November 2012 before the Arbitral Tribunal.
4. It is submitted that the petitioner is facing an arbitral award for an alleged breach of contract by the other entity, i.e., M/s Snowcross Healthcare Pvt. Ltd, which was never made a party to the arbitration proceedings and has not had the chance to defend its case.
5. It is further submitted that the judgment under review does not appreciate that the petitioner, a proprietorship firm of Mr. P.K. Handa and M/s Snowcross Healthcare Private Limited, which is a private company incorporated under the Companies Act are two entirely different entities in the eye of law, whereas, the doctrine of Group of Companies is applicable when there are two companies within the same group and not to individuals/proprietorship firms.
6. Another ground for seeking review of the judgment by the petitioner is regarding non-joinder of a necessary party. It is submitted that only the disputes qua the Sub-Representative Agreement dated 1st November 2012 and Sub-Distribution Agreement dated 1st November 2012 entered into between the petitioner and the respondent/claimant have been submitted for adjudication before the Arbitral Tribunal and therefore, the adjudication of dispute qua any breach emanating from the Purchase Order dated 1st January 2014 and the Proforma Invoice dated 22nd January 2014 entered into between M/s Snowcross Healthcare Pvt. Ltd and the respondent by the Arbitral Tribunal was without jurisdiction.
7. The learned counsel submitted that the Court failed to consider that the Arbitral Tribunal acted beyond the terms of the Contract between the parties. The Arbitral Tribunal had no power to travel beyond the Contract and act without jurisdiction. The learned Tribunal failed to consider that the petitioner and M/s Snowcross Healthcare Pvt. Ltd are separate legal entities in law and are distinct from one and another, as recognized in the agreement entered with Positiv
The review jurisdiction is limited and cannot be exercised on the ground that the decision was erroneous on merits. The petitioner must show error apparent on the face of the record to seek a review.
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....
Review of a judgment requires an error apparent on the face of the record, not merely an error revealed through extensive reasoning.
(1) Review of judgments or orders by Supreme Court – Supreme Court would have power to review any judgment or order made by it subject to provisions of any law made by Parliament or any Rules made un....
The court emphasized the limited scope of review power, the need for an error apparent on the face of the record, and the applicability of the provisions of the Arbitration & Conciliation Act to the ....
Review jurisdiction is not an appeal; it addresses only material errors apparent on record, not new arguments or hearsay.
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