LexCHLORO CONTROLS (I) P. LTD. versus SEVERN TRENT WATER PURIFICATION INC. AND ORS.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
A B [2012) 13 S.C.R. 402 CHLORO CONTROLS (I) P. LTD. v. SEVERN TRENT WATER PURIFICATION INC. AND ORS. (Civil Appeal No. 7134 of 2012) SEPTEMBER 28, 2012 [S.H. KAPADIA, CJI., A.K. PATNAIK AND SWATANTER KUMAR, JJ.] Arbitration and Conciliation Act, 1996: s. 45 - Reference! to arbitration under - Scope of - International commercial arbitration - Multi-party agreements - Joint venture agreements with different parties - Some of the agreements contained arbitration clause while the others did not - Dispute betw1~en parties leading to filing of suit - D High Court referred the entire suit (including the non-signatory parties to the arbitration agreement) for arbitration uls. 45 - Joinder of non-signatory parties to arbitration - Permissibility - Held: Joinder of non-signatory parties to arbitration is permissible - They can be referred to arbitration, provided El they satisfy the pre-requisites ulss. 44 and 45 rlw Schedule I of the Act - The cases of group companies or where various agreements constitute a composite transaction with intrinsically interlinked cause of action, can be referred to arbitration, even if the disputes exist between signatory or F even non-signatory parties - However, the discretion of the court has to be exercised in exceptional, limiting, befitting and cases of necessity and very cautiously - Expression 'any person claiming through or under him' used in s. 45, takes within its ambit persons who are in legal relationships via GI multiple and multi-party agreements, though they may not all be signatories to the arbitration clause - In the present case, the corporate structure of the companies demonstrates a definite legal relationship between the parties to the /is or persons claiming under them - Their contractual relationship H 402 CHLORO CONTROLS (I) P. LTD. v. SEVERN TRENT 403 WATER PURIFICATION INC. spells out the terms, obligations and roles of the respective A parties which they were expected to perform for attaining the object of successful completion of the joint venture agreement - All the other agreements were intrinsically inter-connected with the mother agreement - All the agreements were part of a composite transaction to facilitate implementation of B principal agreement - Hence, all the parties to the /is were covered under expression "any person claiming through or under" the principal (mother) agreement - Arbitration clause in the principal agreement was comprehensive enough to include all disputes arising ·under and in connection with" c principal agreement - Conduct of parties and even subsequent events show that the parties had executed, intended and actually implemented composite transaction contained in principal/mother agreement - Hence, direction to refer the disputes to arbitration -Convention on Recognition 0 and Enforcement of Foreign Arbitral Awards (New York Convention) - Article II (3) - ICC Rules - UNCITRAL Model Rules. s. 45 - Issues under - Determination of - Issue of jurisdiction should be decided at the beginning of the E proceedings itself and they should have finality - Determination of fundamental issues as contemplated u/s. 45 at the very first instance is not only appropriate but is also the legislative intent - Jurisdiction. Code of Civil Procedure, 1908 - s. 9 - Jurisdiction of civil F courts - Jurisdiction of the court and the right to a party emerging from s. 9 is not an absolute right, but contains inbuilt restrictions - Civil courts have jurisdiction to try all suits except those which is either expressly or impliedly baffed - The provisions of s. 45 of the 1996 Act would prevail over the G provisions of CPC - Arbitration and Conciliation Act, 1996 - s. 45. Doctrines/Principles: 'Group of Companies' Doctrine; Principle of 'incorporation H 404 SUPREME COURT REPORTS [2012] 13 S.C.R. A by reference'; Principle of 'composite performance'; Principle of 'agreements within an agreement' and Principle of 'Kompetenz kompetenz' - Discussed. Precedent - Observations - Precedential value - Held: The obseNations to be construed and read to support the B ratio decidendi - They would not constitute valid precedent as it would be hit by the doctrine of stare decisis - Doctrine - Constitution of India, 1950 - Art. 141. Words and Phrases: C Expression 'connection' - Meaning of. The questions which inter alia arose for consideration in the pr1esent appeals were: (1) What is the ambit an
Excerpt shown. Read the full judgment & AI analysis in Lexace.