COX AND KINGS LTD. versus SAP INDIA PVT. LTD. & ANR.

Citation: [2023] 15 S.C.R. 621 · Decided: 06-12-2023 · Supreme Court of India · Bench: D.Y. CHANDRACHUD

Cited by 10 judgment(s) · cites 47 · see the full citation network in Lexace

Judgment (excerpt)

[2023] 15 S.C.R. 621 : 2023 INSC 1051
621
COX AND KINGS LTD.
v.
SAP INDIA PVT. LTD. & ANR.
(Arbitration Petition (Civil) No. 38 of 2020)
DECEMBER 06, 2023
[DR DHANANJAYA Y CHANDRACHUD, CJI, 
HRISHIKESH ROY, PAMIDIGHANTAM SRI NARASIMHA, 
J B PARDIWALA AND MANOJ MISRA, JJ.]
HEADNOTES
Issues for consideration:
The primary issue for consideration of the present Constitution 
Bench of Five Judges was determination of the validity of the ‘Group of 
companies doctrine’ in Indian arbitration jurisprudence and its applicability 
to proceedings under the Arbitration and Conciliation Act, 1996. Earlier, 
the Group of Companies doctrine had been adopted and applied in Indian 
arbitration jurisprudence in Chloro Controls case, where a three Judge Bench 
of the Supreme Court had read the said doctrine into the phrase “claiming 
through or under” in Section 45 of  the Arbitration and Conciliation Act, 1996.
The ‘Group of companies doctrine’ provides that an arbitration 
agreement which is entered into by a company within a group of companies 
may bind non-signatory affi  liates, if the circumstances are such as to 
demonstrate the mutual intention of the parties to bind both signatories and 
non-signatories. This doctrine was called into question purportedly on the 
ground that it interfered with the established legal principles such as party 
autonomy, privity of contract, and separate legal personality.
Also, there were ancillary issues such as: (i) whether the Arbitration 
and Conciliation Act, 1996 allows joinder of a non-signatory as a party 
to an arbitration agreement;  (ii) whether Section 7 of the Arbitration and 
Conciliation Act, 1996 allows for determination of an intention to arbitrate 
on the basis of the conduct of the parties; and (iii) interpretation of the phrase 
“claiming through or under” appearing under Sections 8, 35 and 45 of the 
Arbitration and Conciliation Act, 1996.
Ed. Note: Hon’ble Dr. Dhananjaya Y. Chandrachud, CJI pronounced judgment on behalf 
of his Lordship, Hon’ble Mr. Justice Hrishikesh Roy, Hon’ble Mr. Justice J.B. Pardiwala 
and Hon’ble Mr. Justice Manoj Misra. Hon’ble Mr. Justice Pamidighantam Sri Narasimha 
pronounced a separate concurring judgment.
 
SUPREME COURT REPORTS 
[2023] 15 S.C.R.
622
Arbitration – Arbitration agreement – Consent as the basis for 
arbitration:
Held (per Dr. Dhananjaya Y Chandrachud, CJI) (for himself, 
Hrishikesh Roy, J B Pardiwala and Manoj Misra, JJ.): Consensus ad idem 
between the parties forms the essential basis to constitute a valid arbitration 
agreement – Since consent forms the cornerstone of arbitration, a non-
signatory cannot be forcibly made a “party” to an arbitration agreement as 
doing so would violate the sacrosanct principles of privity of contract and 
party autonomy. [Paras 60, 63]
Arbitration and Conciliation Act, 1996 – s.2(1)(h) r/w s.7 – 
Defi nition of “parties”:
Held (per Dr. Dhananjaya Y Chandrachud, CJI) (for himself, 
Hrishikesh Roy, J B Pardiwala and Manoj Misra, JJ.): The defi nition of 
“parties” under Section 2(1)(h) read with Section 7 of the Arbitration Act 
includes both the signatory as well as non-signatory parties. [Para 165]
Arbitration – Parties to an arbitration Agreement – Method to 
fi gure out:
Held (per Dr. Dhananjaya Y Chandrachud, CJI) (for himself, 
Hrishikesh Roy, J B Pardiwala and Manoj Misra, JJ.): The signature of a 
party on the agreement is the most profound expression of the consent of a 
person or entity to submit to the jurisdiction of an arbitral tribunal – However, 
the corollary that persons or entities who have not signed the agreement are 
not bound by it may not always be correct – The issue of who is a “party” 
to an arbitration agreement is primarily an issue of consent. [Para 66]
Words and Phrases – Arbitration agreement – Term “non-
signatories” – Meaning of:
Held (per Dr. Dhananjaya Y Chandrachud, CJI) (for himself, 
Hrishikesh Roy, J B Pardiwala and Manoj Misra, JJ.): The term “non-
signatories”, instead of the traditional “third parties”, seems the most 
suitable to describe situations where consent to arbitration is expressed 
through means other than signature – A non-signatory is a person or entity 
that is implicated in a dispute which is the subject matter of an arbitration, 
although it has not formally entered into an arbitration agreement – Non-
623
signatories, by virtue of their relationship with the signatory parties and 
active involvement in the performance of commercial obligations whi

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