Comparative Guides
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Results: 4 Answers
International Arbitration
7.
Consolidation and third parties
7.1
Does the law in your jurisdiction permit consolidation of separate arbitrations into a single arbitration proceeding? Are there any conditions which apply to consolidation?
 
India
There is no provision in the Arbitration Act relating to the consolidation of arbitration proceedings under one or more contracts; however, as per the judgment of the Supreme Court of India in PR Shah, Shares and Stock Brokers Private Limited v BHH Securities Private Limited ((2012) 1 SCC 594), multiplicity of proceedings, conflicting decisions and a likelihood of injustice are sufficient grounds for consolidation of proceedings. Accordingly, in such cases the tribunal may consolidate separate proceedings upon application by the parties.

Similarly, in Chloro Controls India (P) Ltd v Severn Trent Water Purification Inc ((2013) 1 SCC 641) the Indian counterpart filed suit and sought an injunction against two non-signatories. The Supreme Court of India held that the shareholders’ agreement is the parent agreement, that all other agreements are to facilitate implementation of the parent agreement and that multiple agreements are part of one composite transaction. Further, the court - while observing that in this case the signatories to multiple agreements were all related companies and their interests were not averse to the interest of the joint venture company - held that even a non-signatory party can be referred to arbitration, subject to proving that it is claiming through or under a signatory to the arbitration.

However, whether consolidation is allowed will depend on the facts of the case and the nature of the relationship between the parties. In M/s Duro Felguera SA v M/s Gangavaram Port Limited (GPL) (AIR 2017 SC 5070) the Supreme Court of India was called upon to decide whether, in a dispute involving multiple contracts between both foreign and domestic parties, a ‘composite reference’ could be made to the tribunal. The Supreme Court held that a composite reference would not be proper, as both domestic and international arbitrations were involved. Accordingly, six separate tribunals were constituted to adjudicate the disputes involved.

For more information about this answer please contact: Manoj Singh from Singh & Associates
7.2
Does the law in your jurisdiction permit the joinder of additional parties to an arbitration which has already commenced?
 
India
The courts and the tribunal have no powers under the Arbitration Act to order third parties to participate in arbitration proceedings. However, in the authors’ view, a third party may, in any event, be joined in arbitration proceedings with the consent of all parties (including the third party), but not otherwise.

Similarly, in Chloro Controls India (P) Ltd v Severn Trent Water Purification Inc ((2013) 1 SCC 641), the Indian counterpart filed suit and sought an injunction against two non-signatories. The Supreme Court of India held that a shareholders’ agreement is the parent agreement and all other agreements are to facilitate implementation of the parent agreement, and that multiple agreements are part of one composite transaction. Further, the court - while observing that in this case the signatories to the multiple agreements were all related companies and their interests were not averse to the interests of the joint venture company - held that even a non-signatory party can be referred to arbitration, subject to proving that it is claiming through or under a signatory to the arbitration.

For more information about this answer please contact: Manoj Singh from Singh & Associates
7.3
Does an arbitration agreement bind assignees or other third parties?
 
India
There is no express provision in the Arbitration Act which bars an arbitration agreement from binding assignees or non-signatories. In Kotak Mahindra Prime Ltd v Sanjeev (2009 (1) Bom CR 130) it was held that no law prohibits the assignment of an arbitration agreement, provided that the subject matter is capable of being assigned and such assignment is regulated under the law of assignment of contractual rights and obligations. The validity of assignment of the arbitration agreement shall depend on the facts. On the issue of binding non-signatories to the arbitration agreement, similarly there is no express bar which prevents non-signatories from being made party to the arbitration agreement. In its recent decision in Ameet Lalchand Shah v Rishab Enterprises (Civil Appeal 4690 of 2018, arising out of SLP(C) 16789 of 2017, decided on 3 May 2018), the Supreme Court of India held that in cases where the agreements are interconnected and several parties are involved in a single commercial project, through several agreements, all the parties can be made amenable to arbitration.

For more information about this answer please contact: Manoj Singh from Singh & Associates