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TMI BlogGroup of Companies doctrineX X X X Extracts X X X X X X X X Extracts X X X X ..... cally a family, and are linked by trust-based relationships forged around a similar persona, ethnicity, or community.", Jayati Sarkar, 'Business Groups in India' in Asli Coplan, Takashi Hikino, and James Lincoln (eds) The Oxford Handbook of Business Groups (2010) 299 A group company involving the parent and subsidiary companies are created for myriad purposes such as limiting the liability of the parent corporation, facilitating international trade, entering into business ventures with investors, establishing domestic corporate residence, and avoiding tax liability. The principle of separate legal personality has been the cornerstone of corporate law. In Salomon v. Salomon, [1897] AC 22 the House of Lords famously observed that a company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... parties has to be derived from the words used in the arbitration agreement. While construing the arbitration agreement, it is the duty of the court to not delve deep into the intricacies of the human mind, but only consider the expressed intentions of the parties., Kamla Devi v. Takhatmal Land, AIR 1964 SC 859; Bangalore Electricity Supply Co Ltd v. E S Solar Power (P) Ltd, (2021) 6 SCC 718 The words used in the contract reflect the commercial understanding between the parties. The intention of the parties has to be ascertained from the words used in the contract, considered in light of the surrounding circumstances and the object of such contract., Bank of India v. K Mohandas, (2009) 5 SCC 313; M Dayanand Reddy v. A P Industrial Infrastruc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ous academic debate among practitioners of arbitration law and academics with domain expertise. The first view questions the necessity of adopting the doctrine by suggesting that the determination of consent in complex multi-party arbitration can be done on the basis of traditional contractual and commercial law theories. Professor Bernard Hanotiau suggests that the group of companies doctrine should be discarded because it has been used as a "shortcut to avoid legal reasoning" leading to a distorted approach by courts and arbitral tribunals., Hanotiau (n 85) 546. However, Professor Hanotiau does concede that the existence of a group of companies may be a relevant factual element to determine whether the conduct of a non-signatory party amo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the "circumstances that surround the conclusion and characterize the performance and later the termination of the contracts." In other words, it was held that a non-signatory party could be considered as a "true party" to the arbitration agreement on the basis of their role in the conclusion, performance, or termination of the underlying contract containing the arbitration agreement. Since the group of companies doctrine is a consent based theory, its application depends upon the consideration of a variety of factual elements to establish the mutual intention of all the parties involved. In other words, the group of companies doctrine is a means to infer the mutual intentions of both the signatory and non-signatory parties to be boun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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