Chloro Controls India v. Severn Trent
The foundational ruling that introduced the group of companies doctrine into Indian arbitration jurisprudence under Section 45.
What Happened
A composite transaction was documented across a mother agreement and several ancillary agreements, only some of which carried arbitration clauses. A party sought reference of the whole dispute to arbitration.
Legal Issue
Whether the words "claiming through or under" in Section 45 permit reference of non-signatories to a composite transaction to arbitration.
Court Held
The Court held that in exceptional cases a non-signatory may be referred to arbitration where the transaction is composite and performance of the mother agreement is not feasible without the ancillary agreements. This introduced the group of companies doctrine into Indian law.
Key takeaways
- Composite transactions may be referred to arbitration as a whole.
- The phrase "claiming through or under" carries substantive width.
- The doctrine applies in exceptional cases, not as a matter of course.
- Later decisions have refined the evidentiary threshold.
Why It Matters
This is the origin point for every subsequent joinder argument in Indian arbitration, and remains the first authority cited on composite transactions.