Case Law Details
Oil and Natural Gas Corporation Ltd. Vs Discovery Enterprises Pvt. Ltd. (Supreme Court)
Facts- The main contention of the appellant (ONGC) is that DEPL and JDIL constitute one single commercial entity and that ONGC is hence entitled by law to compel JDIL to participate in the arbitration proceedings so as to enforce the award against it.
It contended that the interim award has been rendered purely on the premise that a non-signatory to the arbitration agreement cannot be impleaded as a party. That, the group of companies doctrine is applicable in this case.
ONGC also submitted that the applications for discovery and inspection must be decided first and it is only on the completion of the process that JDIL’s challenge to jurisdiction under Section 16 could be addressed.
Conclusion- Held that the first Arbitral Tribunal deferred a decision on the two applications until the issue of jurisdiction was decided. The net result is that the applications for discovery and inspection which were crucial to ONGC’s claim that there existed functional, financial and economic unity between DEPL and JDIL remained to be decided before the application under Section 16 was taken up. There is merit in the submission which was been urged on behalf of the ONGC that the application for discovery and inspection had to be decided before the plea of jurisdiction was adjudicated upon. The application for discovery and inspection was intended to facilitate ONGC in its plea that there existed functional, financial and economic unity between the two companies. The failure of the first Arbitral Tribunal to hear the application for discovery and inspection goes to the root of its interim award dated 27 October 2010 holding an absence of jurisdiction qua JDIL.
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