Balaji Steel Trade vs Fludor Benin S.A

REPORTABLE 2025 INSC 1342 IN THE SUPREME COURT OF INDIA CIVIL ORIGINAL JURISDICTION

ARBITRATION PETITION NO. 65 OF 2023

BALAJI STEEL TRADE ...PETITIONER (S)

VERSUS

FLUDOR BENIN S.A. & ORS. …RESPONDENT(S)

JUDGMENT

1. For the sake of convenience and ready reference, this judgment

contains the following parts: -

Table of Contents I. Introduction: .......................................................................................................... 2

II. Facts: ..................................................................................................................... 3

(i) Buyer and Seller Agreement between Petitioner and Respondent No.1: ................... 4

(ii) Execution of Sales Contracts with Respondent No. 2 ................................................ 5

(iii) Execution of the Addendum ....................................................................................... 6

(iv) HSSAs executed between Petitioner and Respondent No. 3 ..................................... 6

(v) Respondent No.1’s invocation of Benin Arbitration ..................................................... 7

(vi) Petitioner’s institution of Anti-Arbitration Injunction Suit ............................................. 8

(vii) Filing of the Present Petition ...................................................................................... 9 Signature Not Verified Digitally signed by KAPIL TANDON

(viii) Culmination of Benin Arbitration: ............................................................................... 9 Date: 2025.11.21 18:32:07 IST Reason:

1 III. Submissions: ....................................................................................................... 9

(i) Submissions on behalf of the Petitioner ................................................................. 9

(ii) Submissions on behalf of Respondent No. 1 ....................................................... 11

(iii) Submissions on behalf of Respondent No. 2 ....................................................... 13

(iv) Submissions on behalf of Respondent No. 3 ....................................................... 14

IV. Analysis: ............................................................................................................ 14

(i) Maintainability of the Section 11(6) Petition in International Commercial Arbitration………………………………………………………………………………...15

(ii) Inapplicability of Arbitration Clauses in Sales Contracts and HSSAs to dispute arising from BSA and Addendum ......................................................................... 17

(iii) No novation or supersession of BSA by Sales Contracts and HSSAs .................. 18

(iv) Initiation and Culmination of Benin Arbitration: ..................................................... 21

(v) Dismissal of Anti-Arbitration Injunction by High Court of Delhi ............................. 22

(vi) Findings of High Court of Delhi as ‘Issue Estoppel’ .............................................. 25

(vii) Misplaced reliance on Group of Companies Doctrine .......................................... 28

V. Conclusion and Decision: ................................................................................. 29

I. Introduction:

2. The Arbitration Petition under Section 11 of the Arbitration and

Conciliation Act, 1996 1 is an attempt by the petitioner to anchor an

international commercial arbitration, arising out of Buyer and Seller

Agreement (BSA), and its Addendum which is governed by laws of

Republic of Benin, into the domestic framework of the Act, 1996 by placing

reliance on dispute resolution clauses contained in subsequent

contractual arrangements, namely Sales Contracts executed with

respondent no. 2 and High Seas Sales Contracts (HSSAs) executed with

1 Hereinafter, “Act, 1996”.

2 respondent no. 3. The prayer is for constitution of an Arbitral Tribunal and

a composite reference of the alleged disputes including within the

embrace the three respondents as its parties by invoking the group of

companies doctrine. We have considered issue of jurisdiction, concluded

decision between the parties, and also the propriety of the present petition

and dismissed the petition. We have held that as the primary contract

(BSA) incorporates (i) international commercial arbitration, question of

application of Section 11 contained in Part I does not arise, (ii) BSA with

respondent no. 1 is the “mother agreement’' to which respondents no. 2

and 3 are aliens, (iii) the petitioner is barred by issue estoppel arising

owing to dismissal of anti-arbitration injunction suit and also that, (iv) there

is no compositeness of the transaction so as to attract group of companies

doctrine.

II. Facts:

3. The petitioner, Balaji Steel Trade, has approached this Court under

Section 11(6) read with Section 11(12)(a) of the Act 1996 praying for

appointment of sole arbitrator to adjudicate and decide upon dispute that

has arisen between the parties owing to the alleged breach of Buyer and

Seller Agreement (hereinafter, “BSA”) dated 06.06.2019 executed

between the present petitioner and respondent no.1, Fludor Benin S.A.

Petitioner prays for a composite reference to arbitration by seeking the

3 inclusion of respondent no. 2, M/s Vink Corporations DMCC, a company

incorporated in Dubai, UAE, and respondent no. 3, Tropical Industries

International Pvt. Ltd., a private limited company registered in New Delhi,

India. As per the petitioner, all three respondents are owned and controlled

by Tropical General Investments Ltd. Group (“TGI Group”) whereby TGI

Group holds 100% shares in respondent no.1, 51% shares in respondent

no. 2 and 99.73% shares in respondent no.3.

4. Buyer and Seller Agreement between Petitioner and Respondent

No.1: The petitioner, Balaji Steel Trade, is a partnership firm engaged in

the business of steel trading as well as in the trade of various agricultural

commodities. Respondent No. 1, Fludor Benin S.A., is a private limited

company incorporated under the laws of Republic of Benin, a country in

West Africa. According to the petitioner, in the year 2018, respondent no.

1 made representations to the petitioner with respect to the supply of

cotton seeds. Consequent thereto, both parties entered into negotiations

with a view to explore a business arrangement for the manufacture and

sale of cottonseed cakes.

5. In furtherance of the aforesaid discussions, the parties executed a

Collaboration and Buy Back Agreement (“Collaboration Agreement”)

dated 10.12.2018. Under the said agreement, the petitioner undertook to

provide the requisite machinery and establish a manufacturing unit at

4 Bohicon, a city in Benin, for the manufacture of cottonseed cake.

Respondent no. 1, on its part, assumed the obligation to manufacture the

said product and supply it to the petitioner in India. Clause 202 of the

Collaboration Agreement contained an arbitration provision stipulating

that disputes thereunder would be referred to arbitration before CAMEC-

CCIB 3 in Benin.

6. Subsequently, and in supersession of the Collaboration Agreement,

the petitioner and respondent no. 1 entered into a Buyer-Seller Agreement

(“BSA”) dated 06.06.2019, for a term of five years, governing the supply

and sale of the product. The said BSA also incorporated an arbitration

clause this time providing for ad hoc arbitration to be conducted in Benin.

Article 11 of the BSA incorporating arbitration agreement is as follows:

“11. Arbitration: All the disputes will be resolved by discussions and if Arbitration becomes only option then it will take place in Benin and decision will be binding on both the parties and Arbitration fee will be borne by the losing party.”

7. Execution of Sales Contracts with Respondent No. 2: After having

executed the BSA, on 17.10.2019 respondent no. 1 assigned its obligation

for supply of product to respondent no. 2, M/s. Vink Corporations DMCC.

In order to give effect to the said assignment and to facilitate supply of the

2 20. Arbitration: All the disputes shall be settled amicably and if arbitration becomes the sole option

to settle a crises, it shall take place in Benin before CAMEC-CCIB and the decision shall be binding on both parties. The arbitration costs shall be borne by the losing party. 3 “Centre d’Arbitrage, de Médiation et de Conciliation de la Chambre de Commerce et d’Industrie du

Bénin”

5 product, the petitioner and respondent no. 2 entered into a series of Sales

Contracts providing for reference of dispute to sole arbitrator in

accordance with the Act, 1996, with the place of arbitration at New Delhi.

The relevant portion of the dispute resolution clause is as follows:

“Dispute Resolution: Any dispute arising out of or relating to this agreement, including any question regarding its existence, validity, or termination, which cannot be amicably resolved by the Parties, shall be settled before a sole arbitrator in accordance with the Indian Arbitration and Conciliation Act, 1996. The sole arbitrator shall be appointed mutually by the parties. In the event the Parties fail to agree on a sole arbitrator within Thirty (30) days from the date of notice of arbitration, then appointment of such sole arbitrator shall take place as per the provisions of the Indian Arbitration and Conciliation Act, 1996. The place of arbitration should be New Delhi and language shall be English. The resulting arbitral award shall be final and binding without right of appeal, and judgment upon such award may be entered in any court having jurisdiction thereof. A dispute shall be deemed to have been arisen when either Party notifies the other Party in writing to that effect.”

8. Execution of the Addendum: The terms of BSA were modified on

09.01.2021 by signing an Addendum, terms of which eliminated

petitioner’s exclusive rights of purchase of the product thereby allowing

respondent no. 1 to sell the product to third parties also. The petitioner

contends that, following the execution of the Addendum, there was a

shortfall in the quantity of the product supplied to it.

9. HSSAs executed between Petitioner and Respondent No. 3: In

order to address the said shortfall, respondent no. 3, Tropical Industries

International Pvt. Ltd., was introduced to the petitioner. Consequent

thereto, the petitioner and respondent no. 3 entered into a series of High

6 Sea Sale Contracts (“HSSA”), which, inter alia, delineated the respective

rights and obligations of respondent no. 3 as the seller and the petitioner

as the purchaser of the product. Said HSSAs also contained arbitration

clause providing that:

“g) Dispute if any, between the parties arising in relation to this agreement of HIGH SEAS SALE shall be referred to the arbitration under the Indian Arbitration Act 1940. In witness whereof, the parties have said and subscribe their hands at DELHI, INDIA, the day and year first hereinabove written.”

10. Disputes arose between the parties with respect to quantity of

supply and payments inter-se which led to petitioner serving a notice

dated 15.07.2022 served on all party respondents. Respondent nos. 2 and

3 replied to said notice shrugging their responsibility on the ground of lack

of privity and separateness from respondent no. 1. Petitioner then issued

termination notice dated 06.09.2022 under which BSA and the Addendum

were terminated.

11. Respondent No.1’s invocation of Benin Arbitration: Things took a

turn when the petitioner received a notice from Chamber of Commerce,

Benin - CAMEC dated 12.04.2023 apprising the petitioner that respondent

no. 1 has requested for settlement of disputes by arbitration in terms of

the BSA before it in Benin and called upon the petitioner to nominate its

arbitrator. Petitioner refuted to the said arbitration by sending its objections

vide letter dated 15.05.2023. Thereafter, respondent no.1 on 31.05.2023

sent notice invoking arbitration under the laws of Benin to the petitioner to

7 which the petitioner replied on 30.06.2023 denying the contents of the

notice and resisting to Benin as seat of arbitration. Further objection of the

petitioner was with regard to the non-joinder of respondent no. 2 and

respondent no. 3, who were, as per petitioner, proper and necessary

parties.

12. Instead of submitting to the Benin arbitration, the petitioner issued

its own notice invoking arbitration to all the three respondents purportedly

in terms of Section 21 of the Act, 1996 referring the disputes arising out of

the BSA, Sales Contract and HSSAs to arbitration and proposed the name

of sole arbitrator. Respondent no. 1 however continued to proceed with

Benin arbitration and filed an application before the Commercial Court of

Cotonou, Benin (“Benin Court”) seeking appointment of arbitrator which

was allowed on 26.07.2023, whereby the Benin Court appointed one Dr.

Gilbert Ahouandjinou as the sole arbitrator for determination of disputes

between the petitioner and respondent no. 1.

13. Petitioner’s institution of Anti-Arbitration Injunction Suit: Petitioner

however proceeded to institute Anti-Arbitration Injunction Suit (CS

(Comm) No. 544 of 2023) before the High Court of Delhi on 10.08.2023,

inter alia praying for a decree of permanent injunction restraining the

respondent no. 1 from proceeding/continuing with the Benin Arbitration.

8

14. Filing of the Present Petition: Pending disposal of anti-arbitration

injunction suit, more or less around the same time, petitioner on

23.08.2023 filed the present application under Section 11(6) read with

Section 11(12)(a) of the Act, 1996 for appointment of sole arbitrator for

adjudication of the disputes.

15. Culmination of Benin Arbitration: Pending disposal of the anti-

arbitration injunction suit, and the application under Section 11(6) of the

Act, 1996 for constitution of arbitral tribunal before this Court, the ad hoc

arbitration in Benin got concluded and the sole arbitrator rendered its

award on 21.05.2024.

16. Further fact having a bearing on the present proceeding is the

dismissal of the anti-arbitration injunction suit (Comm) No. 544 of 2023 by

High Court of Delhi on 08.11.2024.

III. Submissions:

17. Submissions on behalf of the Petitioner: Mr. Devadatt Kamat, senior

counsel assisted by Ms. Shruti Sabharwal, Mr. Nishant Doshi and others,

appearing on behalf of the petitioner has made the following submissions:

(i) Disputes against all respondents arise from a composite transaction,

as the series of agreements are interlinked and founded on a common

commercial objective under the TGI Group. Respondents nos. 2 and 3

9 supplied goods on the instructions of respondent no. 1, thereby

performing obligations under the BSA by conduct. This, coupled with

contemporaneous correspondence and the common legal notice dated

15.07.2022 issued to all respondents, shows that the disputes are

inseparable and require a composite reference under the group of

company doctrine4.

(ii) The dispute resolution clause in the BSA stands novated by the

arbitration clauses contained in the subsequent Sales Contracts and

HSSAs executed with respondent nos. 2 and 3. Reference in this regard

has been made to Sales Contract between the petitioner and respondent

no. 2, the arbitration clause of which is framed as, “appointment of such

sole arbitrator shall take place as per the provisions of the Indian

Arbitration and Conciliation Act, 1996”.

(iii) Alternatively, even if the BSA clause is given effect, it is submitted that

Benin was indicated only as the venue, not the juridical seat, since Article

11 merely states that arbitration “will take place in Benin.” In contrast, the

later contracts evince a clear intention to adopt Indian law as the

governing law of arbitration. Relying on Mankastu Impex Pvt. Ltd. v.

Airvisual Ltd.5, it is argued that the seat must be inferred from the parties’

4 Cox & Kings Ltd. v. SAP India (P) Ltd., 2023 SCC OnLine SC 1634. (hereinafter, Cox & Kings) 5 (2020) 5 SCC 399. (hereinafter, Mankastu Impex)

10 conduct and the governing law, which unmistakably points to India as the

seat.

(iv) Arbitral proceedings in Benin and the consequent award are non-est

in law, having been unilaterally invoked by respondent no. 1 to pre-empt

petitioner’s claims under Indian law. Benin is not a reciprocating territory

under Section 44(b) 6 of the Act, 1996, and any award rendered there

would be unenforceable in India.

(v) Lastly, it is argued that the Delhi High Court’s findings in the anti-

arbitration injunction suit have no bearing on these proceedings, as the

inquiry under Section 45 (before the High Court) and Section 11 (before

this Court) operate in distinct spheres. The limited scrutiny is only to

enquire about the existence of a valid arbitration agreement, and all other

questions can be raised and contested before the arbitral tribunal itself.

18. Submissions on behalf of Respondent No. 1: Mr. Nakul Dewan,

senior counsel, assisted by Mr. Susshil Daga, Mr. Pallav Mongia and

others made the following submissions opposing the maintainability of the

petition. He would strongly urge for dismissal of the present petition on the

ground that it is abuse of process for the following reasons:

6 Section 44. Definition -…

(a) …

(b) in one of such territories as the Central Government, being satisfied that reciprocal provisions have been made may, by notification in the Official Gazette, declare to be territories to which the said Convention applies.

11 (i) It is urged that Part I of the Act, 1996, including Section 11, has no

application since the dispute arises solely under the BSA, which expressly

stipulates that arbitration “shall take place in Benin” and that the governing

law shall be the laws of Benin (Article 5 of the Addendum). Hence, the

arbitration under BSA is international commercial arbitration, governed by

the Benin Arbitration Act.

(ii) The legal notice issued by the petitioner on 15.07.2022 virtually seeks

specific performance of the BSA on the ground that the respondent has

breached the agreement by not supplying the contracted quantity of

goods. On the other hand, his client invoked arbitration on 31.05.2023

under the BSA, on the ground that the petitioner had defaulted in

accepting delivery, resulting in losses. Under these circumstances, the

dispute arises out of rights and obligations under BSA, for which the

governing law is that of Republic of Benin, the Benin Arbitration Act 7 being

the curial law.

(iii) Respondent no. 1 is not bound by the arbitration clauses in the Sales

Contracts or HSSAs, which were executed independently between the

petitioner and respondent nos. 2 and 3 as the BSA neither refers nor

incorporates these subsequent contracts. The principles of group of

7 Uniform Act on Arbitration of the Organisation for the Harmonisation of Business Law in Africa (OHADA).

12 companies doctrine as laid down in Cox & Kings, has no application to the

facts of the present case.

(iv) Placing reliance on Balasore Alloys Ltd. v. Medima LLC 8, respondent

no. 1 argues that the BSA is the principal or “mother” agreement, and

therefore its arbitration clause prevails over those in any ancillary or

subsequent contracts. Having consciously accepted Benin as the seat of

arbitration, the petitioner cannot now resile from its contractual

commitment or seek parallel proceedings in India.

(v) Lastly, the contention that the BSA stood novated or assigned through

the Sales Contracts and HSSAs is denied. Even if such assignment were

assumed, respondent nos. 2 and 3 would merely step into respondent 1’s

contractual position, leaving no ground for a separate or parallel

arbitration. In any event, all such issues fall within the jurisdiction of the

arbitral tribunal constituted under the BSA. The respondents further rely

on the Delhi High Court’s findings in the petitioner’s anti-arbitration

injunction suit, which, having attained finality, bar re-litigation of identical

issues.

19. Submissions on behalf of Respondent No. 2: Ld. Counsel for

respondent no. 2, M/s. Vink Corporations DMCC, submitted that the

multiple Sales Contracts that they have entered into with the petitioner

8 (2020) 9 SCC 136.

13 were standalone limited term contracts concluding with the delivery of the

goods. The arbitration clause is limited to, “any dispute arising out of or

relating to this Agreement”.

20. Submissions on behalf of Respondent No. 3: Similarly, Ld. Counsel

for respondent no. 3 submits that it and petitioner entered into four HSSAs

for delivering a specified quantity of the products detailed in each HSSAs.

The arbitration clause in each HSSA provided that “Dispute if any,

between the parties arising in relation to this agreement of HIGH SEAS

SALE shall be referred to the arbitration under the Indian Arbitration Act

1940”. Hence, the said clause was limited to disputes arising out of the

specific HSSA between the petitioner and respondent no. 3.

21. Thus, respondent nos. 2 and 3 have submitted that no dispute has

arisen with respect to Sales Contracts or the HSSAs and that the disputes

raised by the petitioner are limited to BSA and the Addendum, with respect

to which they are aliens.

IV. Analysis:

22. At the outset, it is to be noted that the present application has been

filed under Section 11(6) read with Section 11(12)(a) of the Arbitration and

Conciliation Act, 1996 seeking appointment of a sole arbitrator for a

composite reference of disputes arising out of the (i) BSA, (ii) the Sales

Contracts, and (iii) the HSSAs. At this stage, the Court is required to advert

14 to the foundational question of whether there exists a valid and

enforceable arbitration agreement between the parties, which can form

the basis of an arbitral reference. 9 Equally material is the principle that the

Court at this stage does not engage in a roving enquiry into merits but

confines itself to the existence and validity of an arbitration agreement. 10

23. Maintainability of the Section 11(6) Petition in International

Commercial Arbitration: However, before touching upon the merits of the

matter, we must first concern ourselves with the seminal question whether

the present petition is proper in the sense that whether this Court, in

exercise of jurisdiction under Section 11(6) read with Section 11(12)(a) of

the 1996 Act, can at all entertain a request for appointment of an arbitrator

in respect of a dispute which, as contended by respondent, is an

international commercial arbitration. This issue assumes foundational

importance because, if Part I of the 1996 Act stands excluded by virtue of

the parties’ choice of the seat of arbitration and the governing law, the

jurisdiction of this Court to entertain the application is ousted at the

threshold.

24. Section 2(1)(f) of the Act, 1996 defines ‘international commercial

arbitration’ as arbitration relating to disputes arising out of legal

9 SBI General Insurance Co. Ltd. v. Krish Spinning, 2024 SCC OnLine SC 1754. 10 Interplay between Arbitration Agreements under Arbitration and Conciliation Act, 1996 and Stamp Act,

1899, In Re, (2024) 6 SCC 1.

15 relationships, whether contractual or not, considered as commercial under

the law in force in India and where at least one of the parties is a foreign

national, whether that party is an individual, a body corporate, an

association or body of individuals or a foreign Government. Respondent

no. 1 being a company incorporated under the laws of Benin, the present

dispute squarely falls within the ambit of international commercial

arbitration. Once this characterisation is made, Section 2(2) of the Act

becomes immediately relevant, for it stipulates that Part I shall apply only

where the place of arbitration is in India, thereby mandating that Part I

stands excluded where the parties have chosen a foreign seat. This Court

has consistently held, beginning with Bharat Aluminium Co. v. Kaiser

Aluminium Technical Services Inc. 11 (BALCO), that Part I of the 1996 Act

has no application to arbitrations seated outside India. The seat has a

juridical significance in arbitration law: it determines the courts that

exercise supervisory jurisdiction over the arbitral proceedings.

25. Respondent no. 1 has urged that Part I, including Section 11 is not

applicable to the BSA dated 06.06.2019. At the threshold, it is common

ground that the relationship between the petitioner and respondent no. 1

was crystallised in the BSA and its Addendum dated 09.01.2021. These

agreements constitute the principal arrangements between the two

11 (2012) 9 SCC 552.

16 contracting entities. The arbitration clause contained in Article 11 of the

BSA explicitly provides that in the event of disputes, arbitration shall “take

place in Benin,” while Article 5 of the Addendum makes it further explicit

that the BSA shall be “construed, governed and interpreted in accordance

with the laws of Benin.” In Mankastu (supra), this Court emphasised that

the seat of arbitration is to be ascertained from the intention of the parties

as gathered from the agreement as a whole. Further, in BGS SGS SOMA

JV v. NHPC Ltd.12 this Court observed that;

“61. It will thus be seen that wherever there is an express designation of a “venue”, and no designation of any alternative place as the “seat”, combined with a supranational body of rules governing the arbitration, and no other significant contrary indicia, the inexorable conclusion is that the stated venue is actually the juridical seat of the arbitral proceeding.”

26. Article 11 of BSA read with Article 5 of the Addendum unequivocally

shows that the parties not only indicated the geographical location of

arbitration but also selected the governing law. The dual indications

together leave little scope for doubt that Benin was intended to be the

juridical seat with laws of Benin as the curial law.

27. Inapplicability of Arbitration Clauses in Sales Contracts and HSSAs

to dispute arising from BSA and Addendum: The petitioner has sought to

place reliance on arbitration clauses contained in Sales Contracts and

HSSAs to argue that it was the intention of the parties to arbitrate in India.

12 (2020) 4 SCC 234.

17 Petitioner argued that mere mention in BSA that arbitration shall take

place in Benin does not by itself make Benin the juridical seat especially

in light of contrary indica in terms of arbitration clauses in Sales Contracts

and HSSAs. To buttress this proposition, petitioner further argued that

BSA stood novated or superseded by the Sales Contracts and HSSAs

which provide for arbitration in India. This argument is equally

unmeritorious. It is well settled that novation of a contract must be

established by clear and unequivocal intention of the parties to substitute

the earlier agreement with a new one. The BSA dated 06.06.2019

constituted the principal or “mother” contract between the petitioner and

respondent no. 1, defining their long-term commercial relationship,

specifying supply obligations, pricing structure, risk allocation, and a self-

contained dispute resolution clause providing for arbitration “to take place

in Benin” under Benin law.

28. No novation or supersession of BSA by Sales Contracts and

HSSAs: By contrast, the Sales Contracts executed between the petitioner

and respondent no. 2, and the HSSAs executed with respondent no. 3,

were subsequent, limited-purpose instruments. They were entered into

only to facilitate execution of individual shipments once respondent no. 1

assigned part of its performance to other group entities. Each Sales

Contract and HSSA were confined to a specific consignment or

18 transaction, contained its own commercial terms such as quantity, price

and delivery schedule, and had separate arbitration clauses, one referring

disputes to arbitration under the Act, 1996 (for Sales Contracts) and the

other under the Indian Arbitration Act, 1940 (for HSSAs). None of these

contracts incorporate or refer to the BSA or its arbitration clause, nor did

they expressly substitute, novate, or supersede the BSA. Their scope

ended upon completion of delivery and payment under the respective

consignment.

29. The absence of cross-references or language of substitution makes

it impossible to infer novation under Section 6213 of the Indian Contract

Act, 1872. The BSA continued to subsist independently and governed the

broader supply arrangement, while the Sales Contracts and HSSAs

merely operated as implementing or ancillary arrangements for discrete

transactions. As this Court observed in Balasore Alloys Ltd., where

several contracts coexist, the arbitration clause of the mother agreement

governs the dispute unless a later contract unequivocally replaces it. The

petitioner has shown no such intention of substitution. Consequently, any

alleged default by respondent no. 1, such as short-supply or failure to

deliver contracted quantities, emanates from obligations under the BSA,

13 Section 62. Effect of novation, rescission, and alteration of contract: If the parties to a contract agree to substitute a new contract for it, or to rescind or alter it, the original contract, need not be performed.

19 not from the Sales Contracts or HSSAs, which stand concluded.

Therefore, the arbitration agreements in the Sales Contracts or HSSAs

cannot displace or override the arbitration clause in the BSA, and disputes

rooted in the BSA must be resolved exclusively through the arbitration

agreed therein, namely, arbitration seated in Benin and governed by Benin

law. Owing to the separateness of the three contractual instruments, it

cannot be said that there were any contrary indica in BSA in respect of

any other law.

30. In view of the aforesaid discussion, both the legal position and the

factual matrix converge to a single, inescapable conclusion. The very

nature of the present dispute is that of an “international commercial

arbitration” as defined under Section 2(1)(f) of the 1996 Act, respondent

no. 1 being a corporation incorporated under the laws of Benin. This

statutory characterisation necessarily triggers the application of Part II of

the 1996 Act when the arbitration is foreign-seated, and not Part I. Section

2(2) makes the position explicit by providing that Part I applies only where

the place of arbitration is in India; consequently, recourse to Section 11,

located within Part I, is available solely in respect of India-seated

arbitrations. As this Court explained in BALCO, reaffirmed in Mankastu,

BGS SGS SOMA JV, and emphatically reiterated in PASL Wind

20 Solutions 14, Indian Courts have no jurisdiction to appoint an arbitrator for

a foreign-seated arbitration, irrespective of the nationality or domicile of

the parties. On the facts as well, the BSA and its Addendum constitute the

mother agreement, containing a clear and deliberate choice of Benin as

the juridical seat of arbitration and Benin law as the governing and curial

law. The subsequent Sales Contracts and HSSAs are merely ancillary,

facilitating performance of isolated shipments, and cannot override the

dispute resolution framework of the BSA. Thus, both in principle and in

the factual circumstances of the case, the arbitration agreement in the

BSA prevails. The disputes raised by the petitioner arise squarely from the

BSA, and the parties’ chosen forum for their adjudication is arbitration in

Benin. Accordingly, the invocation of Part I and the present request under

Section 11(6) of the 1996 Act is fundamentally misconceived, legally

untenable, and contrary to the statutory scheme as well as the autonomy

of the parties’ contractual design.

31. Initiation and Culmination of Benin Arbitration: It is significant to

note, even prior to the institution of the present proceedings, respondent

no. 1 had already invoked arbitration in terms of Article 11 of the BSA in

Benin. As already indicated, the Benin Commercial Court, vide order

dated 26.07.2023, appointed a sole arbitrator, Dr. Gilbert Ahouandjinou,

14 PASL Wind Solutions Pvt. Ltd. v. GE Power Conversion India Pvt. Ltd, 2021 SCC OnLine SC 331.

21 in exercise of powers available under the Benin Arbitration Act, thereby

constituting a tribunal under the parties’ chosen curial law. The arbitral

tribunal, after considering the objections, ruled affirmatively on its own

jurisdiction in accordance with the doctrine of kompetenz–kompetenz and

proceeded to adjudicate the substantive disputes arising out of the BSA.

32. The Benin-seated arbitral tribunal thereafter rendered a final and

reasoned award dated 21.05.2024. The consequence of this development

is twofold. First, the arbitral process agreed to by the parties in the BSA

has already culminated in an adjudication on the very disputes which the

petitioner now seeks to re-agitate through the present Section 11

proceedings. Second, once the tribunal has asserted and exercised its

jurisdiction and delivered a final award, the petitioner cannot seek to

initiate a parallel arbitral process in India in respect of the same subject

matter. Allowing such an endeavor would be wholly antithetical to the

principles of finality of arbitral proceedings, undermine the doctrine of

kompetenz–kompetenz, and would defeat the territorial principle that the

courts of the seat (Benin) exercise supervisory jurisdiction over the

arbitration.

33. Dismissal of Anti-Arbitration Injunction by High Court of Delhi:

Another consideration which cannot be lost sight of is that petitioner’s

attempt to resist the Benin arbitration before the Delhi High Court failed in

22 light of the judgment dated 08.11.2024 whereby the High Court allowed

respondent no. 1’s application under Section 45 and dismissed the anti-

arbitration injunction suit filed by the petitioner. Although proceedings

under Section 45 of the 1996 Act are distinct in scope from an application

under Section 11, the reasoning adopted by the High Court, particularly

its interpretation of the BSA, the Addendum, and the inter-relationship of

the subsequent Sales Contracts and HSSAs, bears directly upon the

factual architecture that underlies the present petition. The High Court,

after a detailed examination of the contractual framework, arrived at a

categorical finding that the BSA and its Addendum form the principal and

operative contractual matrix between the petitioner and respondent no. 1,

and that the arbitration clause contained therein represents the parties’

deliberate and binding choice of dispute resolution. It held that the Sales

Contracts and HSSAs, being independent and self-contained

arrangements with respondent nos. 2 and 3 respectively, do not, and

cannot, supersede, modify, or dilute the arbitration agreement in the BSA,

nor do they create a composite dispute capable of attracting a unified

arbitral mechanism under Indian law. To this effect, it was observed:

“52. Defendant No. 1 is not a party to either the Sales Contracts or HSSAs. Thus, there is no question of it being bound by the arbitration clause contained in the Sales Contracts and/or HSSAs. It is an admitted fact that Plaintiff and Defendant No. 1 signed the BSA and Addendum. If Defendant No. 1 assigned its obligation to Defendant No. 2 & 3 and Plaintiff agreed to the same, it would result in Defendant No. 2 & 3 stepping into the shoes of Defendant No. 1 for the purposes of the BSA and addendum. Defendants No. 2 & 3 would then be bound

23 by the BSA and Addendum, including Article 11 and Article 5, respectively, but it cannot be vice-versa. Hence, Articles 11 and article 5 would continue to remain the binding arbitration agreement between the parties. The arbitration clause/Article 11 of BSA and Article 5 of the Addendum reads as under:

…….

After pursuing the arbitration clauses of BSA and Addendum, it is clear that the plaintiff and defendant no. 1 had, out of their own will, choose the preferred place of arbitration to be in Benin. Therefore, Arbitration would be the method of resolving any disagreement that might emerge between the parties to the BSA and addendum. Therefore, it is clear that the agreements entered into between defendants no 2 & 3 and the plaintiff are separate from the BSA and addendum.

53. The supplementary obligation, as stated by the plaintiff, would be limited to the consignment identified in the Sales Contracts or HSSAs.

The sales contracts and HSSAs were entered for the supply of the product on behalf of defendants no 2 & 3. Neither is there a mention of any article/clause that states that the sales contracts and HSSAs are just an addition to the BSA, nor any clause that states that addendum and parties to BSA and addendum would be governed by the clauses of sales contracts and HSSAs. Defendants No. 2 & 3 are individual companies. Therefore, the contracts or agreements entered into between Defendants no 2 & 3 and the plaintiff containing an arbitration clause with the place of arbitration in India will be enforceable separately.”

34. The findings and conclusions have been summed up by the High

Court in paragraph 60 in the following manner:

“60. This court finds that the BSA, Addendum, and Sales contracts, along with HSSAs are distinct contracts having different parties, differing scope of work and different arbitration clauses. Merely stating that the defendant no 2 & 3 are the companies which are run by the defendant no.1 is not sufficient. Defendants No. 1 and the plaintiff have entered into the BSA and Addendum as individual entities therefore, any dispute that arises out of these agreements will be resolved as per the dispute resolution mechanism provided in the articles of these agreements, i.e., as per article 11 of BSA and article 5 of Addendum. The Initiation of arbitration proceedings under CAMEC in April 2023 and issuance of the Fludor NOA, demonstrate that the Plaintiff‟s concerns stem from the BSA read with the Addendum as the cause of action of the present Suit is all rooted in the BSA and the Addendum. Therefore, disputes, if any, are to be adjudicated as per the Parties’ chosen adjudicatory forum, i.e., under Article 11 of the BSA and the arbitration clause provided under Article

24 11 of the BSA. Clearly Plaintiff has never questioned the validity of BSA and Addendum, which means that the Agreements are not null, void, inoperative or incapable of being performed.” (emphasis supplied)

In terms of the above, the High Court of Delhi allowed respondent no. 1’s

application under Section 45 and dismissed the suit filed by the petitioner.

35. Findings of High Court of Delhi as ‘Issue Estoppel’: Importantly,

these findings relating to (i) the autonomy and separateness of the

contractual frameworks, (ii) the absence of any common arbitration

agreement across respondents, and (iii) the impossibility of construing the

BSA as having been novated by the later consignment-based contracts,

are findings of jurisdictional fact. Once such jurisdictional facts have been

adjudicated by a competent court, they cannot be reopened in subsequent

proceedings between the same parties. The petitioner, having

unsuccessfully canvassed the very same assertions before the High

Court, is now barred by issue estoppel from reagitating those issues in a

slightly altered statutory setting. The doctrine applies with full force even

though the present proceeding is under Section 11 and the earlier one

was under Section 45, for the identity of the issue, namely the operative

agreement, the seat of arbitration, and the scope of the respective

arbitration clauses, remains the same.

25

36. This Court in Hope Plantations Ltd. v. Taluk Land Board Peermade

& Anr.15 has elaborated upon ‘issue estoppel’ by observing as under:

“26. It is settled law that the principles of estoppel and res judicata are based on public policy and justice. Doctrine of res judicata is often treated as a branch of the law of estoppel though these two doctrines differ in some essential particulars. Rule of res judicata prevents the parties to a judicial determination from litigating the same question over again even though the determination may even be demonstratedly wrong. When the proceedings have attained finality, parties are bound by the judgment and are estopped from questioning it. They cannot litigate again on the same cause of action nor can they litigate any issue which was necessary for decision in the earlier litigation. These two aspects are “cause of action estoppel” and “issue estoppel”. These two terms are of common law origin. Again, once an issue has been finally determined, parties cannot subsequently in the same suit advance arguments or adduce further evidence directed to showing that the issue was wrongly determined. Their only remedy is to approach the higher forum if available. The determination of the issue between the parties gives rise to, as noted above, an issue estoppel. It operates in any subsequent proceedings in the same suit in which the issue had been determined. It also operates in subsequent suits between the same parties in which the same issue arises. Section 11 of the Code of Civil Procedure contains provisions of res judicata but these are not exhaustive of the general doctrine of res judicata. Legal principles of estoppel and res judicata are equally applicable in proceedings before administrative authorities as they are based on public policy and justice.” (emphasis supplied)

37. Further, in Anil v. Rajendra 16 this Court noted that once there is

refusal to refer to arbitration under Section 8 of the Act, 1996, parties

thereafter cannot seek reference to arbitration under Section 11(6) as the

earlier refusal under Section 8 amounts to issue estoppel. It was observed

that;

“15…….Thus, once the judicial authority takes a decision not to refer the parties to arbitration, and the said decision having become final,

15 (1999) 5 SCC 590.

16 (2015) 2 SCC 583.

26 thereafter Section 11(6) route before the Chief Justice is not available to either party.”

38. In the totality of circumstances, therefore, the findings of the High

Court of Delhi furnish a cogent and authoritative factual foundation against

which the present petition must be tested. When those findings are read

conjointly with the statutory framework under Sections 2(1)(f) and 2(2) of

the 1996 Act and the jurisprudence laid down in above referred judicial

pronouncements, the legal position becomes unequivocal: (i) the BSA

constitutes the mother agreement; (ii) the juridical seat of arbitration is

Benin; (iii) the governing and curial law is the law of Benin; (iv) Part I of

the Act stands excluded by operation of law; (v) Indian courts lack

jurisdiction to appoint an arbitrator for a foreign-seated arbitration; (vi)

after the commencement and during the subsistence of international

commercial arbitration at Benin, the petitioner filed the anti-arbitration

injunction suit, but failed to obtain any order or direction, (vii) in the

meanwhile, international commercial arbitral proceedings culminated in

the final award dated 21.05.2024, and finally (viii) the Delhi High Court

dismissed the anti-arbitration injunction suit considering the very same

issues raised herein and as such the petitioner will be estopped from

raising the same issues.

39. The petitioner’s endeavor to confer jurisdiction upon this Court by

invoking ancillary contracts of a different genus, executed with different

27 parties, and containing materially different arbitration clauses, is wholly

misconceived and contrary to the territorial principle that lies at the heart

of the 1996 Act. The petition, therefore, is not merely untenable, it is

foreclosed both in law and on account of estoppel arising from the

petitioner’s own prior litigation conduct.

40. Misplaced reliance on Group of Companies Doctrine: At this

juncture, we must also answer the argument raised by Mr. Devadatt

Kamat that under the group of companies doctrine, respondent nos. 2 and

3, though not signatories to the BSA, should nonetheless be made parties

for a composite arbitration. The group of companies doctrine, as

recognised in Indian law, is not an automatic talisman for impleading every

corporate entity of a group into arbitral proceedings. This Court in Cox &

Kings was at pains to emphasise that the doctrine is applied sparingly and

only where there is compelling evidence of mutual intention of all the

parties concerned to bind a non-signatory to an arbitration agreement.

Such intention may be inferred from direct participation in negotiation,

performance of contract, or from the role played in the overall transaction.

However, a mere overlap of shareholding, or the fact that entities belong

to the same corporate family, is not by itself sufficient. It was observed:

“93. Moreover, since the companies in a group have separate legal personality, the presence of common shareholders or Directors cannot lead to the conclusion that the subsidiary company will be bound by the acts of the holding company. The statements or representations made by promoters or Directors in their personal

28 capacity would not bind a company. Similarly, the mere fact that the two companies have common shareholders or a common Board of Directors will not constitute a sufficient ground to conclude that they are a single economic entity….” (emphasis supplied)

V. Conclusion and Decision:

41. Hence, the reliance placed by the petitioner on group of companies

doctrine is misplaced in light of the foregoing analysis.

42. For the reasons stated above, Arbitration Petition No. 65 of 2023

filed under Section 11(6) read with Section 11(12)(a) of the Act, 1996 is

hereby dismissed.

43. Parties shall bear their own costs.

………………………………....J. [PAMIDIGHANTAM SRI NARASIMHA]

………………………………....J. [ATUL S. CHANDURKAR]

NEW DELHI;

NOVEMBER 21, 2025

29