Reshaping Group Companies Doctrine

A five Judge Constitution Bench of the Supreme Court, in Cox and Kings Ltd. vs SAP Pvt. Ltd. ("Cox and Kings"), delivered a ruling on the Group of Companies' doctrine ("GCD").

For long, the application of GCD was doubted due to its intrusion with well-settled principles of "party autonomy", "privity of contract", and "separate legal personality". The result was an unclear jurisprudence on GCD, since its adoption by the Indian Supreme Court in 2012 in the case of Chloro Controls (India) (P) Ltd. v. Severn Trent Water Purification Inc. ("Chloro Controls") ¹. Significant challenges in applying the doctrine, especially in the context of corporate conglomerates, led to inconsistent decisions.