GMR Energy Limited vs Doosan Power Systems India Private Limited & Ors.
2017: DHC: 6911; 2017 SCC OnLine (Del) 11625
Coram: Hon'ble Justice Mukta Gupta
Forum: Hon’ble High Court of Delhi
Case No.: Civil Suit (Commercial) No. 447 of 2017
Date of Decision: November 14, 2017
Conclusion

Facts & Background:
- GMR Energy Limited (GMR Energy) was the Plaintiff.
- The defendants in the case were:
- Doosan Power Systems India Pvt. Ltd. (Doosan India), the sole contesting defendant, as Defendant No. 1;
- GMR Chhattisgarh Energy Limited (GCEL) as Defendant No. 2; and
- GMR Infrastructure Ltd. (GIL), the proforma defendant, as Defendant No. 3.
- On 22nd January 2010, Doosan India and GCEL entered into three Engineering, Procurement, and Construction (EPC) agreements containing arbitration clauses under the Singapore International Arbitration Centre (SIAC) Rules.
- On 17 December 2013, GIL executed a Corporate Guarantee containing an arbitration clause under the SIAC Rules on behalf of GCEL for the liabilities arising from the EPC agreements.
- On July 1, 2015, and October 30, 2015, Doosan India and GMR Energy executed two MOUs. In these MOUs, GMR Energy agreed to discharge GCEL's liabilities under the EPC agreements, though no arbitration clauses were included.
- On 11 December 2016, Doosan India issued a notice of arbitration to GCEL, GIL, and GMR Energy, invoking the arbitration clauses in the EPC agreements and Corporate Guarantee and seeking enforcement of joint and several liabilities. GCEL binds the EPC agreements and GMR Energy by the MOUs and corporate governance.
- In response to the notice, GMR Energy objected to its inclusion in the arbitration, claiming it was not a party to the EPC agreements or the Corporate Guarantee, and requested discharge from the arbitration proceedings.
- Notwithstanding GMR Energy's objections, SIAC appointed an arbitrator on its behalf, prompting GMR Energy to file a suit in the Delhi High Court seeking a permanent injunction to prevent arbitration proceedings.
- GMR Energy applied for an ad-interim ex-parte stay on the arbitration under Order XXXIXRule 1 and 2 of the CPC, arguing it could not be compelled to arbitrate due to its non-party status to the agreements.
- On July 4, 2017, the Delhi High Court granted an ad-interim ex-parte order, staying the appointment of an arbitrator for GMR Energy and restraining the commencement of arbitration proceedings against it. The interim order continued thereafter.
- GMR Energy filed a suit seeking a decree of permanent injunction restraining Doosan India and its agents from instituting or continuing arbitration proceedings against GMR Energy before SIAC in Arbitration No. 316/2016.
Main Issue:
- Would the arbitration in Singapore under Arb.316/16/ACU fall under Part I or II of the Arbitration Act?
- Whether on the basis of pleas in the notice of arbitration issued by Doosan India a case was made out by Doosan India to subject GMR Energy to arbitration with GCEL and GIL?
- Whether the Arbitral Tribunal has no jurisdiction to pierce the corporate veil?
- In the present suit ,whether this Court will form a prima facie opinion on the issue of alter ego or return a finding?
- Whether the arbitration against GMR Energy is contrary to Rule 7 of SIAC Rules?
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