“Section 2(1)(f)(iii) of The Act refers to two different sets of persons: an “association” as distinct and separate from a “body of individuals”. For example, under Section 2(31) of The Income Tax Act, 1961, “person” is defined as including, under Sub-Clause (v), an association of persons, or body of individuals, whether incorporated or not. It is in this sense, that an association is referred to in Section 2(1)(f)(iii) which would therefore include a consortium consisting of two or more bodies corporate, at least one of whom is a body corporate incorporated in a Country other than India.
Further, the expression “a company or” which was originally at the beginning of Section 2(1)(f)(iii) was omitted by Act 3 of 2016. It would become clear that prior to the deletion of the expression “a company or”, there were three sets of persons referred to in Section 2(1)(f)(iii) as separate and distinct persons who would fall within the said Sub-Clause. This does not change due to the deletion of the phrase “a company or” for reasons given by the Law Commission. This is another reason as to why “an association” cannot be read with “body of individuals” which follows it but is a separate and distinct category by itself, as is understood from the definition of “person” as defined in The Income Tax Act referred to above.
This is not a case of an International Commercial Arbitration.
An Indian company is the lead partner, and that the supervisory board constituted under the Consortium Agreement makes it clear that the lead partner really has the determining voice in that it appoints the chairman of the said board (undoubtedly, with the consent of other members); and the fact that the consortium’s office is in Wadala, Mumbai as also that the lead member shall lead the Arbitration Proceedings, would all point to the fact that the central management and control of this consortium appears to be exercised in India and not in any Foreign Nation.”
– Hon’ble Justice R.F. Nariman, M/s Larsen and Toubro Limited v. Mumbai Metropolitan Region Development Authority, [Arbitration Petition (C) No. 28 of 2017].
Thus, even though, generally speaking, Section 2(1)(f)(iii) may include a consortium consisting of two bodies corporate, at least one of whom is a body corporate incorporated in a Country other than India, the Section would be inapplicable if the central management and control of the consortium is exercised in India and not in any Foreign Nation.
Also see, Amway India Enterprises Pvt. Ltd. v. Ravindranath Rao Sindhia, [Civil Appeal No. 810 of 2021].