Home Case Index All Cases Companies Law Companies Law + HC Companies Law - 2010 (2) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2010 (2) TMI 589 - HIGH COURT OF BOMBAYArbitral award dated 14-1-2006, of a sole arbitrator challenged - Held that:- The award is contrary to substantive provisions of law and is patently illegal. The illegality in the present case, is something that goes to the root of the matter and is certainly not one which can be termed as of a trivial nature. The award must, in the circumstances, be held to be contrary to public policy.The arbitrator proceeded on the basis that the presence of a clause conferring a right of pre-emption in the articles of association was sufficient to dispose of the challenge to the legality of the provision. In this, the arbitrator has fallen into a patent illegality. The fact that the restriction is contained in the articles of association would deal with the submission based on the application of the V.B. Rangaraj’s case (1991 (11) TMI 195 - SUPREME COURT OF INDIA), principle. But that is not dispositive of the legality of a provision by which a right of pre-emption is created in the case of a public limited company. The arbitrator has ignored the express and specific provisions of the Companies Act, 1956; lost sight of the very concept of free transferability of the shares of a public limited company and failed to apply the provisions of section 9 under which overriding force is given to the Act notwithstanding anything to the contrary contained in the memorandum, articles or agreement. The award of the learned arbitrator would have to be set aside. The petition is, accordingly, made absolute in terms of prayer clause (a) by setting aside the award
|