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2014 (8) TMI 1120 - GUJARAT HIGH COURTArbitration and Conciliation - reliefs claimed to hold the directors personally liable for their alleged prejudicial conduct against the interest of the company - Held that:- The majority directors are already held to be necessary parties. In such derivative action, if the reliefs are claimed to hold the directors personally liable for their alleged prejudicial conduct against the interest of the company, they are joined in the company petition for their fiduciary relationship as directors with company and such reliefs cannot be granted in their absence. Since they are not parties to the arbitration agreement, they cannot be referred to arbitration. They therefore, cannot be bound by the result of the arbitration. The Court is, therefore, of the view that the CLB has not committed any error in holding that neither the company nor the respondent Nos. 4 to 8 of the company petition are parties common to the arbitration agreement. In view of such conclusion, the arguments raised by both the sides and the judgments relied on the question of issue Estoppel, on the question that since other agreements are connected with joint venture and therefore, the parties to such agreements could be referred to arbitration or they could be said to be claiming through parties to arbitration agreement, are not required to be considered. Similarly, the question about the intention of the parties to relate the dispute to all agreements is also not required to be considered. In view of the joint venture agreement, reference of part of the matter to the arbitration would not amount to bifurcation of subject matter of the company petition. However, when the Court finds that entire matter before the CLB is not referable to the arbitration, even if the parties are taken to be bound by JVA, it is not permissible to bifurcate the matter and the cause of action for referring the matter to the arbitration. In any case, in the context of Section 8 of the Arbitration Act, as held by the Hon'ble Supreme Court in the case Sukanya Holdings (P) Ltd. Vs. Jayesh H. Pandya and Another reported in MA: (2003 (4) TMI 435 - SUPREME COURT OF INDIA)it is not permissible to make reference for part of the matter For the reasons stated above, no interference is called for in the impugned order in exercise of the powers under Article 226/227 of the Constitution of India. The petition is, therefore, dismissed. Interim relief, if any, stands vacated. Rule is discharged.
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