Home Case Index All Cases Companies Law Companies Law + HC Companies Law - 2014 (8) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (8) TMI 1050 - HC - Companies LawArbitrable disputes - Dispute covered by an arbitration agreement - Is a dispute brought before the Company Law Board invoking the provisions of Sections 397, 398 and 402 of the Companies Act, 1956 at all referable to a private tribunal, viz., an arbitral panel for resolution? - Does a decision of a foreign court on the question of whether a dispute is covered by an arbitration agreement bind the Company Law Board? - Held that:- As to whether the disputes in a petition properly brought under Sections 397 and 398 read with Section 402 of the Companies Act, 1956 can be referred to arbitration, the answer is no, subject to the caveat that I have noted regarding a mala fide, vexatious or oppressive petition and one that is merely 'dressing up' to avoid an arbitration clause. The decision of Mr. Justice Walker of the UK Commercial Court of the Queen's Bench Division was not covered by any of the exceptions to Section 13 of the CPC. It was not contrary to Chloro Controls. It therefore bound the CLB. As Mr. Justice Walker had already held that the CLB disputes fell outside the arbitration clause, the impugned order is incorrect in its finding that the disputes in the petition were covered by the arbitration clause. Even otherwise, the disputes before the CLB were outside the purview of the arbitration agreement as they related to matters not covered by the SSD. The appointment of an observer-cum-facilitator was entirely without warrant and served no effective purpose. The impugned order is upheld only to the extent that it holds that disputes in a properly brought petition under Sections 397 and 398 read with Section 402 of the Companies Act, 1956 are not referable to arbitration. The CLB's finding that the disputes were referrable to arbitration is incorrect in law. Application for stay - Held that:- It would be wholly inequitable to allow this state of affairs to continue. There cannot possibly be any equity in Rakesh's favour in a situation like this. The irreversible prejudice that Mr. Madon apprehends is, think, far outweighed by the considerably more profound prejudice and harm likely to result to RKM, his fellow-petitioners and the Transauto companies if the status quo or interim arrangement is continued. Such orders, once passed, tend to continue and are difficult to dislodge. As believed that equity now demands that Rakesh must assume the burden of satisfying a court in appeal from this judgment why the previous status quo or interim arrangement that has worked so unfairly to RKM and the Transauto companies should be allowed to continue. Find no justification for it. As to the question of a freeze on the shareholding and the fixed assets, as believed this to be something of a red herring and perhaps a complete misconception. There is no question of a change in shareholding at all, and therefore no question of a 'stay' continuing in that respect. There is also no warrant for any 'stay' on the fixed assets of the four respondent companies continuing. The application for stay is rejected. Mr. Chinoy's request that the pending interim orders of 9th February 2012 and 7th November 2012 passed by the CLB be allowed to continue is one that must be accepted. It is clarified that, except for those two orders, there will now be no interim order in place as regards any of the four respondent companies. Parties are at liberty to make such applications as they think fit for further suitable interim orders. The Company Law Board will consider every such application on its merits.
|