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2022 (11) TMI 284 - SC - Indian LawsRefusal to appoint an arbitrator and refer the dispute to the arbitrator - Section 11(6) of the Arbitration and Conciliation Act, 1996 - HELD THAT:- Considering the fact that Share Subscription and Shareholders Agreement dated 27.04.2016 entered into between the appellants and the respondent contains the arbitration clause in case of dispute between the parties arising out of the said agreement, we are of the opinion that the High Court ought to have allowed the application under Section 11(6) of the Act, 1996 and ought to have left the issue on arbitrability of dispute between the parties to the arbitrator. The High Court has refused to appoint an arbitrator, interalia, on the ground that at the time when the application was filed there were already arbitral proceedings pending between the parties and the award was passed and also on the ground that the proceedings were pending before the NCLT at the instance of the respondent on the allegation of mismanagement and oppression which was filed by the respondent as minority shareholder. Refusal to refer the dispute between the parties and appoint an arbitrator, namely that the proceedings at the instance of the respondent as minority shareholder for oppression and mismanagement is pending before the NCLT - HELD THAT:- On the pendency of such proceedings the application under Section 11(6) of the Act, 1996 cannot be dismissed. It should be left to the arbitrator to consider the entire aspect. The dispute is with respect to the Share Subscription and Shareholders Agreement which is altogether different from the allegations of mismanagement and oppression at the instance of minority shareholder initiated by the respondent. The High Court has erred in dismissing the application under Section 11(6) of the Act, 1996 and has erred in refusing to appoint an arbitrator with respect to the dispute between the parties with respect to the Share Subscription and Shareholders Agreement dated 27.04.2016. The impugned judgment and order passed by the High Court is set aside - Appeal allowed.
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