NISHANT
Where petitioners are strangers to the arbitration proceedings, the findings recorded in the arbitration proceedings pending between the respondents inter se could not be made binding to the petitioners
NISHANT MEHROTRA 15 May 2018

Where petitioners are strangers to the arbitration proceedings, the findings recorded in the arbitration proceedings pending between the respondents inter se could not be made binding to the petitioners

Gujrat High Court :: Companies Act, 2013 – Section 241 read with section 7 of the Arbitration and Conciliation Act, 1996 – Oppression / Mismanagement – Petition for relief against – Certain disputes regarding allotment of shares of the respondent company were pending before the arbitral tribunal – Pending arbitration, petitioners, being shareholders, filed petition before NCLT alleging acts of oppression / mismanagement against the respondent company – Could NCLT not pass impugned order holding that decisions on reliefs claimed in company petitions shall depend upon findings of arbitral tribunal when the petitioners were not party to arbitration proceeding not having any arbitration agreement with respondents – Whether there being no arbitration agreement existing between petitioners and respondents for resolving disputes in respect of shares in question, and petitioners being no party to arbitration proceedings pending before arbitral tribunal, NCLT could not have passed impugned order holding that decision on relief claimed by petitioners in company petition shall depend upon findings of arbitral tribunal – Held, yes [Paras 13 & 15].

SYNOPSIS

The High Court has stayed the operation and implementation of the impugned order passed by the NCLT till further orders. It has, inter alia, clarified that it shall be open for the NCLT to proceed further with the company petition in accordance with law, and mere pendency of this petition or pendency of arbitration proceedings shall not come in the way of the NCLT in proceeding further with the said company petition.


Case:

Aum Capital Market (P.) Ltd. v. Jyoti Ltd.

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