Decided on April 26,2016

Emgee Housing Private Limited And Ors. Appellant
Els Developers Private Limited Respondents


C.V. Bhadang, J. - (1.) By this petition, the petitioners (respondents before the Arbitrator) are challenging order dated 09.08.2012, passed by the Company Law Board, Mumbai Bench (CLB) in Company Application No. 27/2012 in Company Petition No. 8/397 -398/CLB/MB/2012. By the impugned order, the CLB has dismissed the Company Application No. 27/2012, thereby refusing to refer the dispute to arbitration.
(2.) The brief facts necessary for the disposal of the petition may be stated thus: That, the respondent herein (petitioner before the CLB) had filed the aforesaid company application alleging mismanagement by the petitioners, as majority shareholders of the petitioner No. 1 -Company. That, company petition is filed for seeking action in respect of oppression and mismanagement. It appears that the petitioners filed Company Application No. 27/2012 therein, under Sec. 8 of the Arbitration and Conciliation Act, 1996 (the Arbitration Act, for short), seeking reference of the dispute to the Arbitrator. That application is based on Clause 53 of the Memorandum of Association of the Company, which reads thus: "53. Whenever any differences or disputes arise between the Company on one hand and any of the members or either, heirs, executors, administrators or assigns on the other hand or between the members interest or their executors, administrators or assigns inter se touching the true intent or construction or the incidence or consequences of these presents or the statutes or touching anything when or thereafter done, executed, omitted or suffered in pursuance of these presents or of these presents, or to any of officers of the Company every such differences or disputes shall be referred to the decision of any arbitrator to be appointed by the parties to dispute or in differences or if they cannot agree upon a single arbitrator to the decision of two arbitrators, of whom one shall be appointed by each of the parties to dispute or in difference such arbitration will be governed by the laws for the time being in force."
(3.) It is contended on behalf of the petitioners that Clause 53 of the Memorandum of Association would amount to an agreement between the parties to refer the disputes and differences between the Company on one hand and any of the members or between the members inter se etc. to arbitration. It was contended that the company petition is filed with a view to frustrate the arbitration agreement as contained in Articles of Association. It is contended that in view of the binding agreement, the dispute has to be referred to an Arbitrator, to be appointed by the parties.;

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