SUGAVANESWARA SPINNING MILLS P. LTD. Vs. S. ARUNACHALAM

JUDGEMENT

(1.) THE present application is filed by the respondents in the above company petition under Section 8 of the Arbitration and Conciliation Act, 1996 ("A&C Act"), seeking a direction from this Bench to refer the matter to the arbitration to resolve the disputes since an arbitration agreement exists, i.e., in respect of the parties to the proceedings.

(2.) DR . K.S. Ravichandran, learned practising company secretary submitted that the applicants are respondents Nos. 1 to 13 in the main company petition under Section 397/398 of the Companies Act, 1956 ("the Act"). The allegations and the reliefs sought by the respondents/petitioners in the petition are very much part and parcel of the arbitration agreement dated September 27, 2008, executed between the applicants and the petitioners. Therefore, the parties may be directed to be heard by the Arbitral Tribunal. The learned practising company secretary submitted that the arbitration clause of the arbitration agreement dated September 27, 2008, reads as follows:

(3.) SHRI A.K. Mylsamy, learned Counsel for the respondents in this application submitted orally that the parties signed the arbitration agreement earlier and scored off the same. Hence, there is no agreement valid in the eye of law. Moreover, out of five petitioners, only four were parties to the said arbitration agreement. In any case, the arbitration agreement is not valid in law. Furthermore, the respondents/petitioners herein sought various other reliefs under Section 397/398 read with Section 111 of the Act, and the same cannot be decided by the arbitrator and the parties are also not the same as contended by the applicant herein. In view of the non -validity of the arbitration agreement, the parties cannot be referred to arbitration, since there is no valid agreement in the eye of law, since the parties scored off their signatures. Hence, the application is devoid of merits and liable to be dismissed.