Ch. Mohd. Sharief Tariq, Members - (1.) Under adjudication is an application numbered as C.A.I. of 2015 filed in C.P. No. 31 of 2015 before the Company Law Board. The C.A. has been filed by the Applicant/Respondents No. 3 to 10 against Respondents/Petitioner Nos. 1 and 2 and Respondent No. 3/Respondent No. 1 and Respondent No. 4/Respondent No. 2. The C.A. has been filed under Section 8 of the Arbitration and Conciliation Act, 1996 stating therein that the entire dispute between the Applicant/Respondents and Respondent/Petitioners and Respondents/Respondents arose out of the Shareholders Agreement dated 12.07.2013. Clause 13 of shareholders agreement provides for resolution of all disputes relating to the share agreement by arbitration by 3-member arbitral tribunal. For the sake of convenience, the said clause is reproduced as under:- "The parties will attempt to settle any dispute between them related to this Agreement in an amicable and expeditious manner as follows:- 13.1 The party raising the dispute must first provide a written description of the nature of the dispute, disagreement or claim in writing and provide this to the other Party. If the parties are unable to resolve the dispute within ten (10) days of receiving the written notice above, the disputing party may serve a written notice to the other party for a meeting to discuss the possibilities of resolving the dispute, disagreement, or claim without resort to arbitration. If this meeting fails to reach an agreement, the disputing party may submit the dispute to arbitration in the manner detailed below: 13.2 Arbitration. All arbitral proceedings undertaken by the Parties under this Agreement shall be governed by the Arbitration and Conciliation Act, 1996. The Arbitral tribunal shall be composed of 3 arbitrators, one appointed by each Party and the third independent arbitrator appointed by the two appointed arbitrators. The arbitral proceedings will be held in Chennai in English language. The award of the arbitral tribunal shall be final and binding upon the parties."
(2.) Under para 5 of the C.A., the Applicants/Respondents stated that they have already referred their disputes pertaining to the Shareholders Agreement for arbitration by their notice dated 04.05.2015 and also appointed Mr. Justice (Retd.) T.N.C. Rangarajan as their Arbitrator and in response, on 04.06.2015. The 1st to 3rd Respondents/Petitioners, 1st Respondent company have, without any reservation, appointed Mr. Justice (Retd.) K.P. Sivasubramanian as their arbitrator. The said arbitrators agreed upon Mr. Justice (Retd.) S. Venkatachalamoorthy as the Presiding Arbitrator. The Respondent-4/Respondent-2 has also agreed to the constitution of the Arbitral Tribunal vide notice dated 22.07.2015. Therefore, the arbitral tribunal has been fully constituted and is expected to hold its preliminary meeting shortly. In the light of this, it is averred that in order to avoid multiplicity of proceedings and the issue raised in the petition that have arisen out of the Shareholders Agreement, be referred to the Arbitral tribunal constituted by the parties themselves. Besides this, it has been asked that the company petition is not maintainable either on law or facts as none of the ingredients of Section 397 and/or 398 of the Companies Act, 1956 are applicable to the alleged acts complained of by the petitioners. Therefore, the company petition is liable to be dismissed in limine.
(3.) The Respondent/Petitioners No. 1 and 2 filed the counter in the C.A. and stated that the petition has been filed under section 397 and 398 of the Companies Act, 1956 wherein the matter complained of pertains to the alleged acts of oppression and mismanagement by Applicants No. 1 to 8/Respondents and Respondent-4/Respondent-2. It is stated that the matter complained of is not arbitrable by the Arbitral tribunal. It has been stated that Applicants No. 2 to 8/Respondents are not the parties to the Arbitration Agreement. It has further been stated that the subject matter of the Shareholders Agreement on the basis of which the Arbitral Tribunal has been constituted pertains to the repayment of money allegedly due by the Respondent/Petitioners and the company petition before this tribunal is for seeking equitable relief against oppression and mismanagement under the Companies Act, 1956. It is further averred that the reliefs are separate and distinct which could only be granted by this Tribunal and not by the Arbitral Tribunal and the matter complained of by the Respondent/Petitioners falls within the jurisdiction of the company law tribunal.;