Case Law Details
VGP Marine Kingdom Pvt Ltd & Anr. Vs Kay Ellen Arnold (Supreme Court of India)
Conclusion: Hon’ble Supreme Court held that the application under Section 11(6) of the Arbitration and Conciliation Act, 1996 cannot be dismissed on the pendency of proceedings before the National Company Law Tribunal (NCLT) initiated by the respondent for various acts of oppression and mismanagement as a minority shareholder.
Facts: In present case, the appellant feeling aggrieved and dissatisfied with the impugned judgment and order dated 05.08.2021 passed by the High Court of Judicature at Madras, by which, the High Court has dismissed the said application under Section 11(6) of the Arbitration and Conciliation Act, 1996 and has refused to appoint an arbitrator and refer the dispute to the arbitrator, original applicant has preferred the present appeal.
The appellants herein approached the High Court under Section 11(6) of the Act, 1996 to appoint an arbitrator so that the arbitral tribunal can be constituted in terms of clause 17.1.2 of the Share Subscription and Shareholders Agreement. By the impugned judgment and order, the High Court has dismissed the said application and refused to appoint an arbitrator mainly on the grounds that at the time when the application under Section 11(6) of the Act, 1996 was filed in the year 2019, the matter was already referred to the arbitral tribunal with respect to agreement dated 27.04.2016, subsequent amendment agreement dated 06.12.2017 and addendum agreement dated 28.05.2018 and also on the ground that the proceedings were pending before the National Company Law Tribunal (NCLT) initiated by the respondent for various acts of oppression and mismanagement as a minority shareholder.
After taking submissions of both sides into consideration, the Hon’ble Supreme Court observed 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, and therefore 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.
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