Hitesh Shah & Anr Vs Aquafil Polymers Company Pvt Ltd & Ors (NCLT Ahmedabad)
Companies Act, 2013 Vis-a-Vis Arbitration Clause in a Contract.
The existence of an arbitration clause does not take away jurisdiction of NCLT to consider and decide allegations of oppression and mismanagement.
NCLT, Ahmedbad Bench observed in its recent judgement dated 18.07.2025 in the matter of Aquafil Polymers Co. Pvt ltd.
Snippets:
1.NCLT clarifies that although the Share Purchase Agreement (SPA) is governed by contractual law, this does not by itself prevent the Tribunal from examining the contract terms if they are integrally connected to such allegations.
2. Mere transfer of shares, even to a party involved in arbitration, does not ipso facto amount to oppression, unless it is shown that such transfer was made with the sole object to prejudice the Directors (Petitioners) or defeat the corporate interest of company.
3. The proceedings u/s 241-242 are equitable in nature.
4. NCLT must address the foundational principle of equity: he who comes to equity must come with clean hands. The very essence of equity requires candour, fairness and transparency.
FULL TEXT OF THE NCLAT JUDGMENT/ORDER
1.This common order is being passed in the Company Petition bearing number CP No. 5 of 2023 which was filed before this Tribunal on 17.01.2023. Upon the course of the proceedings several IAs and Company Applications came to be filed in this Company Petition by both the Petitioners as well as Original Respondents, all arising out of or relating to the same set of facts and underlying disputes forming the subject matter of the main petition. In order to avoid multiplicity of orders and in view of the common issues involved, this common order is being passed to dispose of the Transfer Petition along with all pending IAs and Company Applications.
