2009 (12) TMI 518 - HC - Companies Law

Summary

Issues:
1. Validity of the rejection of the application seeking appointment of an arbitrator by the Company Law Board.

Analysis:
The judgment in question pertains to an appeal filed by respondents before the Company Law Board challenging the rejection of their application seeking the appointment of an arbitrator under section 8 of the Arbitration and Conciliation Act, 1996. The appellants contended that the disputes raised in the company petition were subject to arbitration as per the financial collaboration agreement. However, the Company Law Board rejected the application on the grounds that the original agreement or its certified copy was not filed. The High Court noted that the existence of the agreement was not disputed and found the rejection by the Company Law Board to be legally flawed.

The High Court referenced the decision in Bharat Sewa Sansthan v. U. P. Electronics Corporation Ltd., where it was held that if the original agreement is in possession of the opposite party, the applicant is not required to produce it. In light of this precedent, the High Court concluded that the appellants were not obligated to produce the original agreement and set aside the Company Law Board's order. The matter was remanded back to the Company Law Board for reconsideration of the application on its merits in accordance with the law.

In conclusion, the High Court allowed the appeal, emphasizing that the Company Law Board should reconsider the application before proceeding further in the matter. The High Court's decision highlights the importance of adhering to legal procedures and considering the existence of agreements in arbitration matters, ultimately ensuring a fair and just resolution in accordance with the law.