2002 (2) TMI 1319 - Board - Companies Law

Summary

Issues Involved:
1. Application u/s 8 of the Arbitration and Conciliation Act, 1996.
2. Allegations of oppression and mismanagement u/s 397/398 of the Companies Act, 1956.
3. Validity and enforcement of the agreement dated 15-1-2001.
4. Applicability of arbitration clause to the disputes raised.

Summary:

1. Application u/s 8 of the Arbitration and Conciliation Act, 1996:
The respondents filed an application u/s 8 of the Arbitration Act to refer the matter to arbitration based on an agreement dated 15-1-2001, which contained an arbitration clause. The petitioner opposed this, arguing that the grievances relate to oppression and mismanagement, which cannot be arbitrated.

2. Allegations of oppression and mismanagement u/s 397/398 of the Companies Act, 1956:
The petitioner, a promoter holding 2625 shares, alleged acts of oppression and mismanagement by the respondents, including exclusion from the company's management and non-payment of instalments as per the agreement. The petitioner sought various reliefs, including specific performance of the agreement and reinstatement as a director.

3. Validity and enforcement of the agreement dated 15-1-2001:
The petitioner claimed that the agreement was breached as the employment/consultant contract was not executed, and his resignation was accepted without a proper board meeting. The petitioner also sought to declare an MOU dated 23-2-2000 as null and void, alleging it was executed without his knowledge.

4. Applicability of arbitration clause to the disputes raised:
The respondents argued that all disputes arose from the agreement dated 15-1-2001, which included an arbitration clause. The petitioner had already invoked this clause by issuing a notice on 19-5-2001. The Board examined whether the disputes could be arbitrated and concluded that all issues in the petition were covered by the arbitration agreement.

Judgment:
The Board held that the arbitration clause in the agreement dated 15-1-2001 covered all the disputes raised by the petitioner. The reliefs sought were based on the terms of the agreement, and the petitioner had already invoked the arbitration clause. Therefore, the Board referred the matter to arbitration u/s 8 of the Arbitration Act and closed the petition.