2012 (12) TMI 53 - HC - Companies Law

Arbitration agreement application for injunction restraining respondent no.1 from further pursuing its request for arbitration Held that - Alleged that the arbitration agreement contained in the agreement is void and/or unenforceable, a decree of permanent injunction restraining the defendant no.1 in the suit, their officers, employees, etc. from initiating and/or continuing with the said arbitration proceeding this is a case where the learned Trial Judge ought to have passed an interim order of injunction pending the final disposal of the application for injunction - appellant had been able to make out a prima facie case - direct that there shall be an interim order of injunction in terms of prayers of the application for injunction filed in connection with the present appeal

Summary

Issues involved:
- Appeal against refusal of interim relief by Trial Judge
- Application for injunction against arbitration proceedings

Analysis:
The appellant filed an appeal against the Trial Judge's order refusing interim relief in a case where the plaintiff sought a declaration that an arbitration agreement was void. The appellant also applied for an injunction to stop respondent no.1 from proceeding with arbitration. The appellant company, incorporated in 1985, was involved in a dispute regarding share transfer agreements dating back to 2002. Initially, the Company Law Board allowed the transfer of shares to the Chatterjee group, but this decision was later dismissed by the High Court and the Supreme Court. Subsequently, respondent no.1 filed a Request For Arbitration regarding the registration of shares. The Trial Judge refused to grant interim relief, leading to the appeal and injunction application.

The High Court, after considering submissions from both parties, found that the Trial Judge should have granted an interim injunction based on a prima facie case made by the appellant. The Court believed that the balance of convenience favored granting the injunction for a limited period. Therefore, the High Court directed an interim injunction in favor of the appellant until the final disposal of the injunction application. The Court extended the time for filing affidavits and requested the Trial Judge to expedite the process and dispose of the injunction application promptly. The Court emphasized that the interim injunction would last for eight weeks or until further notice, allowing the Trial Judge to make a final decision on the injunction application. The Court concluded by disposing of the application and appeal without any costs imposed on either party.