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. Viswanathan, learned Senior Advocate appearing on behalf of the appellants has submitted that in the present case there is a different Share Subscription and Shareholders Agreement dated 27.04.2016 which contains the arbitration clause in case of any dispute between the parties (clause 17.1.2 of the Share Subscription and Shareholders Agreement).
2 Making the above submissions and relying upon the decision of this Court in the case of Vidya Drolia and Ors.
and by supporting the impugned judgment and order passed by the High Court and even relying upon some of the observations made by this Court in the case of Vidya Drolia (supra) has prayed to dismiss the present appeal.
Dispute Resolution, Jurisdiction and Governing Law 1.1
The Parties agree that this Agreement shall be governed by and construed in accordance with the laws of India.
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1.3 Upon issuance of such notice, the Dispute shall be referred to a board of three (3) arbitrators.
Provided that, the Parties agree to submit to the exclusive jurisdiction of the competent courts as may be necessary for the enforcement of an arbitral award obtained in accordance with this Clause 17. 3 So far as the first ground is concerned, at the outset it is required to be noted that according to the appellant, appellant was not a party to the said proceedings and the present Share Subscription and Shareholders Agreement dated 27.04.2016 is an independent agreement and it is the case on behalf of the respondent that all the three agreements are inter-linked and therefore, in view of the above declared award with respect to the other two agreements the present application shall not be maintainable.
The decision of this Court in the case of Vidya Drolia (supra) is a three judges’ bench subsequent decision in which the entire law on the scope and ambit of the Court at the stage of application under Section 11(6) of the Act, 1996 has been dealt with and considered by the Court. In view of the above and for the reasons stated above the High Court has erred in dismissing the application under Section 11(6) of the Act, 1996 and has erred in refusing to appoint an arbitrator with respect to the dispute between the parties with respect to the Share Subscription and Shareholders Agreement dated 27.04.2016.
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The fees of the Arbitrator shall be decided by the learned Arbitrator with the consent of the respective parties as per the Schedule to the Act, 1996 as amended from time to time.
Case Title: VGP MARINE KINGDOM PVT LTD Vs. KAY ELLEN ARNOLD (2022 INSC 1167)
Case Number: C.A. No.-006679-006679 / 2022
