Arbitration clause does not bar winding-up proceedings for an unregistered company; the matter is special and operates in rem.

Section 34 of the Arbitration Act did not bar a company-court winding-up proceeding concerning an unregistered company. The proceeding was treated as a special company matter, not an ordinary civil suit between parties, and it culminated in an order in rem rather than an order in personam. On that basis, the arbitration clause could not be used to stay the winding-up petition, and the stay application was rejected.

---

---

Issues: Whether the application to stay the company petition was maintainable on the ground that the dispute had to be referred to arbitration and that winding-up proceedings in respect of an unregistered company could not proceed.

Analysis: Section 34 of the Arbitration Act applies where a legal proceeding is sought against a party to an arbitration agreement in relation to disputes that are required to be resolved by arbitration. The present proceeding was not a civil suit between partners for relief inter se, but a company-court proceeding for winding up a body of persons answering the description of an unregistered company under section 582 of the Companies Act. Such a proceeding is of special character, is not a civil suit, and culminates in an order in rem rather than an order in personam. On that basis, the arbitration clause could not bar the winding-up proceeding.

Conclusion: The application for stay was not maintainable and was rejected.

Ratio Decidendi: Section 34 of the Arbitration Act does not bar a winding-up proceeding concerning an unregistered company, because such a proceeding is special in nature and results in an order in rem, not a legal proceeding against a party to the arbitration agreement in the ordinary civil sense.

---