Statutory oppression and mismanagement claims are not ousted by a contractual arbitration clause covering related disputes.

An arbitration clause covering contractual claims does not compel reference of a company petition seeking statutory reliefs for oppression, mismanagement, alteration of share capital, allotment of shares and rectification of the register. Section 8 of the Arbitration and Conciliation Act, 1996 applies only where the dispute before the judicial forum is covered by a valid arbitration agreement and the request is made at the proper stage. Because the company petition invoked powers and remedies conferred independently by the Companies Act, 1956, the statutory grievances were distinct from the contractual claims and remained within the Company Law Board's jurisdiction.

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Issues: Whether the Company Law Board was bound under section 8 of the Arbitration and Conciliation Act, 1996 to refer the disputes to arbitration, and whether the petition alleging oppression and mismanagement under sections 397, 398, 402 and 403 of the Companies Act, 1956 was covered by the arbitration clause in the parties' agreement.

Analysis: Section 8 requires reference to arbitration only when the matter brought before the judicial authority is the subject of a valid arbitration agreement and the application is made at the proper stage. The arbitration clause in the agreement covered disputes arising out of the agreement relating to claims and counter-claims. The reliefs sought in the company petition were statutory reliefs concerning alleged oppression, mismanagement, alteration of share capital, allotment of shares, rectification of the register and allied corporate acts. Those issues were found to arise independently of the agreement and to involve statutory powers conferred exclusively on the Company Law Board. The claims before the arbitral tribunal and the statutory grievances before the Company Law Board were distinct, and the arbitration clause could not oust the jurisdiction to grant remedies under the Companies Act, 1956.

Conclusion: The refusal to refer the company petition to arbitration was justified, and the appeal failed.

Ratio Decidendi: A dispute raising statutory remedies for oppression and mismanagement is not compulsorily referable to arbitration merely because the parties have an arbitration clause covering contractual disputes arising from the same transaction.

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