Mixed company disputes cannot be split for arbitration, and share-issuance restrictions repugnant to statute are unenforceable.

A mixed company petition involving non-signatories and reliefs beyond the arbitration agreement was not capable of piecemeal reference to arbitration, so the section 8 application was rejected. A contractual clause and corresponding articles provision purporting to control further issue of shares could not be enforced where they conflicted with the statutory scheme under the Companies Act. On the interim material, the proposed rights issue was pro rata, no strong prima facie case of oppression was shown, and the balance of convenience favoured the company, so restraint on the issue was refused.

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Issues: (i) whether the disputes raised in the company petition were liable to be referred to arbitration under the arbitration clause in the agreement; (ii) whether the clause in the agreement and the corresponding article in the articles of association could be relied upon to restrain the company from proceeding with the rights issue.

Issue (i): whether the disputes raised in the company petition were liable to be referred to arbitration under the arbitration clause in the agreement.

Analysis: The agreement was between the company and only some of the petitioners, whereas the company petition arrayed several respondents who were not parties to the arbitration agreement. The petition also sought reliefs beyond the agreement, including directions against other directors and an injunction on corporate actions. Since only part of the disputes overlapped with the contract and the proceeding comprised mixed claims involving non-signatories, the matter could not be split and referred piecemeal to arbitration.

Conclusion: The dispute was not referred to arbitration and the application under section 8 was rejected.

Issue (ii): whether the clause in the agreement and the corresponding article in the articles of association could be relied upon to restrain the company from proceeding with the rights issue.

Analysis: The clause conferring an affirmative vote over further issue of shares was inconsistent with the statutory scheme governing further issue of shares and with the company's articles based on the statutory model. By virtue of the overriding effect of the Companies Act, a contractual arrangement or article repugnant to the Act could not be enforced in this proceeding. On the interim facts, the rights issue was proposed on a pro rata basis, no strong prima facie case of oppression was made out on other grounds, and the balance of convenience favoured the company.

Conclusion: The clause could not be used to restrain the rights issue, and the company was permitted to proceed with the issue.

Final Conclusion: The company obtained permission to proceed with the proposed rights issue, while the request to send the disputes to arbitration failed; the interim restraint was vacated, and the matter continued on the company petition.

Ratio Decidendi: A contractual or article-based restriction on issuance of shares cannot be enforced in a proceeding where it is repugnant to the statutory scheme, and a mixed company petition involving non-signatories and issues beyond the arbitration agreement is not liable to be referred to arbitration piecemeal.

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