Arbitration clause applies to company petition where oppression claims arise from the same joint venture dispute.

A company petition under sections 397 and 398 of the Companies Act, 1956 was treated as referable to arbitration under section 8 of the Arbitration and Conciliation Act, 1996 because the reliefs arose from a joint venture agreement and connected articles of association containing an arbitration clause. The objections that some petitioners were not signatories and that the dispute could not be bifurcated were rejected, as the petition was substantially between parties bound by the arbitration agreement and the issues overlapped with the contractual dispute. The section 8 application having been filed before the first statement on the substance of the dispute, the statutory requirements for reference were satisfied, and the petition was dismissed.

---

---

Issues: Whether the company petition under sections 397 and 398 of the Companies Act, 1956 was liable to be referred to arbitration under section 8 of the Arbitration and Conciliation Act, 1996.

Analysis: The dispute arose out of the joint venture agreement and the connected articles of association, both of which contained an arbitration clause. The reliefs sought in the company petition were found to stem from the alleged breach and termination of that agreement and the consequential corporate actions. The objection that some petitioners were not signatories to the arbitration agreement was rejected since petitioner No. 3 was not a necessary shareholder claimant for relief under sections 397 and 398, and the petition was treated as substantially between parties bound by the arbitration clause. The contention that the subject-matter could not be bifurcated was also rejected because the dispute in the petition was found to coincide with the contractual dispute covered by arbitration. As the application under section 8 was filed before the first statement on the substance of the dispute, the statutory preconditions for reference were held to be satisfied.

Conclusion: The matter was held referable to arbitration, and the company petition was dismissed.

Ratio Decidendi: When the subject-matter of the proceeding is substantially the same as the subject-matter of an arbitration agreement, and the section 8 application is made before the first statement on the substance of the dispute, the judicial authority must refer the parties to arbitration.

---