Non-arbitrability of oppression and mismanagement claims where statutory remedies can be granted only by the tribunal.

Disputes alleging oppression and mismanagement under the Companies Act, 1956 were held not to be referable to arbitration under section 8 of the Arbitration and Conciliation Act, 1996 where the reliefs sought depended on special statutory powers under sections 397, 398, 402 and 403. Those provisions form a distinct statutory code conferring remedies and powers on the Company Law Board that an arbitrator cannot exercise. An arbitration clause in the articles of association, and even the parties' consent, cannot confer arbitral jurisdiction over rights and remedies withheld by statute. The reference application therefore failed, and the dispute remained non-arbitrable.

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Issues: Whether disputes raised in a petition alleging oppression and mismanagement under the Companies Act, 1956 could be referred to arbitration under section 8 of the Arbitration and Conciliation Act, 1996 on the basis of an arbitration clause in the articles of association.

Analysis: Section 8 of the Arbitration and Conciliation Act, 1996 is mandatory only where the dispute brought before the judicial authority is one that the arbitrator is competent to decide. The remedies under sections 397, 398, 402 and 403 of the Companies Act, 1956 form a special statutory code for relief against oppression and mismanagement and confer powers on the Company Law Board that cannot be exercised by an arbitrator. The statutory rights of shareholders under these provisions cannot be defeated by an arbitration clause in the articles of association, and consent cannot create arbitral jurisdiction where the statute withholds it.

Conclusion: The oppression and mismanagement dispute was not arbitrable and could not be referred to arbitration; the application for reference under section 8 failed.

Ratio Decidendi: A dispute is not referable to arbitration under section 8 of the Arbitration and Conciliation Act, 1996 if the reliefs sought arise from special statutory powers that only the court or statutory tribunal can grant.

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