Oppression and mismanagement disputes are non-arbitrable when they involve statutory rights and corporate governance reliefs.

Proceedings for oppression and mismanagement under sections 397, 398, 402 and 403 of the Companies Act were treated as involving statutory reliefs, public forum jurisdiction and rights in rem, rather than a private contractual dispute. Because the petition raised substantive allegations of oppression, mismanagement, share transfers, denial of information and breach of articles, the matter could not be split into arbitrable and non-arbitrable parts or referred to arbitration under section 8 of the Arbitration and Conciliation Act, 1996. The dispute was therefore held to be non-arbitrable, and the section 8 application was rejected.

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Issues: Whether a dispute raised in a petition under sections 397, 398, 402 and 403 of the Companies Act, 1956 could be referred to arbitration under section 8 of the Arbitration and Conciliation Act, 1996.

Analysis: The reliefs under sections 397, 398, 402 and 403 confer wide statutory powers on the Company Law Board to address oppression and mismanagement, regulate the company's future affairs, grant interim relief, and pass orders affecting corporate governance and third-party interests. Such proceedings are treated as involving public fora jurisdiction and rights in rem, unlike ordinary contractual claims that are referable to private arbitration. The petition disclosed substantive allegations of oppression, mismanagement, share transfers, denial of information, and violation of articles of association, and could not be reduced to a mere contractual dispute or split into arbitrable and non-arbitrable parts.

Conclusion: The dispute was not arbitrable and the application under section 8 was liable to be rejected.

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