Shareholders agreement disputes with an arbitration clause are contractual and arbitrable, not oppression or mismanagement claims.

A shareholders' agreement containing an arbitration clause governed the parties' relationship, and disputes rooted in its terms were treated as contractual and arbitrable. Complaints about meeting notice, share valuation, and allotment were linked to the agreement and amendments, but they did not disclose malice, oppression, or mismanagement in the company. The commentary therefore indicates that mere invocation of sections 397 and 398 is insufficient where the substance of the grievance is breach of contract rather than conduct justifying company law relief, and the parties must pursue the agreed arbitral mechanism.

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Issues: Whether the dispute raised in the company petition was governed by the shareholders agreement and arbitration clause, and whether the allegations disclosed oppression or mismanagement so as to justify proceedings under sections 397 and 398 of the Companies Act, 1956.

Analysis: The dispute arose out of the shareholders agreement and its subsequent amendments, which governed the relationship between the parties and expressly provided for arbitration at the Singapore International Arbitration Centre. The impugned acts complained of, including short notice for meetings, valuation of shares, and the resulting allotment, were found to be rooted in the contractual arrangements between the parties. The allegations did not disclose malice, oppression, or mismanagement of the company, but at best raised complaints of breach of contractual stipulations. The mere invocation of sections 397 and 398 was held insufficient where the substance of the grievance was contractual and arbitrable.

Conclusion: The dispute was held to be referable to arbitration, and the company petition was not maintainable as a proceeding for oppression and mismanagement.

Final Conclusion: The relief sought in the company petition could not be pursued under sections 397 and 398, and the parties were left to resolve the dispute through the agreed arbitral mechanism.

Ratio Decidendi: Where the dispute essentially concerns contractual rights arising from a shareholders agreement containing an arbitration clause, and no substantive case of oppression or mismanagement is made out, the forum must give effect to the arbitral agreement and refer the matter to arbitration.

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