Non arbitrability of winding up permits admission of petition where debt is prima facie due despite an arbitration clause.

Winding up petitions may be admitted despite an arbitration clause where the relief sought is non arbitrable and the claimed debt is prima facie due; the court applied the principle that a creditor can obtain winding up if the debt is due and payable and the respondent's defence is not a bona fide substantial dispute. Facts showing part payments and contemporaneous admissions of liability defeated the contention of defective goods and no effective return was established, so the petition was held maintainable and a provisional liquidator was appointed subject to a short suspension to enable interim payment.

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Issues: Whether a petition under Sections 433, 434 and 439 of the Companies Act seeking winding up and appointment of a provisional liquidator can be admitted where the respondent contests liability on the ground of defective goods and relies on an arbitration clause.

Analysis: The dispute concerns the existence and enforceability of a monetary liability alleged to be due on the respondent and whether the presence of an arbitration clause bars the court from entertaining a winding up petition. The legal framework recognises winding up and insolvency matters as non-arbitrable, and permits a creditor to seek winding up where the debt is due and payable and any defence is not a bona fide substantial dispute. The facts show substantial part payments were made by the respondent, contemporaneous communications accepted liability to pay the outstanding balance, and no effective return of goods or bona fide substantiated defence was established. The existence of an arbitration clause does not preclude the court from admitting a winding up petition where the petition concerns non-arbitrable relief and the claimed debt appears prima facie due.

Conclusion: The petition is maintainable and the respondent is liable to pay the outstanding sum. The Official Liquidator is appointed as Provisional Liquidator, subject to suspension of that appointment for four weeks to enable payment to be made; if payment is made the provisional appointment will be revoked.

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