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of <h1>Tribunal overturns NCLT order, upholds shareholders' rights.</h1> <h3>Aapico Hitecy Public Company Limited, Aapico Investment Pte. Ltd., Sakthi Global Auto Holdings Limited Versus ABT Limited, Sakthi Auto Component Ltd., Sakthi Sugars Limited, Orlandofin BV, Sakthi Services S.A., Sakthi Portugal S.A., Sakthi Portugal SP 21, Yeap Swee Chuan</h3> Aapico Hitecy Public Company Limited, Aapico Investment Pte. Ltd., Sakthi Global Auto Holdings Limited Versus ABT Limited, Sakthi Auto Component Ltd., ... Issues Involved:1. Validity of the resolutions passed at the EGM held on 25.01.2022.2. Right of majority shareholders to convene and hold an EGM.3. Legality of the NCLT's interim order restraining the implementation of EGM resolutions.4. Applicability of the Singapore Arbitration Award and its enforcement in India.5. Shareholder rights under the Companies Act, 2013, and the Shareholders Agreement (SHA) dated 29.09.2018.Detailed Analysis:1. Validity of the Resolutions Passed at the EGM Held on 25.01.2022:The Appellants argued that the resolutions passed at the EGM were valid as the meeting was convened by the majority shareholder, SGAH, holding 77.04% shares in SACL. The resolutions aimed to appoint additional nominee directors and remove current nominee directors from the 1st Respondent and its Group Companies. The NCLT's order dated 29.03.2022 restrained the Appellants from acting upon these resolutions, which the Appellants contended was an abuse of legal process.2. Right of Majority Shareholders to Convene and Hold an EGM:The Appellants contended that under Section 100 of the Companies Act, 2013, they had a statutory right to call an EGM. The requisition for the EGM was issued on 15.11.2021, and when the Board of SACL failed to act within the stipulated time, SGAH convened the EGM on 25.01.2022. The Tribunal affirmed that the requisitionists followed due procedure and had the right to convene the EGM.3. Legality of the NCLT's Interim Order Restraining the Implementation of EGM Resolutions:The Appellants argued that the NCLT's interim order was contrary to the law settled by the Supreme Court in LIC vs. Escorts Limited, which held that validly passed resolutions at an EGM cannot be stayed. The Tribunal found that the NCLT's order was an egregious departure from the law and lacked proper analysis. The Tribunal concluded that the NCLT should not have granted the injunction without recording how the resolutions were prejudicial to public interest or the company at large.4. Applicability of the Singapore Arbitration Award and Its Enforcement in India:The Respondents argued that the Singapore Arbitration Award, which recognized the Appellants' rights of management and representation on the SACL Board, was not enforceable in India without the approval of the Madras High Court. The Tribunal noted that the Appellants had invoked arbitration under the SHA, and the award recognized their right to appoint directors proportionate to their shareholding. Despite ongoing proceedings in the UK Court and the Madras High Court, the Tribunal found that the Appellants' right to call the EGM was valid.5. Shareholder Rights Under the Companies Act, 2013, and the SHA Dated 29.09.2018:The Tribunal emphasized that the Articles of Association of SACL, read with the SHA, provided the Appellants the right to appoint and remove directors. The Tribunal held that the shareholders' right to call an EGM and pass resolutions was protected under the Companies Act, 2013, and could not be restrained by the NCLT without a prima-facie finding of prejudice to public interest or the company.Conclusion:The Tribunal set aside the NCLT's interim order dated 29.03.2022, allowing the resolutions passed at the EGM on 25.01.2022 to be implemented. The Tribunal directed the NCLT to dispose of CP No. 25/2022 within one month, allowing the parties to complete and exchange their pleadings before the hearing. The Tribunal reiterated that validly passed resolutions at an EGM cannot be stayed, upholding the shareholders' statutory rights under the Companies Act, 2013, and the SHA.
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