Oppression and mismanagement claims are not arbitrable where statutory company-law remedies require adjudication by the company forum.

Disputes alleging oppression and mismanagement under sections 397, 398 and 402 of the Companies Act, 1956 cannot be referred to arbitration under section 8 of the Arbitration and Conciliation Act, 1996 where the reliefs sought belong to the special statutory jurisdiction of the company forum and include powers an arbitrator cannot exercise. The arbitration clause may govern inter se contractual disputes, but it does not curtail the statutory remedy before the Company Law Board. A composite order dismissing such a company petition is appealable under section 10F on questions of law, so the High Court may entertain the challenge.

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Issues: (i) whether disputes concerning oppression and mismanagement under sections 397, 398 and 402 of the Companies Act, 1956 could be referred to arbitration under section 8 of the Arbitration and Conciliation Act, 1996; (ii) whether the appeal under section 10F of the Companies Act, 1956 was maintainable against the Company Law Board's composite order.

Issue (i): Whether disputes concerning oppression and mismanagement under sections 397, 398 and 402 of the Companies Act, 1956 could be referred to arbitration under section 8 of the Arbitration and Conciliation Act, 1996.

Analysis: The statutory jurisdiction conferred by sections 397, 398 and 402 is a special remedial regime, including powers that an arbitrator cannot exercise, such as granting reliefs in oppression and mismanagement matters and making orders having the effect of winding up or modifying company arrangements. The subject matter before the Company Law Board was the statutory complaint of oppression and mismanagement, whereas the arbitration clause covered inter se contractual disputes arising from the agreements. The two were not the same subject matter, and the statutory remedy could not be curtailed by an arbitration agreement.

Conclusion: The reference to arbitration was impermissible, and the company petition could not be dismissed on that basis.

Issue (ii): Whether the appeal under section 10F of the Companies Act, 1956 was maintainable against the Company Law Board's composite order.

Analysis: The impugned order did not merely deal with an arbitration application; it also summarily dismissed the company petition under sections 397, 398 and 402. Orders of the Company Law Board under those provisions are appealable under section 10F on questions of law, and the appellant was prejudiced by the dismissal of the statutory petition without adjudication on merits. The challenge therefore lay properly before the High Court.

Conclusion: The appeal was maintainable.

Final Conclusion: The impugned order was set aside and the company petition was restored for decision on merits before the Company Law Board.

Ratio Decidendi: A statutory petition alleging oppression and mismanagement under the Companies Act cannot be referred to arbitration where the reliefs sought fall within the special powers of the company forum and not within an arbitrator's jurisdiction, and a composite order dismissing such petition is appealable on questions of law under section 10F.

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