Non-arbitrability of oppression and mismanagement claims prevents splitting company disputes between arbitration and tribunal forums.

Reliefs in a company petition alleging oppression and mismanagement were held to be non-arbitrable because they extended beyond contractual claims to statutory remedies under Sections 241 and 242 of the Companies Act, 2013, including investigation, related-party transactions, removal of directors, and other tribunal-specific reliefs. An arbitration clause could not displace the tribunal's jurisdiction where the dispute was inherently within the company law forum's statutory domain. The controversy also could not be split between arbitration and the tribunal, as the allegations and remedies were interlinked and bifurcation risked inconsistent findings and inefficient adjudication. The refusal to refer the matter to arbitration and the interim directions were upheld.

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Issues: (i) Whether the grievances and reliefs sought in the company petition alleging oppression and mismanagement were capable of reference to arbitration under the arbitration clause; (ii) whether the disputes and reliefs could be split between arbitration and the company law tribunal.

Issue (i): Whether the grievances and reliefs sought in the company petition alleging oppression and mismanagement were capable of reference to arbitration under the arbitration clause.

Analysis: The reliefs sought in the company petition were not confined to contractual or monetary claims. They included allegations of misutilization of funds, diversion of funds, non-service of notices, related party transactions, forensic audit, investigation into the company's affairs, declaration of oppression and mismanagement, and removal of directors and shareholders. Reliefs of this nature fall within the statutory domain of the company law tribunal under Sections 241 and 242 of the Companies Act, 2013. An arbitrator, being a creature of contract, cannot grant the full range of reliefs available under those provisions, including reliefs tied to winding up type considerations and other tribunal-specific remedies. The existence of an arbitration clause does not divest the tribunal of jurisdiction where the dispute is non-arbitrable by nature.

Conclusion: The disputes were held to be non-arbitrable and not referable to arbitration.

Issue (ii): Whether the disputes and reliefs could be split between arbitration and the company law tribunal.

Analysis: The Court held that the subject matter could not be bifurcated between two fora. The petition raised overlapping allegations and sought interconnected reliefs, and splitting some issues for arbitration while leaving others to the tribunal would defeat the object of speedy and effective disposal and create a real risk of conflicting findings. The tribunal's jurisdiction under the company law regime could not be whittled down by fragmenting the controversy under Section 8 of the Arbitration and Conciliation Act, 1996.

Conclusion: Bifurcation of the disputes was rejected.

Final Conclusion: The company law tribunal's refusal to refer the matter to arbitration and its interim directions were upheld, and both appeals failed.

Ratio Decidendi: Where the reliefs sought in a company petition under Sections 241 and 242 of the Companies Act, 2013 are inseparable from statutory remedies reserved to the tribunal, the dispute is non-arbitrable and cannot be split for partial reference to arbitration.

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