2026 (1) TMI 22 - AT - Companies Law

Shareholder dispute over share transfer/oppression petition (ss.59, 241-242) sent to court-appointed mediation after mediator deadlock.

Dispute arose in company appeals challenging rejection of a petition under Companies Act, 2013 ss. 59, 241-242 read with s. 244, where prior liberty to ... Rejection of petition which was preferred by invoking the provisions contained u/s 59, Section 241, to be read with Section 242, Section 244 of the Companies Act, 2013 - reference of appeal to mediation - HELD THAT:- It was left open for the parties to select a Mediator and to initiate the mediation process. It was also left open to the parties to resort to legal remedies available under law, if the need so arises, as against the decision of the Mediator. When inquired about the progress of mediation as ordered above, the learned counsels for the parties have stated that, though the earlier Company Appeal (AT) (CH) No.26/2025 was disposed of, leaving it open for the parties to appoint the Mediator, the same is yet to be done and the mediator is yet to be appointed owing to a disagreement between the parties with regards to the selection of Mediator, who would be taking up the matter to be decided amongst the parties. Even today the same stalemate prevails and hence the parties agreed that, if this Appellate Tribunal appoints a retired Hon’ble Judge of a High Court as a Mediator, it would be acceptable by them, and that they would be effectively and willingly participating in the proceedings before the Mediator, as ordered by this Appellate Tribunal. Based upon the willingness extended by his Lordship, his Lordship is requested to act as a Mediator between the parties to these 3 company appeals, so as to resolve the dispute between them by making an effort for mediation/settlement - the Hon’ble Mediator would be paid with a remuneration of Rs. 1,00,000/- per sitting, which would be borne equally by both the parties to the company appeal (i.e., 50% each) - The Hon’ble Mediator, is requested to complete the mediation proceedings as far as possible, within maximum of 10 sittings. Appeal disposed off. Issues: Whether the company appeals should be referred to mediation under the statutory mediation scheme and disposed of subject to mediation, and whether a retired High Court judge should be appointed as Mediator with specified terms for conducting mediation.Analysis: The appeals raise no adjudication on merits at this stage but involve a consensual proposal by parties to resolve disputes through mediation. The appellants sought condonation and there were issues of service on certain respondents; those procedural aspects were addressed and parties expressly agreed to mediation. The Tribunal identified the statutory framework permitting mediation and conciliation in company proceedings and set terms regarding mediator appointment, remuneration per sitting to be shared equally, venue convenience, maximum sittings, and procedural rules to be followed.Conclusion: The appeals are disposed of by referring the matters to mediation under the statutory mediation framework; a retired High Court judge is appointed as Mediator; mediation shall proceed on the specified terms including equal sharing of mediator remuneration and compliance with Section 424 of the Companies Act, 2013, Section 89 CPC, and the Companies (Mediation and Conciliation) Rules, 2016. Parties retain their rights to legal remedies if mediation fails or as against any decision of the Mediator.