Corporate restructuring disputes requiring statutory adjudication are non-arbitrable, permitting exceptional supervisory review of an arbitral jurisdictional order.

Supervisory jurisdiction under Article 227 may exceptionally be invoked against an arbitral order rejecting a jurisdictional objection where the tribunal is alleged to lack inherent jurisdiction, despite the limited intervention framework of the Arbitration and Conciliation Act. Claims seeking corporate restructuring, division of company assets and liabilities, share allotment or buy-out, management changes, and asset sales were characterised as intra-company actions in rem. Because the companies were not parties to the memorandum and the reliefs affected minority shareholders and third-party interests, they required adjudication under the exclusive statutory jurisdiction of the National Company Law Tribunal. Arbitral proceedings concerning those corporate claims were terminated, without affecting statutory remedies or otherwise arbitrable proceedings.

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Issues: (i) Whether supervisory jurisdiction under Article 227 may be invoked against an arbitral order rejecting a jurisdictional objection under Section 16(2) of the Arbitration and Conciliation Act, 1996; (ii) Whether claims for restructuring companies, division of their assets and shares, and consequential corporate reliefs are arbitrable under a memorandum of understanding between individual parties.

Issue (i): Whether supervisory jurisdiction under Article 227 may be invoked against an arbitral order rejecting a jurisdictional objection under Section 16(2) of the Arbitration and Conciliation Act, 1996.

Analysis: An order rejecting a plea under Section 16(2) is not appealable under Section 37(2)(a). Although Section 5 restricts judicial intervention and ordinarily requires parties to await the award and pursue the statutory remedy under Section 34, supervisory review remains available in exceptional cases where the arbitral tribunal patently lacks inherent jurisdiction or the dispute is governed by an exclusive statutory mechanism.

Conclusion: The petition under Article 227 was maintainable because the jurisdictional objection concerned a claimed total absence of arbitral jurisdiction.

Issue (ii): Whether claims for restructuring companies, division of their assets and shares, and consequential corporate reliefs are arbitrable under a memorandum of understanding between individual parties.

Analysis: The claims sought division of corporate assets and liabilities, allotment or buy-out of shares, alteration of management, and sale of company assets. The companies were not parties to the memorandum of understanding, while the reliefs affected their functioning, minority shareholder rights and third-party interests. Such reliefs fall within the extensive statutory powers of the National Company Law Tribunal under Sections 241 and 242 of the Companies Act, 2013. The dispute was therefore an intra-company action in rem requiring centralised statutory adjudication, rather than a personal dispute capable of private arbitral resolution.

Conclusion: The corporate restructuring claims were non-arbitrable and fell within the exclusive jurisdiction of the National Company Law Tribunal; the arbitral tribunal lacked jurisdiction over those claims.

Final Conclusion: The jurisdictional order was set aside to the extent it retained arbitral jurisdiction over the claims concerning the three companies, and those arbitral proceedings were terminated while statutory remedies and any otherwise arbitrable proceedings remained open.

Ratio Decidendi: Supervisory jurisdiction may exceptionally be exercised to prevent arbitration of disputes that are non-arbitrable because they concern corporate restructuring and rights requiring exclusive adjudication by a statutory forum.

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