The case of Anupam Mittal Vs. People Interactive (India) Pvt. Ltd highlights the significance of the National Company Law Tribunal’s exclusive jurisdiction for claims for oppression and mismanagement and throws light on the Indian Courts’ approach to issues of arbitrability and anti-enforcement injunctions against orders of foreign courts.

Facts

The dispute arose when the plaintiff approached the National Company Law Tribunal (NCLT, Mumbai Bench), seeking statutory relief for allegations of oppression and mismanagement. Subsequently, the defendant obtained an anti-suit injunction from the High Court of Singapore restraining the plaintiff from pursuing the case before the NCLT on the grounds that the dispute was contractual in nature and hence, it should be resolved through arbitration in Singapore as per the terms of the shareholders’ agreement. In response to the order of the High Court of Singapore, the plaintiff filed for a permanent injunction, seeking to prevent the defendants from enforcing the anti-suit injunction.

Analysis

The court agreed with the plaintiff’s contention that a high threshold three-prong test of  (i) a strong prima facie case, (ii) grave and irreparable loss, and (iii) a balance of convenience in favour of plaintiff, must be examined before granting an anti-enforcement injunction.

The court did not delve into the intricacies of the dispute regarding whether a prima facie case of oppression and mismanagement had been made out by the plaintiff. The court was of the opinion that examining the validity of claims of oppression and mismanagement was within the exclusive jurisdiction of the NCLT and the court’s interference would encroach upon the jurisdiction of the NCLT.

The court rejected the defendants’ argument that the plaintiffs had consented to Singapore as the seat of arbitration, on the grounds that as per the shareholders’ agreement, the enforcement of the award is to be in accordance with Indian arbitration law and the same cannot be done when the dispute is non-arbitrable according to Indian law. The court was of the opinion that the plaintiff being left remediless if the injunction were enforced established a prima facie case.

The plaintiff also sought relief from the NCLT to restrain the respondents from initiating arbitration proceedings in Singapore. The tribunal affirmed that permitting the defendants to proceed with arbitration and potentially securing an award in their favour would inflict irreparable harm upon the plaintiff. However, the NCLT limited its decision to the grant of an interim injunction and held that the defendants may still have a remedy of invoking Section 45 of the Arbitration and Conciliation Act, 1996 during the pendency of the company petition before the NCLT.

Implications

This decision throws light on the approach that the courts may take in future when dealing with anti-suit injunctions granted by foreign courts. The court considered issues of public policy, arbitrability and access to justice under Indian Law while deciding upon the anti-enforcement injunction. In future, a court may consider issues of arbitrability and public policy under Indian Law to stay the anti-suit injunctions in any arbitration which may result in an award which will be enforced in India.

What was also noteworthy was the reaffirmation of the exclusive jurisdiction of the NCLT to adjudicate oppression and mismanagement claims. The court’s ruling highlights the importance of the NCLT as the designated forum for addressing such disputes under Indian law. This decision serves as a significant reminder that the NCLT plays a crucial role in corporate governance and ensuring the protection of shareholders’ rights. This judgment also focuses on the non-arbitrability of certain disputes, in this instance, oppression and mismanagement disputes, highlighting the significance of addressing statutory rights in the right forum.