Bombay High Courts Rules On Arbitrability Of Oppression And Mis-Management Issues

• Bombay High Court holds that oppression and mis-management claims fall outside the purview of an arbitration proceeding.
• Petitions filed before Company Law Board if malafide, vexatious or oppressive and is merely a dressed up to avoid arbitration, then it can be referred to arbitration.
• Company Law Board is bound by the orders of a foreign court if ruling on the same issue and not entitled to take its own view, subject to complying with principles under Section 13 of Civil Procedure Code.

The Bombay High Court recently in the case of Rakesh Malhotra v. Rajinder Kumar Malhotra¹ held that maintainability of oppression and mis-management claims by minority shareholders as referred under Section 241 read with Section 242 of the Companies Act, 2013 or Sections 397 and 398 read with Section 402 of the Companies Act, 1956 ("Companies Act"), would not be affected by the existence of an arbitration clause. Allegations of oppression and mis-management fall outside the