The Anupam Mittal Case: Missed Opportunity To Address Arbitrability Of Shareholder Disputes In India By The Singapore Court Of Appeal

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The recent judgment of the Singapore Court of Appeal in the Anupam Mittal v Westbridge Ventures II Investment Holdings case has been praised for its pro-arbitration approach. However, it proceeds on the assumption that shareholder disputes in India may not be arbitrable as they fall under oppression and mismanagement (O&M) actions under sections 241 and 242 of the Indian Companies Act, 2013.

The SCA’s position on the Anupam Mittal case was that the O&M claims raised in the National Company Law Tribunal in Mumbai were not arbitrable under Indian law. However, they proceeded to uphold the anti-suit injunction against Mr Mittal by applying Singaporean law, where oppression claims are arbitrable. The SCA arrived at this decision by applying the Sulamerica test, which considers the governing law of the contract to determine the law governing the arbitration agreement. In this case, the SCA held that the governing law of the SHA could not be Indian law as it would negate the arbitration agreement under Indian law, leaving Singaporean law as the only option.

However, a long line of Indian judgments clarifies that shareholder complaints arising out of a breach of a contract containing an arbitration clause should be referred to arbitration. For instance, in Sidharth Gupta v Getit Infoservices Private Limited, the Company Law Board considered a case where a petition was filed under section 397-398 of the Companies Act, 1956, claiming O&M. After assessing the grievances, the Court concluded that the complaints arose from a breach of a contract that contained an arbitration agreement. The court referred the parties to arbitration and clarified that if allegations were against violations of contractual provisions, the arbitration clause would trigger into action.

Moreover, in Chatterjee Petrochem v Haldia Petrochemicals Ltd, the Supreme Court of India differentiated between O&M complaints arising from a contractual breach and those relating to contraventions of a shareholder’s statutory rights. The court opined that if the dispute pertained to the failure of a party to abide by its commitments, an O&M complaint would not be the appropriate remedy.

In Booze Allen Hamilton v SBI Home Finance followed by Vidya Drolia and Ors v Durga Trading Corporation, the Supreme Court clarified that contractual, in personam disputes are capable of being resolved by arbitration and are not non-arbitrable matters. In fact, the court in Vidya Drolia even opined that when in doubt, the matter should be referred to arbitration.

Indian courts have also addressed the issue of dressing up petitions to give an illusion of an O&M complaint. In Rakesh Malhotra v Rajinder Malhotra, the Bombay High Court clarified that a petition in the guise of an O&M claim, seeking to dishonestly oust an arbitration clause, cannot be permitted to succeed. Parties must be referred to arbitration if there is a valid arbitration agreement.

In conclusion, the Anupam Mittal case may have missed an opportunity to consider the Indian legal position on the arbitrability of shareholder disputes by the Singapore Court of Appeal.