ORDER:

1. This Arbitration Application is filed under section 11(6) of The Arbitration and Conciliation Act, 1996 (‘1996 Act’) seeking appointment of an Arbitrator. The applicant relies on Clause No.23 of the Memorandum of Association dated 19.01.1998 of Hitha Design Science Private Limited (respondent No.1).

2. I have heard the respective submissions of learned counsel appearing for the applicant and the respondents.

3. Counsel appearing for the respondents raises an objection to the maintainability of the Arbitration Application.

4. Clause 23 of the Memorandum of Association dated 19.01.1998 contains arbitration clause and the same is set out below:

‘23. To agree, or refer, or arbitration all disputes present or future between the company and any other company, firm or individual and to submit the same to arbitration or to an arbitrator in India or abroad and either in accordance with India or any other Foreign system of law.’

5. It is evident from the Memorandum of Association dated 19.01.1998 that the disputes in the present or in the future between the company ‘and any other company, firm or individual’ have to be referred to arbitration. The applicant describes himself as a shareholder of the respondent No.1-Company holding 2,207 shares equivalent to 49.94% of total shareholding of the respondent No.1- Company. Hence, the applicant is a shareholder of the respondent No.1-Company.

6. It is also evident that the applicant has raised disputes against the respondents alleging Oppression and Mismanagement under sections 241 and 242 of The Companies Act, 2013 (‘2013 Act) by filing C.P.No.60 of 2024 before the National Company Law Tribunal, Hyderabad Bench at Hyderabad (‘NCLT, Hyderabad’). The Court is informed that the CP is pending as on date.

7. Further, the prayer in the present Arbitration Application is for appointment of Arbitrator to adjudicate upon the disputes between the Parties ‘arising out of or in connection with the aforesaid issues, including all allegations of oppression, mismanagement and breach of contractual obligations…’

8. The aforementioned points read with the allegations made in the Arbitration Application would make it clear that the disputes are between the Shareholders of the respondent No.1-Company or at best with the Shareholders and the respondent No.1-Company. Such matters fall squarely under the exclusive jurisdiction of the NCLT which are fully covered under sections 241 and 242 of the 2013 Act in relation to oppression and mismanagement. Having already invoked a statutory remedy, the applicant appears to have filed this Arbitration Application as a secondary recourse. Moreover, the word ‘individual’ has to be seen in connection with the word ‘company’ which precedes it. When read together, ‘individual’ and the ‘firm’ form part of the group of words ‘… and any other company, firm or individual…’ i.e., a person who necessarily is outside the Company and not part of the Company.

9. The cause of action raised in the Arbitration Application is one which is overridden by the provisions of The Companies Act, 2013. Moreover, the wording of the arbitration clause in Memorandum of Association dated 19.01.1998 contains sufficient ambiguity as to whether the disputes referable to arbitration are limited to those between the respondent No.1-Company and another company or whether the individuals mentioned in the arbitration clause are to be read as parties in their personal capacity, thereby rendering the scope and applicability of the said arbitration clause uncertain and incapable of invocation.

10. This Court hence finds substance in the objections raised on behalf of the respondent No.1-Company regarding the maintainability of the Arbitration Application.

11. Arbitration Application No.93 of 2025 is found to be not maintainable and is accordingly dismissed along with all connected applications. There shall be no order as to costs.