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Disputes under Sections 241-242 Company Act, Non-Arbitrable

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Judgment  dated 29.4.2026 of the NCLT, Chandigarh Bench, Court-I, Chandigarh, in CA No.201 of 2025 in CP/59/CHD/HRY/2025 of USAR Commerce Technologies Private Limited Vs.  Utsav Soi and others

NCLT Chandigarh -Reliefs claimed in the petition affecting the company as a whole not merely contractual rights, are rights in rem.

Even if the agreements contain arbitration clauses, the reliefs and the disputes in the company petition affect the corporate structure and rights in rem and within the exclusive jurisdiction of NCLT.

Respondent no.1 filed the company petition under Sections 241-242 of the Companies Act before NCLT on the same day when the Notice Invoking Arbitration was given.

The applicant filed section 8 AA application for reference of disputes in the company petition as per the arbitration clauses in the Share Subscription Agreement, Shareholders Agreement and the Employment Agreement.

The respondent no.1 objected said application for non-arbitrability of company disputes.

The reliefs / claims in the Notice Invoking Arbitration & the Company Petition are reproduced 2(xi) of the judgment.

It was found that many of the reliefs claimed in the petition relate to the rights in rem and go to the constitution, governance and ownership structure of the company as a whole.

It was, therefore, HELD that the disputes of the nature raised in the company petition are excluded from the purview of arbitration and therefore, non-arbitrable.

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