NCLT refers 13-year-old Sanghi dispute to IAMC in Hyderabad
Hyderabad: The National Company Law Tribunal (NCLT), Hyderabad Bench, has referred the 13-year-old corporate dispute among the brothers of the Hyderabad-based Sanghi group to the newly established International Arbitration and Mediation Centre (IAMC). This is the first and large corporate dispute to be referred to the new dispute resolution centre. The long-drawn dispute that was […]
Hyderabad: The National Company Law Tribunal (NCLT), Hyderabad Bench, has referred the 13-year-old corporate dispute among the brothers of the Hyderabad-based Sanghi group to the newly established International Arbitration and Mediation Centre (IAMC). This is the first and large corporate dispute to be referred to the new dispute resolution centre.
The long-drawn dispute that was under litigation since 2008, involves multiple corporate entities controlled by different Sanghi family members, which have levelled serious allegations against each other involving oppression and mismanagement under Sections 397/398 of the Companies Act.
The corporate entities entangled in the dispute included publicly-traded Sanghi Industries and other closely held entities such as Sanghi Cements, Sanghi Synthetics, Balaji Zippers, SKK Zippers, Sanghi Poly Zips, among others.
Six cases referred to IAMC
On Thursday, the NCLT’s Hyderabad bench presided by Justice Ramalingam Sudhakar (president) and Veera Brahma Rao Arekapudi (member- technical) referred six cases relating to the family dispute of Sanghi brothers and multiple corporate entities dealing in cement, synthetics, polyzips, zippers, among others to the newly floated IAMC at Hyderabad.
The NCLT deputy registrar K Hanumantha Rao said the disputes are being referred for resolution to the IAMC after taking the consent of the disputing parties and the assistance of their respective counsels.
The corporate disputes among the Sanghi family members and the entities controlled by them revolved around the appointments and removal of some of the directors, resolutions passed at various board meetings and general meetings, and alleged amendment to the Articles of Association, among others.
While some of the brothers of the Sanghi family challenged the decisions, few others supported those corporate decisions. There were allegations of manipulations and fraudulent acts in the shareholding that allegedly breached the fiduciary duties by those at the helm of affairs.
Amicable dispute resolution
In the course of hearing of the cases by the NCLT bench at Hyderabad over the years, two of the brothers have reconciled with Ravi Sanghi by way of a settlement. Currently, the dispute is between Girish Sanghi and other brothers, said the NCLT bench in its order, while referring the dispute to the IAMC.
The tribunal referred the Sanghi family dispute to the IAMC for resolution while invoking Section 89 of the Civil Procedure Code, 1908, which provides by way of out of court settlement, and advised the counsels of respective parties to present it before the IAMC to explore an amicable dispute resolution.
The IAMC at Hyderabad was inaugurated by the Chief Justice of India Justice NV Ramana last Saturday.
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