Arbitrability Of Derivative Action Claims

Garima Bothra, GITAM School of Law, GITAM University

ABSTRACT

There is no provision under Indian law that covers derivative actions by shareholders in India. While courts have generally adopted a stance against the arbitrability of oppression and mismanagement matters, their stance on derivative action suits is unclear. In derivative actions, remedies are sought at the behest of the company. The justification to rationalize the non-arbitrability of oppression and mismanagement matters cannot always apply to derivative action suits. This article aims to analyse the reasons why derivate claims are required to be arbitrated. Along with giving an Indian perspective on the issue, the author will also discuss the stance in different countries across the globe.

Keywords: Companies Act, Shareholders, Arbitration Agreement, Rights