Arbitrability of Oppression and Mismanagement Claims
(A) Majority Shareholders agree in order to pass a resolution without considering the views of the minority shareholders then it is called Oppression of the minority shareholders. The majority rule can also be construed as a right bestowed upon the majority shareholders to manage the affairs of the company and run it.
Minority Shareholders are the ones who own only such a number of shares which do not give them control over the company.
(B) Term Oppression – The acts of oppression include not calling a general meeting and keeping the shareholders in dark, not maintaining the statutory records, depriving a member of his rights, refusal to register transmission under the will, issuing shares to benefit a certain class of shareholders, etc.
Term Mismanagement – The process or practice of managing ineptly, incompetently, or dishonestly. The act includes management of bank accounts by unauthorized personnel, continuation after the expiry of the term, violation of memorandum, statutory provisions, and articles, etc.
(C) Safeguarding Minority Rights – Irrespective of the existence of oppression and mismanagement affecting the rights of the minority shareholders, Companies Act 2013 has taken various important steps so as to safeguard the interest of the minority rights of the shareholders in the company.