company remains the same only the directors / shareholders have changed

2) it is better you agree for arbitration and let court appoint sole arbitrator

3) you cannot take the plea that applicant is not the same that they entered into contract with

it is necessary to peruse agreement cited by you to advice further

2) it is better you raise your defence before the arbitrator

3) in case arbitration clause is provided in the contract court would refer dispute to arbitration

Piercing the corporate veil or lifting the corporate veil is a legal decision to treat the rights or duties of a corporation as the rights or liabilities of its shareholders.

Lifting the veil of incorporation is permitted when the person or persons are using the incorporation of a company to evade or deliberately frustrate a legal obligation or liability.

Corporate personality is the fact stated by the law that a company is recognized as a legal entity distinct from its members. A company with such personality is an independent legal existence separate from its shareholders, directors, officers and creators. This is famously known as the veil of incorporation.

Corporate veil means a legal concept that separates the personality of a corporation from the personalities of its shareholders, and protects them from being personally liable for the company's debts and other obligations.

From the above it can be clearly understood that the company A is filing this application u/s. 11(6) to HC for appointment of an arbitrator to which it is very much entitled in view of the clause agreed between both the companies.

You have the right as a company for initiating appropriate legal action against company A for its breach of contract condition in respect of the changes that had taken place which is against the terms and conditions of agreement.

Thanks for the advice. But, the agreement was personal in nature. The company was just a banner (Veil), that was lifted on day one. If the set of persons behind the veil are different then definitely they are strangers.

It was an agreement between two companies and not between individuals, hence it has nothing to do with the removal of corporate veil.

company B has to continue with the contract

2) if there is breach of contract by A company B can sue A for damages

3) court can refer disputes to arbitration if there is arbitration clause int he contract

is there any penal clause in the contract ? what if shareholding of A is changed contrary to agreement

if there is change of management contrary to provision of contract sue the company and its directors and claim damages before the arbitrator

arbitrator will decide the claim for damages against the company

2) arbitrator will not decide against ex directors who are not party before the HC

3) you will have to file separate suit for damages against the ex directors

1.You mean..... Company B has to continue with the contract even if there are unsocial, unwanted persons now controlling Company A

The company has choice to terminate the contract as per the conditions of the contract but not on grounds as stated by it earlier.

2. Can the Company B rescind the contract and claim for the compensation before registrar ?

The terms to terminate or rescind the contract have to be adhered to or complied with for seeking the same on the grounds it relies upon.

3. After enactment of Section 11 (6A) of the Arbitration Act, 1996, the scope of the court has been confined to existence of Arbitration Clause. Maximum to maximum the court can see whether the document is properly stamped or not. But in our case the 11(6A) is not applicable and the scope of the court is wide open.

It can be argued before the court on the basis of your reliance on the said provisions of law and its interpretation.

This agreement is personal in nature between the representatives of Company A and B and has been entered into having regard to their respective management. Both the parties shall not allow any change in the control as to office of directorship or their shareholding pattern without prior approval of the other party. The directors of both the parties have signed this agreement and from day one they shall be individually and severally liable to fulfill their commitments under these presents even during or after the liquidation of respective company."

If there are chances to prove that the above said condition have been breached then there are chances to terminate the contract between both the parties and if necessary the disputes can be solved through an arbitrator operating the arbitration clause.

NO PENAL PROVISIONS. But the wording seems that this is essence of the contract

It depends on the interpretation of the particular clause and seek relief on the basis of the interpretation

But some of original directors/shareholders are not now in the company. Nor are they party to section 11.

How can a court appoint arbitrator between the persons who are not the party to Section 11?

Arbitration is not for the parties but for the disputes between the companies which entered into the contract.

Moreover, there are some new directors/shareholders. They are also not parties to Section 11.

How can an arbitrator decide against a person who is not a party before HC U/S. 11(6) ?

who will be liable for damages ? Old set of persons or New set of persons.

Arbitrator will listen to the disputes and not the parties who are at loggerheads.

The companies as entities will be taken into consideration in this regard.