Supreme Court of India Refers Jindal Poly Films Class Action Dispute to Arbitration
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TL;DR
- The Supreme Court of India has referred the Jindal Poly Films class action dispute to arbitration.
- The case centered on allegations of over ₹2,500 crore being siphoned via undervalued transactions.
- This was the first corporate class action to reach maintainability before the NCLT under Section 245.
- The original petitioner exited, and a substituted petitioner consented to arbitration.
Overview
On June 8, 2024, the Supreme Court of India referred the class action dispute between minority shareholders and Jindal Poly Films Ltd to arbitration, concluding a notable case under Section 245 of the Companies Act concerning alleged financial misconduct and undervalued transactions. The court accepted consent from all parties to resolve the matter through arbitral proceedings.
What Happened
The dispute was initiated by minority shareholder Ankit Jain and his family in March 2024, alleging that over ₹2,500 crore had been siphoned from Jindal Poly Films through undervalued asset sales and related-party transactions involving promoter-linked entities.
The shareholders also cited investments by Jindal Poly in group power companies and the subsequent transfer of these investments at undervalued prices after debt waivers.
The petition was admitted by the National Company Law Tribunal (NCLT) in February 2026, marking the first time a corporate class action suit reached this stage in India, and the order was later upheld by the National Company Law Appellate Tribunal (NCLAT).
After the lead petitioner sold his stake and withdrew, Monet Securities Pvt. Ltd was substituted as petitioner and consented to arbitration. The Supreme Court set aside the NCLT and NCLAT orders and appointed a sole arbitrator, Manindra Mohan Shrivastava, to adjudicate.
Context
Section 245 of the Companies Act, 2013 was introduced to strengthen minority shareholder protection in India, enabling collective action following scandals such as Satyam.
Although class action remedies are common in the US and other jurisdictions, they remain rare and largely untested in Indian corporate law. This case was closely watched as a potential precedent until its referral to arbitration closed the judicial proceedings.
Why It Matters
- The referral signals how class action disputes under India's Companies Act may be resolved through arbitration rather than extended court litigation.
- The outcome may influence future minority shareholder activism and class action practice under Indian company law.