Supreme Court: Arbitrability of Shareholder Class Actions Under Companies Act

On June 8, 2026, the Supreme Court closed the doors on India's most significant shareholder class action in 3 paragraphs of consent.It referred the dispute to arbitration, quashed 2 rulings by the company law tribunal and overlooked a crucial underlying question: can a class action representing 40,000 (approx) shareholders be an arbitrable subject matter, brought on behalf of all by anyone at a roll of dice?The Jindal Poly Films Ltd v. Monet Securities Pvt Ltd was not an in personam dispute but an in rem dispute. It was filed under Section 245 of the Companies Act, 2013 as a representative suit on behalf of 40,000 (approx) shareholders; sleeping since its inception into the statute until this filing brought it to life. The same life has now ended by consent, not by reasoning.What the Court didThe suit was brought by shareholders holding under 5% of Jindal Poly Films. They averred acquisition of preference shares in a subsidiary by promoter-linked entities at below fair market value for about ₹105 crore as against a higher fair value. Loans were written off, stakes in another subsidiary were also sold away at below fair market value and loss estimated by an independent valuer put above ₹2,500 crore. This was engineered to circumvent the threshold requirements which mandate minority shareholder approval.The tribunal's order totalled 61 pages and remains the most developed reading Section 245 has received. It held that Section 245 protects the company (the entity) in addit