Minority Shareholders Raise Concerns Over Supreme Court Referral of Jindal Poly Films Class Action to Arbitration

 Concerned minority shareholders of Jindal Poly Films Limited have expressed serious concerns following the Supreme Court’s order dated 8 June 2026 referring the ongoing dispute to arbitration based on the joint consent of Jindal Poly Films Limited and Monet Securities Private Limited.

The Supreme Court’s order resulted in the setting aside of the NCLT and NCLAT orders and disposal of the proceedings without examination of the substantive allegations, SEBI findings, or the broader shareholder concerns that formed the basis of the class action proceedings under Section 245 of the Companies Act, 2013.

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The development has triggered significant concerns among minority shareholders, particularly as approximately 40,000 public shareholders, whose interests were at the heart of the class action proceedings, were neither consulted nor informed before the matter was referred to private arbitration.

The primary concern relates to the apparent conversion of a statutory class action remedy into a private arbitration proceeding through the consent of a single substituted shareholder and the company itself.

Commenting on the development, concerned minority shareholders stated:

“Approximately 40,000 public shareholders, whose interests were at the heart of the class action proceedings, were neither consulted nor informed before the matter was referred to private arbitration.”

“A statutory class action remedy intended to protect an entire shareholder class appears to have been effectively settled through the consent of a single substituted shareholder, raising serious questions about representation and due process.”

“The matter was disposed of without examination of the substantive allegations, SEBI findings, or the concerns raised on behalf of minority shareholders, effectively moving the dispute away from a public forum to a private proceeding.”

“The fundamental concern that demands an answer is: when the dispute is with all public shareholders as a class and even includes SEBI as an intervenor, how can one shareholder particularly one that was recently substituted into proceedings initiated by others unilaterally settle the dispute and extinguish the rights of the entire class?”

The shareholders have also questioned how a proceeding initiated as a collective remedy on behalf of thousands of investors could be diverted to a confidential arbitration process in which most affected shareholders would have no voice, participation, or remedy.

According to the concerned shareholders, the development raises broader questions regarding minority shareholder protection, corporate governance standards, and the effectiveness of statutory class action remedies available under Indian law.

“The development raises larger concerns about whether class action proceedings under Section 245 of the Companies Act can be rendered ineffective through private settlements or arbitration arrangements, potentially setting a significant precedent for minority shareholder rights in India.”

The concerned minority shareholders further stated that the rights of approximately 40,000 aggrieved public shareholders require immediate protection and that they are currently evaluating the implications of the development and considering appropriate next steps and remedies available under applicable law.

The shareholders believe that the issues raised by the present development extend beyond a single corporate dispute and have important implications for shareholder activism, investor protection, and the future of class action litigation in India.