Bombay HC Bars Startup Founder From Representing Himself As CEO Pending Arbitration, While Leaving His Termination’s Legality Open

The Petitioner company appointed the Respondent as its CEO under an Employment Agreement dated 1 July 2025, while he continued as Vice-Chancellor of Shoolini University.

After receiving a UGC communication stating that a Vice-Chancellor required to be a whole-time salaried officer could not be employed by a private company, the Petitioner issued a letter on 29 September 2026 asserting that the Agreement was void or rescinded, and alternatively terminating it for alleged contractual breaches.

The Respondent disputed the termination and maintained that he continued as CEO. The Board subsequently ratified the letter at a meeting on 19 October 2026.

The Petitioner sought interim relief under Section 9 of the Arbitration and Conciliation Act, 1996, including restraints on the Respondent holding himself out as CEO, interfering with management, pursuing parallel proceedings, and using company information.

Section 9 of the Arbitration and Conciliation Act permits interim measures in support of arbitration; under PASL Wind Solutions Pvt. Ltd. v. GE Power Conversion India Pvt. Ltd., an Indian court may entertain a Section 9 application where the arbitration is seated outside India.

Under Vidya Drolia v. Durga Trading Corporation, disputes concerning rights in personam are generally arbitrable, subject to the recognised limits on arbitration.

A contract of personal service is ordinarily not specifically enforceable, subject to the exceptions stated in Executive Committee of Vaish Degree College v. Lakshmi Narain; Sections 14 and 41(e) of the Specific Relief Act, 1963 restrict specific performance and injunctions concerning such contracts.

Rule 8(2) of the Companies (Meetings of Board and its Powers) Rules, 2014 requires appointment or removal of key managerial personnel to be exercised by Board resolution.

The doctrine of ratification, as explained in Maharashtra State Mining Corpn. v. Sunil and Sri Parmeshwari Prasad Gupta v. Union of India, permits a competent authority to validate retrospectively an act done on its behalf without prior authority, where the authority had power to perform that act.

Anti-suit injunctions are governed by the principles in Modi Entertainment Network v. W.S.G. Cricket Pte. Ltd. and are subject to Sections 41(a) and 41(b) of the Specific Relief Act.

The Court held that the Singapore seat did not, by itself, bar Section 9 relief and found that part of the cause of action arose in Mumbai; the contractual dispute was between the parties and concerned rights in personam, although the arbitral tribunal could not determine the independent rights of the UGC or the University.

The Court treated the employment relationship as a private contract of personal service, so the Respondent could not obtain reinstatement merely by disputing termination.

It nevertheless found that the two directors had issued the termination letter on behalf of the Company, that the Board had authority to remove the CEO, and that its formal resolution of 19 October 2026 validly ratified the earlier act with retrospective effect.

That ratification established corporate authority but did not prove the alleged breaches or establish that the Agreement was void or rescinded.

Because the Respondent continued to assert that he held office as CEO, a limited restraint against representing himself as authorised to bind the Company was warranted to prevent confusion.

The Court declined broader management, anti-suit, and non-disparagement reliefs, finding them insufficiently justified or overbroad; it continued protection for company property and confidential information.

The Respondent was restrained, pending commencement and conclusion of arbitration, from representing himself as the Company’s present CEO, authorised signatory, or representative, or from acting to bind the Company in that capacity.

He remained free to dispute the termination and pursue lawful remedies, and his rights as director and shareholder were preserved.

The broader management-interference, anti-suit, and non-disparagement prayers were rejected.

The Respondent was directed not to use or disclose the Company’s confidential or proprietary information, to return company property within seven days, and to file an affidavit detailing company property and credentials in his possession or control.

The Petitioner was directed to commence arbitration within 90 days if it had not already commenced; the merits of termination and related disputes were left open.