Exotel’s Share-Purchase Dispute With Former Shareholders Goes To Bengaluru Arbitration Despite Later Employment Agreement, Karnataka HC Holds

Exotel Techcom Private Limited (Petitioner No. 1) acquired all shares in Allin Call Research and Solutions Private Limited (Petitioner No. 2) from Respondents 1–3 under a Share Purchase Agreement dated 2 November 2021.

The agreement contained non-compete, non-solicitation and confidentiality provisions, as well as an arbitration clause providing for appointment of a sole arbitrator.

The petitioners alleged that Respondents 2 and 3 breached the Share Purchase Agreement by establishing Respondent 4, to the detriment of Petitioner 2.

After the petitioners invoked the Share Purchase Agreement’s arbitration clause by notice dated 27 March 2025, they applied under Section 11(6) of the Arbitration and Conciliation Act, 1996, for appointment of an arbitrator.

The respondents argued that the dispute fell under a later Employment Agreement, which superseded earlier agreements and designated Bombay as the seat, and that Respondent 4 was not a signatory to either agreement.

The Court considered Section 11(6) of the Arbitration and Conciliation Act, 1996, under which the petitioners sought appointment of an arbitrator.

Clause 20.2 of the Share Purchase Agreement provided for final and binding arbitration before a jointly appointed sole arbitrator.

The Court also considered the Employment Agreement’s asserted supersession provision and the parties’ competing positions on the applicable agreement and arbitral seat.

The Court found that the petitioners’ grievance concerned alleged breaches of the non-compete, non-solicitation and confidentiality obligations in the Share Purchase Agreement, notwithstanding similar provisions in the Employment Agreement.

It therefore held that the petitioners had appropriately invoked Clause 20.2 of the Share Purchase Agreement.

The Court rejected the contention that the Employment Agreement superseded that agreement, construing the supersession provision as applying only to the earlier Employment Agreement; it consequently accepted that the Share Purchase Agreement’s Bengaluru seat supported the Court’s jurisdiction to act under Section 11(6).

As to Respondent 4, the Court held only that it was prima facie not a necessary party to the appointment proceedings, leaving any application to implead it in the arbitration to the arbitrator.

All claims and contentions were left open.

The Court directed the parties to appear before the Centre’s Director on 19 November 2026 at 11:30 a.m.; the petitioners were not precluded from applying to the arbitrator to implead Respondent 4.