In Brief
Two UAE-resident minority shareholders of a Dubai company sued in Madras High Court claiming their company held beneficial interest in shares of an Indian insurance company registered in others' names. They sought a declaration as a derivative action. The Supreme Court dismissed the appeal against the High Court's order revoking leave to sue. The Court held that since the real dispute was between the shareholders of the foreign company over the foreign company's affairs, and the beneficial owner was itself a foreign entity outside Indian jurisdiction, the suit lacked territorial jurisdiction. The proper forum was Dubai courts under principles of forum conveniens. Statutory provisions (Companies Act ss. 89, 187C) also barred relief without formal declaration by the beneficial owner itself."
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