In Brief
Sanjiv Prakash and his family members (including his sister Seema Kukreja and parents Daya and Prem Prakash) entered a Memorandum of Understanding in 1996 governing their shareholding in ANI Media Private Limited. When Reuters invested 49% equity, a Shareholders' Agreement was executed the same day. Disputes arose over share transfers. Sanjiv Prakash invoked the MoU's arbitration clause, but the Delhi High Court dismissed his application, holding the MoU was superseded by the Shareholders' Agreement. The Supreme Court allowed the appeal, holding that the question of novation is factually and legally complex and must be decided by an arbitrator. Since the agreements covered different subject matters—the MoU governed inter-family rights, while the Shareholders' Agreement governed family-Reuters relations—novation was not manifest. The Court applied limited prima facie review under Section 11(6A) and referred the dispute to arbitration.
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