Section 378ZO Disputes – Companies Act 2013

Section 378ZO of Companies Act 2013 amended by Companies (Amendment) Act, 2020. Discussion on provisions and rules related to Disputes.

Amended and updated notes on section 378ZO of the Companies Act 2013 as amended by the Companies (Amendment) Act, 2020 and Company Rules made there under. Detail discussion on provisions and rules related to Disputes.

Chapter XXIA PART-X (Section 378ZO) of the Companies Act 2013 (CA 2013) deals with the provisions related to resolutions of disputes. Section 378ZO of CA 2013 provides for Disputes.

Recently, we have discussed in detail section 378ZN (Amalgamation, merger or division, etc., to form new Producer Companies) of CA 2013. Today, we learn the provisions of section 378ZO of the Companies Act 2013.

In exercise of the powers conferred by sub-section (2) of section 1 of the Companies (Amendment) Act, 2020 (29 of 2020), the Central Government appoints the 11th February, 2021 as the date on which the provisions of section 52 of the Companies (Amendment) Act, 2020 shall come into force.

Accordingly, the provisions of section 378ZO are effective from 11th February, 2021. You may refer Notification No. S.O. 644(E) dated 11-02-2021. In this article, you will learn detail of the provisions of section 378ZO the Companies Act 2013.

Name of ActThe Companies Act 2013
Enacted byParliament of India
Administered byMinistry of Corporate Affairs (MCA)
Number of Chapters29
Number of Sections484 (470-43+57)
Number of Schedules7
You are reading:
Chapter No.XXIA (PART-X)
Chapter NameResolutions of Disputes
Section No.378ZO
Section NameDisputes
Monthly Updated EditionCompany Law PDF

Section 378ZO: Disputes

Section 378ZO(1) of Companies Act

Where any dispute relating to the formation, management or business of a Producer Company arises—

  • (a) amongst Members, former Members or persons claiming to be Members or nominees of deceased Members; or
  • (b) between a Member, former Member or a person claiming to be a Member, or nominee of deceased Member and the Producer Company, its Board of Directors, office-bearers, or liquidator, past or present; or
  • (c) between the Producer Company or its Board, and any director, office-bearer or any former director, or the nominee, heir or legal representative of any deceased director of the Producer Company,

such dispute shall be settled by conciliation or by arbitration as provided under the Arbitration and Conciliation Act, 1996 as if the parties to the dispute have consented in writing for determination of such disputes by conciliation or by arbitration and the provisions of the said Act shall apply accordingly.

Explanation: For the purposes of this section, a dispute shall include—

  • (a) a claim for any debt or other amount due;
  • (b) a claim by surety against the principal debtor, where the Producer Company has recovered from the surety amount in respect of any debtor or principal debtor whether such debt or amount due be admitted or not;
  • (c) a claim by Producer Company against a Member for failure to supply produce as required of him;
  • (d) a claim by a Member against the Producer Company for not taking goods supplied by him.

Section 378ZO(2) of Companies Act

If any question arises whether the dispute relates to formation, management or business of the Producer Company, the question shall be referred to the arbitrator, whose decision thereon shall be final

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