High Court Orders Mediation In Unity Foods Shareholder Dispute

In a significant development in the ongoing litigation involving the sponsors of Unity Foods Limited (UFL), the Honorable High Court of Sindh has directed the parties to explore an amicable resolution through mediation. This direction comes amidst a series of high-stakes proceedings initiated by the founding sponsor to protect the Company’s integrity and shareholder value.

Mohsin Tayebaly & Co. is representing the founder, director, and sponsor shareholder of the Company in a petition under Section 286 of the Companies Act, 2017. The petition addresses allegations of oppression, manufactured liquidity crises, and the predatory conduct of the majority shareholder.

Early in the proceedings, MTC successfully obtained an ad-interim status quo order in respect of the Company’s immovable assets, ensuring that core industrial facilities remain protected from any unilateral or distressed alienation during the pendency of the dispute.

Recognizing the complexities of the shareholder impasse, we proposed mediation as a potential path toward a fair and transparent resolution that would protect the Company. The proposal faced notable resistance from the opposing side.

Despite this resistance, the Court has underscored the importance of Alternative Dispute Resolution (ADR) in corporate matters and ordered for mediation to take place. Crucially, the status quo orders previously secured by MTC remain fully operational, ensuring that the petitioner’s rights and the Company’s assets are safeguarded while the mediation process is explored.

This case highlights the multi-faceted of the judiciary in Pakistan: providing robust protection against corporate oppression while encouraging structured dialogue to resolve corporate deadlocks.

The firm’s team in this matter is led by Arshad M. Tayebaly, Senior Partner, and includes Sameer Tayebaly, Senior Associate, Ammar Suria, Associate, and Nadia Mehek, Associate.