Beneficiaries, even if minors at the time of the trust deed, are entitled to invoke the arbitration agreement and seek appointment of an arbitrator.

By this application filed under Section 11 of the Arbitration and Conciliation Act, 1996 (hereinafter 'the Act' for short), applicants seek appointment of arbitrator invoking Clause-20 of the Deed of Kaydee Family Trust executed on 6th April 1983 which is at Exhibit-A to the application. Clause 20 of the said Trust Deed reads as under:

“20) subject to contents of para 9 of this trust deed, every dispute or differences regarding the interpretation of any of the clauses or provisions or the contents of this Trust Deed or between the Trustees, or the Trustees and beneficiaries, or the beneficiary interse regarding the rights, titles or interest flowing or arising from this Trust Deed or consequential thereto shall be resolved in pursuance of the provisions of Indian Arbitration Act, 1940 or any other Statute in force in its place and the decision of arbitrator or arbitrators, as the case may be, shall be final and binding to the parties to such arbitration.

2. The applicants are beneficiaries of the first respondent trust which is a private family trust formed by Deed of Trust dated 6th April 1983 for the benefit of six minors. Out of six minors, three of whom, are the applicants, are now MAJOR. Respondent Nos.4 to 6 who are also beneficiaries under the said Deed of Trust dated 6th April 1983 are also major and are first cousins of the applicants.

3. It is the case of the applicants that the respondents have leased out the trust premises and are not paying the due share of the applicants from the amounts received by way of lease rent and/or compensation. Dispute arose between the parties. The applicants, vide their Advocate's notice dated 23rd October 2012 to the respondents, requested for appointment of sole arbitrator by invoking clause-20 of the Trust Deed. The respondents vide their Advocate's reply dated 31st October 2012, raised various issues about the control and management of the first respondent trust. The respondents, however, did not deny the rights of the applicants to invoke arbitration clause in the said reply. As the respondents refused to appoint an arbitrator, applicants have filed the present application under Section 11(6) of the Act for appointment of arbitrator.

4. Mr. Samdhani, the learned senior counsel appearing for respondent Nos.1 to 3 and Mr Kapadia, the learned counsel appearing for respondent Nos.4 to 6 opposed this application on various grounds.

5. The learned counsel submits that the present application filed under Section 11 is not maintainable on the ground that applicants were not signatories to Trust Deed dated 6th April 1983. Reliance is placed on Section 2(h) of the Act which defines party as under:

“2(h) "party" means a party to an arbitration agreement.”

6. The learned counsel also placed reliance upon Section 7 of the Act in support of their plea that arbitration agreement has to be in writing and shall also be signed by the parties. The learned counsel submits that as the applicants were not admittedly signatories to the Trust Deed, thus not being party to the arbitration agreement and therefore present application for appointment of arbitrator under Section 11 is not maintainable.

7. Mr Kapadia, the learned counsel appearing for respondent Nos.4 to 6 invited my attention to Section 40 and Section 45 of the Act in support of his plea that in case of death of a party to the arbitration agreement, arbitration clause would survive and can be invoked by the legal heirs or representatives of the deceased. Reliance is placed on Section 45 in support of the plea that in case of the proceedings pending before the judicial authority, request can be made by the parties to the agreement or parties claiming through or under him to refer the parties to arbitration. The learned counsel submits that intention of legislature is clear that the parties claiming through a party to arbitration agreement can apply for referring the dispute to arbitration under Section 45, in case of the arbitratio