The court emphasized the importance of family arrangements and settlements, and upheld the validity of the MOU, applying principles of stamp duty, registration, and readiness and willingness to perform the contract.

1. These arbitration petitions arise out of an award passed by a sole arbitrator on 12 July 2011 (and corrected on 24 August 2011) in an arbitration reference. By this impugned award, the learned arbitrator partly allowed the claims of the Claimants, who are Respondents in these arbitration petitions. Arbitration Petition No.974 of 2011 is filed by Respondent No.5 before the sole arbitrator, whilst Arbitration Petition No.1069 of 2011 is filed by the other Respondents before the arbitrator, both under Section 34 of the Arbitration and Conciliation Act, 1996 (“Act”).

2. The Claimants and Respondents before the sole arbitrator are two groups of family members. The Claimants are a group of family members represented by one Hemant D. Shah (“HDS group”), whilst the Respondents are represented by Chittaranjan D. Shah (“CDS group”). Hemant D. Shah (“HDS”) and Chittaranjan D. Shah (“CDS”) are brothers. It is the case of the Claimants (i.e. Respondents to both these petitions) that the larger family comprising of both the groups had diverse properties including interests in various concerns including partnerships and companies and held properties in which one or the other or more members of both groups were interested; that on 9 April 1994, a family settlement was arrived at between the two groups under which the various concerns and properties and other interests were divided between the groups and separately allotted to the two groups; that a record of such family arrangement or settlement was prepared in the form of a Memorandum of Understanding (“MOU”); that the MOU was substantially implemented and acted upon voluntarily and with free consent of both sides, before disputes arose between the parties in connection with the interpretation, and mode and manner of enforcement of the clauses of the MOU; that these disputes led to the filing of a suit by the HDS group before this Court, being Suit No.1421 of 1997; that by consent of parties, the subject matter of that suit was referred to the arbitration of Mr. Justice V.D. Tulzapurkar (Retd.), who entered upon reference and held several meetings and heard the matter; that during the pendency of the reference, Mr. Justice Tulzapurkar (Retd.) expired; that thereafter, by another consent order, Mr. Justice Dhanuka (Retd.) was appointed as a sole arbitrator in substitution; that the learned arbitrator proceeded to hear the reference further; and that the learned arbitrator proceeded to hold partly in favour of the HDS group and awarded some of the claims of the HDS group. This award is challenged by CDS and others of his group on various grounds in Arbitration Petition No.1069 of 2011. The award is separately challenged by Respondent No.5 before the arbitrator, a member of the CDS group, in Arbitration Petition No.974 of 2011. Apart from adopting the grounds of challenge in the petition of the CDS group, the Petitioner in Arbitration Petition No.974 of 2011 challenges the jurisdiction of the learned arbitrator on the ground that he was not a party to the arbitration agreement and the learned arbitrator had no authority to bind the Petitioner or his property whilst passing the impugned award. This, in a nutshell, is the controversy in these petitions.

3. Let us first take up the plea of lack of jurisdiction of the arbitral tribunal insofar as the Petitioner in Arbitration Petition No.974 of 2011 is concerned. He was Respondent No.5 before the sole arbitrator. He had challenged the jurisdiction of the sole arbitrator under Section 16 of the Act before the arbitrator on the footing that he was neither a party to the MOU nor did he consent to the appointment of the arbitrator. The Petitioner was concerned with the arbitration in two capacities, one as a member of Shri Chittaranjan D. Shah HUF and the other as an individual belonging to the CDS group. The Petitioner submitted that at any rate, assuming that CDS as the karta could bind him as a member of the HUF, CDS had no authority t