Important Point – Subject matter of suit and subject matter of arbitration are distinct.

ANOOP V. MOHTA, J.

This is an Appeal under Section 37 of the Arbitration and Conciliation Act, 1996 (for short, “the Arbitration Act”), filed by the Appellants-Petitioners, thereby challenging Judgment and order dated 22 December 2015, passed by the learned Single Judge, whereby Chamber Summons No. 905 of 2013 filed by Respondent Nos. 1 to 5, (Original Respondent Nos. 1 to 5) is allowed and revoked the leave granted to the Appellants under Clause XII of the Bombay High Court (Letters Patent) Act, 1866 (for short, “the Letters Patent Act”), by holding that “this High Court has no jurisdiction to entertain, try and dispose of the Arbitration Petition” filed by the Appellants under Section 9 of the Arbitration Act.

2. The Appellants and the Respondents and their relations with each other and the Companies in question are described in the “Appellant No.1 and Respondent No.1 are brothers. Appellant No.2 is the wife of Appellant No.1 and Appellant Nos. 2 and 3 are the Directors of Respondent No.6. Appellant No.3 is the daughter of Appellant Nos. 1 and 2. Appellant Nos. 1, 2 and 3 together will be referred to as the “APS Group”. Respondent No.2 is the wife of Respondent No.1. Respondent Nos. 3 to 5 are the children of Respondent Nos. 1 and 2. Respondent Nos. 1 to 5 together will be referred to as the “CPS Group”. Respondent No. 6 is Maharashtra Erectors Pvt. Ltd. (for short, “MEPL”). Respondent Nos. 1 and 2 were the Directors of MEPL but claim to have resigned as Directors on 27 March 2014. The Applicant has become aware of the resignations only recently. MEPL is a glorified partnership of Appellant No.1 and Respondent No.1 and subsequently their respective wives, carrying on business together since 1978 i.e. for over 30 years. Respondent No.7 is Sanghvi HiLift Pvt. Ltd. (for short, “SHPL” ). Respondent No. 8 is Sanghvi Movers Ltd., (for short, “SML”). Respondent Nos. 6 to 8 are family companies. Appellant No. 1 and Respondent No.1 themselves or through their family members and/or through the said family companies (including the erstwhile Sanghvi Projects Limited) held and hold the family properties, assets and businesses.”

3. There arose family disputes between the Appellants and the Respondents, including about their respective companies and therefore, to settle the dispute they entered into a Memorandum of Understanding (for short, “MOU”) on 8 January 2006. Later on, the Appellants and Respondent Nos.1 to 5 entered into a Deed of Family Settlement and Arrangement (for short, “FSA”) on 24 April 2006, by superseding the MOU. This FSA provides an arbitration clause. Initially an Arbitrator was appointed but, ultimately by order dated 30 October 2010, the Arbitration proceedings were terminated. The family dispute could not be resolved. Arbitration Application No. 34 of 2012 was filed by CPS Group under Section 11 of the Arbitration Act. There were several disputes pending between the parties, therefore, it was resolved to refer those other disputes for mediation. The pending matters were adjourned by consent of the parties accordingly, including Arbitration Application. The Appellants filed Notice of Motion No. 167 of 2013 for adinterim reliefs. By order dated 1 February 2013, the protective relief/injunction was granted in terms of prayer clauses (a),(b) and (c). The statement is made that the same has been in force till 2 February 2016. Another Notice of Motion No. 248 of 2013 was filed in view of stated breaches of the various orders. Application under Section 11 of the Arbitration Act was filed by the Appellants (APS Group) (Arbitration Application (Lodging) No. 493 of 2013) on 3 April 2013 and sought appointment of an Arbitrator in respect of the same family dispute between the parties.

4. After hearing the parties on various issues, by common order dated 20 June 2013, a Single Judge of this Court (CoramAnoop V. Mohta, J.) by consent of the parties, appointed Mr. N.K. Sodhi (Retired) former Chief Justice of the Karnataka H