IN THE HIGH COURT OF JUDICATURE AT BOMBAY
BHARATI DANGRE, J.
Ashwin Maganlal Savani - Applicant
Versus
Himadri Davda - Respondent
Commercial Arbitration Application (L) No.9910 Of 2021
Decided On : 27-06-2023
Arbitration - Appointment of Sole Arbitrator - Clause 19 of the Will - [ARBITRATION] - [Appointment of Sole Arbitrator] - [Clause 19 of the Will] - [The court discussed the interpretation of Clause 19 of the Will and whether it constituted an arbitration agreement. The court analyzed the intention of the parties, the presence of disputes, and the essential elements of an arbitration agreement as per Section 7 of the Arbitration and Conciliation Act. The court concluded that Clause 19 did not amount to an arbitration agreement and dismissed the Commercial Arbitration Application.]
Fact of the Case:
The Applicant sought the appointment of a Sole Arbitrator in accordance with Clause 19 of the last Will and testament of Mr. Maganlal Savani. The Applicant and the Respondent, both surviving heirs of the deceased, entered into agreements aimed at settling/administering part of the estate. Disputes arose when the Applicant discovered that the Respondent had accessed the bank locker and removed jewelry, which was part of the deceased's estate. The Applicant alleged misappropriation of certain amounts due to the deceased by the Respondent. After failed attempts at amicable resolution, the Applicant invoked arbitration in terms of Clause 19 of the Will by addressing a notice to the Advocate of the Respondent.
Finding of the Court:
The court found that Clause 19 of the Will did not constitute an arbitration agreement as it lacked the necessary consensus between the parties and did not refer to disputes but rather to complaints or grievances. The court also dismissed the argument that the Deed of Family Understanding incorporated the arbitration clause. The court held that there was no valid arbitration agreement between the parties and therefore dismissed the Commercial Arbitration Application.
Issues: The main issue was whether Clause 19 of the Will constituted an arbitration agreement and whether the disputes were arbitrable. The court also considered the effect of the Deed of Family Understanding in incorporating the arbitration clause.
Ratio Decidendi: The court's decision was based on the interpretation of Clause 19 of the Will and the essential elements of an arbitration agreement as per Section 7 of the Arbitration and Conciliation Act. The court concluded that there was no valid arbitration agreement between the parties, and therefore, the Commercial Arbitration Application was dismissed.
Final Decision: The court dismissed the Commercial Arbitration Application as Clause 19 of the Will did not amount to an arbitration clause and there was no valid arbitration agreement between the parties.
JUDGMENT :
1. The present Application seek appointment of Sole Arbitrator in terms of a clause contained in the last Will and testament of Mr.Maganlal Savani, and the Applicant, being a surviving heir of Maganlal, allege that since the disputes have arisen with another surviving heir, the Respondent, an Arbitrator nominated in the Will, may be appointed for resolving them.
2. Heard Dr. Abhinav Chandrachud alongwith Juhi Valia for the Applicant and Mr.Mayur Khandeparkar alongwith Ativ Patel for the Respondent. The brief facts which could be gleaned from the Application as well as the Reply filed by the Respondent can be encapsulated in the following Paragraphs.
3. The Applicant and the Respondent are two surviving heirs of late Maganlal, who died on 25.05.2017, leaving behind his last Will and Testament dated 02.07.2016.
Under the Will, the Applicant was appointed as the Sole Executor and trustee of the estate. In the capacity as a Sole Executor of the Will, the Applicant applied for grant of Probate to the High Court of Bombay and the Respondent affirmed the Affidavit, agreeing to the grant of Probate, as a consequence of which, the High Court was pleased to grant Probate on 26.03.2018.
4. Pursuant to this, the Applicant and the Respondent entered into three Agreements recording the understanding arrived amongst themselves and these documents are in form of (A) Deed of Family Understanding dated 02.12.2017; (B) Deed of Gift dated 02.12.2017; and (C) Declaration-cum-Possession receipt dated 02.12.2017.
The above documents are aimed at settlement/administering part of the estate of their deceased father.
It is the contention of the Applicant, that his deceased father held a joint locker alongwith the Respondent, with the Bank of India and prior to the execution of the three documents, the Respondent had executed a letter on printed form of the Bank, instructing the custodian of the said deposit vault of the Bank to cancel her name as joint lessee of the said locker. However, around 2019, the Applicant caught hold of the said letter, and it was revealed to him that after the death of the deceased, the Respondent had accessed the bank locker and had removed the jewellery, which incidentally form part of the estate of the deceased.
It is the specific contention of the Applicant that, by virtue of the residual clause in the Will, the jewellery was bequeathed to him and therefore, opening and accessing the locker without his knowledge was an act of impropriety and misappropriation on part of his sister.
The Applicant also allege that he gained the information that certain amounts, which were due to the deceased, in his capacity as beneficiary of the family trust, were also misappropriated by the Respondent.
5. In the wake of aforesaid grievance, the Applicant made an attempt to amicably resolve the issue, by sitting across the table, but to his utter dismay, the Respondent though promised for amicable settlement, after consulting her husband, failed to revert and rather, is alleged to have admitted that she held the property belonging to the deceased to which the Applicant was entitled, but she would have to consider how to repay the same in view of the investment having been made by her, which would require its liquidation for the purpose of effecting the payments.
Since no workable solution was forthcoming, the Applicant addressed letter to the Respondent, intimating her that certain amounts which were due to the deceased in his capacity of the beneficiary of the family trust were misappropriated by her and she also intimated about her malafide act of removing jewellery from the locker which was part of the estate of the deceased, to which the Applicant was entitled under the residual clause of the Will.
Though the Respondent replied the said letter, but she failed to furnish any details as sought by the Applicant and this constrained the Applicant to invoke arbitration in terms of Clause 19 of the Will by addressing a notice dated
K.K. Modi vs. K.N. Modi & Ors.
Giriraj Garg vs. Coal India Limited & Ors.
Vijay Kumar Sharma alias Manju vs. Raghunandan Sharma Alais Baburam & Ors.
No arbitration clause relating to dispute between the parties in not appointing appellant as stockist and claim of compensation towards loss of goodwill and reputation. High Court erred in proceeding....
The court established that an arbitration agreement can be inferred from the conduct of the parties and the documents exchanged, and that a signed delivery challan containing an arbitration clause co....
The court emphasized the importance of upholding arbitration agreements and referred to the judgment in Pravin Electricals Pvt. Ltd. vs. Galaxy Infra and Engineering Pvt. Ltd. to support the appointm....
The use of 'may' in arbitration agreements indicates optionality rather than obligation, requiring mutual consent for arbitration to be valid.
The main legal point established in the judgment is the requirement for an unequivocal and unambiguous consent by the parties to arbitrate, and the application of the prima facie test to determine th....
A party does not have to name an Arbitrator unless mutual consent exists, emphasizing the validity of the Trigger Notice in seeking arbitration and the appointment of a Sole Arbitrator.
Login now and unlock free premium legal research
Login to SupremeToday AI and access free legal analysis, AI highlights, and smart tools.
Login
now!
India’s Legal research and Law Firm App, Download now!
Copyright © 2023 Vikas Info Solution Pvt Ltd. All Rights Reserved.