An arbitration agreement must exhibit clear mutual intent from the parties; ambiguity or permissiveness in wording negates enforceability under the law.

JUDGMENT

[VIA HYBRID MODE]

Sanjeev Narula, J. (Oral)

1. The present petition under Section 9 of the Arbitration and Conciliation Act, 1996 [hereinafter the `Act'] seeks interim measures to preserve and protect the rights of the Petitioner in a partnership firm-Metal Cans Company, New Delhi, pending constitution of arbitral tribunal for adjudication of disputes inter se partners of the firm.

2. Vide an ex-parte order dated 23rd August, 2021, Respondents have been restrained from alienating or creating third party interest in respect of immovable properties of the partnership firm and have further been directed to maintain status quo in respect of a property that is stated to have been purchased by siphoning off monies of the firm. The said order is currently in force.

3. The Respondents, at the outset, raised a preliminary issue regarding maintainability of the present petition on the ground that the clause contained in the partnership deed falls short of the essential requirements contemplated under law to constitute an arbitration agreement. On this issue, Ms. Geeta Luthra, Senior Counsel for the Petitioner and Mr. Pawanjit Singh Bindra, Senior Counsel for the Respondents have been heard extensively.

4. In order to appreciate the controversy, it would be apposite to note the clause contained in the Partnership Deed dated 1st April 2011, on which the petition is premised. The same reads as follows:

"Clause 21

Any other matter for which there is no provision in the Deed and dispute relating to the affairs of the Firm shall be mutually decided by the partners. The provisions of the Indian Partnership Act, 1932 which are not in consistent or repugnant to the provisions of this Deed shall apply to all matters not specifically mentioned herein. However the dispute can also be decided under the provisions of the Indian Arbitration Act."

CONTENTIONS

5. Ms. Geeta Luthra, Senior Counsel for the Petitioner has made the following submissions:

5.1. The objection of Respondents regarding maintainability is frivolous and completely misconceived.

5.2. The clause has all the necessary ingredients for qualifying as an arbitration agreement between the parties.

5.3. There is no specific form of arbitration agreement provided under the Act and existence of the same has to be decided based on the facts and circumstances of a particular case.

5.4. For deciding the validity of an arbitration agreement, intention of the parties is to be gathered from the agreement, as well as conduct of parties, correspondences exchanged, and the surrounding circumstances.

5.5. As long as there is a clear intention of parties to opt for arbitration for settlement of disputes, no party should be allowed to take advantage of inartistic drafting of an arbitration agreement, as it would defeat a valid claim.

5.6 The intention of the parties in the present case can be gathered from the fact that the first Partnership Deed dated 01st April, 1997 between Ajay Kumar Gupta, Shashi Gupta, Amit Kumar Gupta and Sapna Gupta, provided for settlement of disputes by way of arbitration, by way of the following clause:

"23. That all the disputes relating to the Partnership Business shall be decided by an Arbitrator and his decision shall be final and binding."

5.7. Upon the proposal of Respondent No. 1, the Petitioner allowed induction of Respondent No. 2, pursuant to which the Partnership was re-constituted on 01st April, 2011. The new partnership deed also provides for dispute resolution by way of arbitration. Relevant clause thereof has alre