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2025 Supreme(Guj) 1916
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
Sunita Agarwal, C.J., D.N.Ray, J.
Hiral Nitinkumar Undavia – Petitioner
Versus
Fenil Shah & Anr. – Respondents
R/Special Civil Application No. 17690 of 2024, R/Special Civil Application No. 17691 of 2024
Decided On : 11-09-2025
Important Points
Subject
Civil Law - Arbitration
Act Referred
Headnote
(B) Jurisdiction - Courts must limit their examination to the existence of arbitration agreements, leaving substantive disputes to arbitral tribunals. (Paras 76.5, 76.6)
Facts of the case:
Dispute over partnership structure and claims arising from the operation of Authentic HR Services led to petitions invoking arbitration. The original plaintiff contested the partner's claims, citing coercion in forming the partnership under the arbitration clause.
Findings of Court:
The court upheld the validity of arbitration clauses across the partnership agreements, asserting that disputes were arbitrable.
Issues: Whether disputes involving a non-signatory can be referred to arbitration, and if the arbitration clause is applicable in the context of coercion claims raised by the plaintiff.
Ratio Decidendi: Courts indicated that it was improper to bifurcate disputes involving non-signatories, thus asserting that jurisdiction-related issues are best addressed by arbitral tribunals.
Result: Applications under Section 8 allowed, and lower court decisions dismissed.
For the Petitioner: Mr. Parv S Gupta, Mr. S P Majmudar
For the Respondent: Anshul N Shah
| Table of Content |
|---|
| 1. petition invoking supervisory jurisdiction. (Para 1 , 2 , 3) |
| 2. facts related to the partnership and arbitration clauses. (Para 4 , 5 , 6 , 7 , 8) |
| 3. procedural history of the case and decisions of lower courts. (Para 10) |
| 4. arguments regarding arbitration and specific roles of parties. (Para 11 , 12 , 13 , 14) |
| 5. court's analysis of arbitration agreement's validity. (Para 15) |
| 6. findings on arbitration agreement and jurisdiction. (Para 16 , 17 , 18) |
| 7. final judgment allowing arbitration. (Para 19 , 20) |
JUDGMENT :
D.N.RAY, J.
1. Heard Mr. S.P. Majmudar, learned advocate with Mr. Parv S. Gupta, learned advocate for the petitioner and Mr. Anshul N. Shah, learned advocate for the respondent no. 1.
2. Two petitions involving similar facts and prayers have been filed. For the sake of convenience, Special Civil Application No. 17691 of 2024 is treated as the lead matter. The decision rendered in this petition shall govern the outcome of the connected petition as well.
3. The petitioners have filed the present petition, invoking the supervisory jurisdiction of this Court, with the following prayers:-
“(A) YOUR LORDSHIPS may be pleased to issue an appropriate writ, order or directions quashing and setting aside the (i) impugned order dated 15.12.2023 passed by the learned 26th Additional Senior Civil Judge, Vadodara below applications Exh.21, 24 and 25 in Special Civil Suit No. 24 of 2019 (Annexure E to the present petition) as well as (ii) impugned judgment and order dated 10.10.2024 passed by learned 4th Additional District Judge, (Commercial Court) Vadodara in Civil Misc. Appeal No.7 of 2024 (Annexure G to the present petition) and YOUR LORDSHIPS may be pleased to allow the prayers made by the petitioner below application Exh.24 under Section 8 Arbitration & of the Conciliation Act preferred by the petitioners to refer the dispute for arbitration, in the interest of justice;
(B) During the pendency and final disposal of the present petition, YOUR LORDSHIPS may be pleased to stay the operation, execution and implementation of the (i) impugned order dated 15.12.2023 passed by the learned 26th Additional Senior Civil Judge, Vadodara below applications Exh.21, 24 and 25 in Special Civil Suit No.24 of 2019 (Annexure E to the present petition) as well as (ii) impugned judgment and order dated 10.10.2024 passed by learned 4th Additional District Judge, (Commercial Court) Vadodara in Civil Misc. Appeal No.7 of 2024 (Annexure G to the present petition) as well as stay further proceedings of Special Civil Suit No.24 of 2019 pending before the learned 26th Additional Senior Civil Judge, Vadodara, in the interest of justice;
(C) Pass any such other and/or further orders that may be thought just and proper, in the facts and circumstances of the present case.”
4. The facts of the case, as apparent from a perusal of the records, indicate that the respondent No.1 had filed a suit being Special Civil Suit No.24 of 2019 against the appellants and the respondent No.2 (original defendant No.3). The prayers in the said Civil Suit are reproduced hereinbelow for ready reference :-
“a. To declare that the Plaintiff is the sole proprietor of Authentic HR Services and the Defendants have no right, share or interest in the business or the property of the firm.
b. To restrain the Defendant no. 1 to claim as a partner of Authentic HR Services c. To order that the Defendants and/or their heirs, assigns, successors, agents, etc. are restrained permanently form interfering in the business of the Plaintiff's firm Authentic HR Services.
d. To order the Defendants to deliver up the Indenture of Partnership dt. 29/09/2014 and the Admission Cum Retirement Partnership Deed dt. 05/10/2016 and to further order cancelling the same.
e. To order the Defendants jointly and severally to refund the amount of Rs. 18,37,395/- to the Plaintiff.
f. To order the Defendants to pay interest @ 12% from the date of transfer of the amount illegally till the date of repayment.
g. To order
