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IN THE HIGH COURT OF KERALA AT ERNAKULAM
N. Nagaresh, J.
Sajini Mathew, wife of Abraham P. Mathew – Petitioner
Versus
Mariamma Sakhariah, wife of V.A. Sakhariah – Respondent
Arbitration Request No.145 of 2022
Decided On : 12-01-2023
Arbitration and Conciliation Act, 1996 - Section 21 - Partnership Deed - Disputes - Appoint an Arbitrator - Petitioner and respondent executed a Partnership Deed to establish a Partnership under name and style 'St. Mary's Agencies'- Firm is engaged in business of automobile fuels, oil and allied goods - It was decided by Partners to establish a petroleum retail outlet for carrying out above business - On account of interference from part of husband of respondent, it became impossible for petitioner to look after business of firm in a peaceful manner, contends petitioner - On account of undesirable interferences, several disputes have cropped up between petitioner and respondent - Cordial relationship between the Partners strained - On account of undesirable events, it has become impossible for petitioner to continue with partnership arrangement and she desired to dissolve same - Therefore, it is evident that there should be a request received by one of the parties, in order to commence arbitral proceedings. There is no valid request made by the petitioner in this Arbitration Request, in order to commence arbitration. Para 17
Finding of Court : Appointment procedure contemplated under Section 11(5) requires a receipt of a request by one party from other party to agree on an Arbitrator - There is no valid request made by any of parties to agree on an Arbitrator - Therefore, Court cannot exercise powers under Section 11 (5) to appoint an Arbitrator - Assuming that present case falls under Section 11(6), even then, a party has to fail to act as required under procedure prescribed by arbitration agreement, in order to justify appointment of Arbitrator under Section 11(6) of Act, 199 - In this case, there is nothing on record to show that there was any valid attempt by petitioner to appoint an Arbitrator by mutual agreement - Hence, Court cannot invoke powers under Section 11(6) of Act, to appoint an Arbitrator.
Result : Arbitration Request therefore fails and it is consequently dismissed.
ORDER :
1. The petitioner and respondent executed a Partnership Deed on 15.09.2007 to establish a Partnership under the name and style 'St. Mary's Agencies'. The firm is engaged in the business of automobile fuels, oil and allied goods.
2. It was decided by the Partners to establish a petroleum retail outlet for carrying out the above business at Manarcadu. On account of the interference from the part of the husband of the respondent, it became impossible for the petitioner to look after the business of the firm in a peaceful manner, contends the petitioner.
3. On account of the undesirable interferences, several disputes have cropped up between the petitioner and the respondent. The cordial relationship between the Partners strained. On account of the undesirable events, it has become impossible for the petitioner to continue with the partnership arrangement and she desired to dissolve the same.
4. The Partnership Firm has been conducting the business on the basis of a Dealership Agreement between the firm and the Indian Oil Corporation Limited, executed on 22.08.2008. The period of the Dealership was fixed as 15 years from the date of execution. The Dealership Agreement will be terminated by efflux of time on 21.08.2023.
5. The partnership between the petitioner and the respondent is one at will. As per Clause 19 of Annexure-1 Partnership Deed, disputes or differences of opinion among the Partners, if not amicably settled, should be referred to an arbitrator mutually agreed upon. The disputes between the petitioner and the respondent arose as early as in the year 2021 itself, regarding the conduct of the business of the firm. Therefore, the petitioner informed the respondent that she suggests Bobby John K.A., Advocate, Kottayam as the Arbitrator. She also intimated the respondent that the respondent will be at liberty to suggest an Arbitrator of her choice, if she was dissatisfied with the Arbitrator suggested by the petitioner. The petitioner handed over a letter dated 15.03.2022 to the respondent requesting the appointment of the Arbitrator for settlement of disputes. The respondent has not replied. Hence, the petitioner filed the Arbitration Request.
6. The respondent entered appearance through counsel and resisted the Arbitration Request. The respondent stated that the application is premature and is liable to be dismissed at the very threshold. The original partnership agreement has not been produced by the petitioner. The allegations made in the AR are absolutely incorrect. The petitioner has not issued any notice or other indentures expressing her willingness to quit from the Partnership Firm or has opted her to exercise her option at will. The petitioner has not stated in her petition the date on which she expressed her will to quit from Partnership and what are the reasons for her exercising the option. It is also not stated in her petition as to from which date onwards the dispute had arisen with particular reference to:
(b) The date on which the alleged dispute had arisen.
(c) The dates and events pointing out the fact that the continuance of the partnership business will not be conducive to her.
(d) Signifying the intention to dissolve the partnership business. No document or scrap of paper has been produced by the petitioner to establish her allegations to hold that there was a dispute.
7. Clause 19 pre-supposes a dispute and every endeavor shall be made to settle it amicably, failing which alone the question of reference arises. Even as per Clause 19, the contemplated Arbitrator should be by consensus failing which alone the petitioner can resort to Section 11(6) of the Act.
8. In this case, there is no dispute raised to the notice of the respondent. There was no amicable settlement of the alleged dispute due to the fact that there is no dispute at all. As far as the agreement on the name of the Arbitrator is concerned, the respondent was never issued with any letter or correspond
The main legal point established in the judgment is that the bar imposed under Section 69 of the Partnership Act, 1932, does not apply to arbitration proceedings under the Arbitration and Conciliatio....
The main legal point established is that if a contract contains an arbitration clause and the Arbitrator has not been appointed, the High Court is required to appoint an Arbitrator for resolution of ....
The main legal point established in the judgment is that the dispute amongst the partners regarding the dealings of the firm could be referred to arbitration as per the partnership deed, but once the....
The arbitration clause in a partnership deed survives dissolution claims, allowing parties to seek arbitration for unresolved disputes.
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