A partner cannot submit a dispute to arbitration without express authority from all partners, as required by Section 19(2)(a) of the Indian Partnership Act.

ORDER :

1. This arbitration request is filed by a partner of M/s.P.K.Chandrasekharan Nair and Co., a partnership firm, in its name. It is stated that the firm was a dealer of the respondent since 1970. The firm was operating a retail outlet of petroleum products of the respondent in the property having an extent 39.620 cents in Survey No.931/1 of Nadama Village owned by Mr.N.Krishnan. An agreement was executed between the firm and the respondent in 1970 which was renewed periodically. Last renewal was on 01.07.2019. A copy of the agreement dated 01.07.2019 is produced as Annexure 1.

2. In 2013, the land owner filed O.S.293 of 2013 before the Sub Court, Ernakulam, for recovery of possession of property and other reliefs against the respondent and the then Managing Partner of the firm. Suit was dismissed and dispute was referred for arbitration as there was an arbitration clause in the lease deed between the respondent and the land owner. After filing of the suit, the land owner refused to renew the lease and to give consent for renewing the explosive licence. The outlet was therefore closed from 21.02.2021. Dispute between the respondent and the land owner was referred for arbitration. While so, the land owner filed C.S.No.80 of 2022 before the Commercial Court, Ernakulam, against the respondent and the then Managing Partner of the firm for compensation for unauthorized occupation after the expiry of the lease. The suit was dismissed for default on 30.08.2022.

3. On 29.06.2022 the respondent sent Annexure 2 letter instructing the firm to find alternate site due to pending litigation. Annexure 3 reply was sent seeking time to sort out the matter and to find alternate site. Later the respondent allowed another dealer to start a new retail outlet on the premises. W.P(C)No.8797 of 2024 was filed aggrieved by the said action. Respondent entered appearance and submitted that a fresh dealership agreement was entered into by it with another dealer. Therefore, the said dealer was impleaded. He produced a copy of the agreement between him and the respondent.

4. It is contended that as per Annexure 1 agreement, the firm was entitled to run the retail outlet for a period of 10 years ending on 30.06.2029. Therefore, it is alleged that the action of the respondent in entering into agreement with another dealer is in breach of Annexure 1 agreement. Annexure 4 is a notice issued to the respondent calling upon to pay a sum of Rs.2,51,60,000/- as damages. There was no response to the notice. Subsequently, Annexure 5 notice dated 19.02.2025 was issued invoking the arbitration clause in Annexure 1 agreement for initiating arbitration. A former Judge of this Court was nominated as the arbitrator. However, no response was received from the respondent and hence the arbitration request was filed.

5. Respondent filed counter affidavit. Allegations in the arbitration request against the respondent are denied in the counter affidavit. Respondent has produced a copy of the partnership agreement as Annexure A, pointing out that Mr.Anilkumar K.C. and Mrs.Ganga Sreekumar were the partners of M/s.P.K.Chandrasekharan Nair and Co. Mr.Anilkumar K.C. holds 51% of the partnership and 49% of the partnership was held by Mrs.Ganga Sreekumar. Respondent states that this arbitration request is not maintainable in view of the specific bar contained in Section 19(2)(a) of the Indian Partnership Act, 1932. Further the respondent states that no express authority was given by