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2022 Supreme(Mad) 1460

IN THE HIGH COURT OF JUDICATURE AT MADRAS
M. SUNDAR, J.
R. Vedagiri - Appellant
Versus
K. Rajakumari & Another - Respondent
Arb. O.P (Com.Div.) No. 313 of 2021
Decided On : 05-04-2022

Advocates appeared:
For the Petitioner:D. Parthasarathy, Advocate. For the Respondents:R. Roshini, Rohan Rajasekaran, Advocates.

The main legal point established in the judgment is the limited legal scope of examining the existence of an arbitration agreement as per Section 11 of the Arbitration and Conciliation Act, 1996, and the legislative intent to minimize court intervention at the stage of appointing the arbitrator.

Headnote:

Arbitration - Partnership Dispute - Arbitration and Conciliation Act, 1996 (Act No.26 of 1996) - Section 11 - Clause 13 of Partnership Deed - Mayavati Trading case law, Duro Felguera principle - [Section 11 of A and C Act] - [Clause 13 of Partnership Deed] - [Mayavati Trading case law, Duro Felguera principle] - The court appointed a sole arbitrator to adjudicate the disputes arising from the partnership deed and subsequent amendments, based on the existence of an arbitration agreement as per Section 11 of the Arbitration and Conciliation Act, 1996. The court relied on the Mayavati Trading case law and Duro Felguera principle to emphasize the limited legal scope of examining the existence of an arbitration agreement and the legislative intent to minimize court intervention at the stage of appointing the arbitrator.

Fact of the Case:

The case involved an Arbitration Original Petition filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 to adjudicate upon differences and disputes between the parties as per the Partnership Deed dated 11.07.2016.

Finding of the Court:

The court found that the disputes arising from the partnership deed and subsequent amendments were arbitrable, and appointed a sole arbitrator to adjudicate the disputes based on the existence of an arbitration agreement.

Issues: The main issue was to determine the existence of an arbitration agreement and appoint an arbitrator to adjudicate the disputes between the parties.

Ratio Decidendi: The court's decision was based on the limited legal scope of examining the existence of an arbitration agreement as per Section 11 of the Arbitration and Conciliation Act, 1996, and the legislative intent to minimize court intervention at the stage of appointing the arbitrator.

Final Decision: The court appointed a sole arbitrator to adjudicate the disputes arising from the partnership deed and subsequent amendments, and there was no order as to costs.

JUDGMENT

(Prayer: Arbitration Original Petition filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 to adjudicate upon the differences and disputes between the parties hereto as per the Partnership Deed dated 11.07.2016.)

1. This order will now dispose of the captioned 'Arbitration Original Petition' (hereinafter 'Arb OP' for the sake of brevity) which is presented in this Court on 14.12.2021 under Section 11 of 'The Arbitration and Conciliation Act, 1996 (Act No.26 of 1996)' [hereinafter 'A and C Act' for the sake of convenience and clarity] with a prayer for appointment of an Arbitrator.

2. Mr.D.Parthasarathy, learned counsel for sole petitioner and Ms.R.Roshini, learned counsel representing Mr.Rohan Rajasekaran, learned counsel for both the respondents in the captioned Arb.OP are before this Court.

3. Read this in conjunction with and in continuation of earlier proceedings made by Hon'ble predecessor Judge on 03.01.2022 followed by proceedings made in the listing on 19.01.2022 and my proceedings dated 28.03.2022, which read as follows:

'Proceedings dated 03.01.2022

Issue notice to the respondents returnable on 19.01.2022. Private notice is also permitted.

2. List the matter on 19.01.2022.'

'Proceedings dated 19.01.2022

Mr.Rohan Rajasekaran, learned counsel enters appearance on behalf of the respondents and seeks time to file a counter. List the matter in the 2nd week of February 2022.'

'Proceedings dated 28.03.2022

Ms.N.Gomathi, learned counsel for sole petitioner and Mr.Rohan Rajasekaran, learned counsel for two respondents are before this Court.

2. Captioned Arb OP is under Section 11 of 'The Arbitration and Conciliation Act, 1996 (Act No.26 of 1996)' [hereinafter 'A and C Act' for the sake of brevity, convenience and clarity] and the prayer talks about partnership deed dated 11.07.2016 but the partnership deed has not been placed before this Court as part of the case file.

3. Mr.Rohan Rajasekaran, learned counsel for respondents submits that this partnership deed has been subsequently amended twice over on 16.07.2016 and 01.04.2019. To be noted, 16.07.2016 partnership deed alone has been placed before this Court as part of case file, qua typed-set of papers.

4. Faced with the above situation, learned counsel for petitioner requests for time to do her home work, acquaint herself with the facts get further instructions (if any) and come before this Court

5. List after one week. List on 05.04.2022.'

4. The aforesaid proceedings are telltale qua the trajectory the matter has taken thus far in this Court. Disposal of captioned Arb OP has become fairly simple as, though the respondents have filed a counter affidavit, learned counsel for respondents today very fairly submits that respondents do not dispute the existence of arbitration agreement. Obviously the claims are disputed and that will be subject matter of arbitration. The scope of a legal drill under Section 11 of A and C Act is within the limited legal perimeter of examining the existence of an arbitration agreement and this principle was laid down by Hon'ble Supreme Court in oft-quoted Mayavati Trading case law [Mayavati Trading Private Limited Vs. Pradyuat Deb Burman reported in (2019) 8 SCC 714], most relevant paragraph in Mayavati Trading case law is paragraph 10, which reads as follows:

'10. This being the position, it is clear that the law prior to the 2015 Amendment that has been laid down by this Court, which would have included going into whether accord and satisfaction has taken place, has now been legislatively overruled. This being the position, it is difficult to agree with the reasoning contained in the aforesaid judgments, as Section 11(6- A) is confined to the examination of the existence of an arbitration agreement and is to be understood in the narrow sense as has been laid down in the judgment in Duro Felguera SA.'

(underlining made by this Court to supply emphasis and highlight)

5. Aforementioned paragraph 10 of Mayavati Trading case law takes this

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