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2022 Supreme(Mad) 2766

IN THE HIGH COURT OF JUDICATURE AT MADRAS
M. SUNDAR, J.
Usha Singh Panwar - Appellant
Versus
S.D. Syed Sherfudeen & Another - Respondent
Arb. O.P (Com.Div) No. 263 of 2022
Decided On : 08-08-2022

Advocates appeared:
For the Petitioner:C. Kaveen, Advocate.

The main legal point established in the judgment is the narrow interpretation of Section 11(6) and the legislative policy to minimize court intervention in appointing arbitrators.

Headnote:

Arbitration - Partnership Dispute - Arbitration and Conciliation Act, 1996 (Act 26 of 1996) - Section 11(6) - Clause 17 of Partnership Deed - Mayavati Trading case law - Duro Felguera, S.A. case law - N.N.Global principle - Nortel principle

Fact of the Case:

The petitioner filed a petition under Section 11(6) of the Arbitration and Conciliation Act, 1996 to appoint a sole Arbitrator to adjudicate upon disputes arising from a Partnership Deed and dissolve the same.

Finding of the Court:

The Court found that the disputes arose from a partnership deed and the arbitration clause within the deed was the subject of consideration. The Court referred to relevant case laws and legal principles to appoint a sole Arbitrator to adjudicate the disputes.

Issues: The issues involved the appointment of a sole Arbitrator to resolve disputes arising from the partnership deed and the interpretation of Section 11(6) of the Arbitration and Conciliation Act, 1996.

Ratio Decidendi: The Court's decision was influenced by the interpretation of Section 11(6) and relevant case laws, including Mayavati Trading and Duro Felguera, S.A. The Court emphasized the narrow scope of Section 11(6-A) and the legislative policy to minimize court intervention in appointing arbitrators.

Final Decision: The Court appointed a sole Arbitrator to adjudicate the disputes and directed the arbitrator to hold sittings in accordance with the Madras High Court Arbitration Proceedings Rules, 2017.

JUDGMENT

(Prayer: Petitioner filed under Section 11(6) of the Arbitration and Conciliation Act, 1996 to appoint a sole Arbitrator to adjudicate upon the disputes between the petitioner and the respondents arising out of the Partnership Deed dated 03.04.2008 and dissolve the same.)

1. This order will now dispose of captioned matter.

2. This order has to be read in conjunction with and in continuation of proceedings made in the first listing of captioned matter before this Court on 24.06.2022, which reads as follows:

'Captioned 'Arbitration Original Petition' [hereinafter 'Arb OP' for the sake of convenience and clarity] has been presented in this Court on 06.06.2022 under Section 11 of 'The Arbitration and Conciliation Act, 1996 (Act 26 of 1996)' [hereinafter 'A and C Act' for the sake of brevity, convenience and clarity] with a prayer for appointment of a sole Arbitrator.

2. Mr.C.Kaveen, learned counsel for petitioner who is before this Court submits that the captioned Arb OP is predicated on clause 17 of a 'partnership deed dated 03.04.2008' [hereinafter 'primary contract' for the sake of convenience and clarity].

3. Learned counsel submits that in and by primary contract, the petitioner and two respondents brought to existence a partnership firm in the name and style of 'DEI GRATIA ASSOCIATES' inter alia for doing the business of exporting spices and land development, primary activities for residential complex etc., It is submitted that the partnership ran into rough weather necessitating invocation of arbitration clause i.e., aforementioned clause 17 in primary contract which reads as follows:

17. Arbitration:

All the disputes which may arise at any time between the partners of their respective executors or administrators relating to the partnership affairs or the construction of this agreement shall be referred to a single arbitrator to be appointed by them and decision of such arbitrator shall be final and binding'.

4. It is submitted that arbitrable disputes arose as the petitioner sought dissolution inter alia by issue of a notice dated 19.01.2022. Post dissolution, respondents agreed to settle the matter inter alia by selling properties said to have been purchased from the funds of the petitioner. It is not necessary to dilate more on arbitrable disputes as this is a Section 11 legal drill.

5. Vide trigger notice i.e., notice invoking arbitration clause dated 18.05.2022, petitioner has suggested a name of a member of the Bar to act as sole Arbitrator. This trigger notice dated 18.05.2022 has been duly served on both the respondents on 24.05.2022 but there is no response or reply necessitating the presentation of the captioned Arb OP in this Court is learned counsel's say. Learned counsel adds that the aforementioned clause 17 of primary contract serves as an Arbitration Agreement between the parties i.e., Arbitration Agreement within the meaning of Section 2(1)(b) read with Section 7 of A and C Act.

8. Prima facie case made out for issue of notice.

9. Issue notice to respondents returnable in a fortnight i.e., returnable by 08.07.2022 Private notice permitted.

10. List on 08.07.2022'

3. Today, Mr.C.Kaveen, learned counsel for sole petitioner, who is before this Court, submits that post 24.06.2022, there was difficulty in effecting service on the respondents and therefore, the matter was listed before learned Master for completing service. This Court is informed that steps were taken before learned Master and service has since been completed by resorting to substituted mode of service. The proceedings of learned Master dated 04.08.2022 are as follows:

'Paper publication effected as ordered. Affidavit of service filed and verified. Service completed. List the matter before the Hon'ble Judge's Court on 08.08.2022.'

4. The respondents have not chosen to come before this Court to dispute the existence of the arbitration agreement between the parties. Considering the scope of a legal drill und

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