A partner lacks authority to represent a firm in arbitration without the express consent of other partners, and appointment of a substitute arbitrator requires adherence to agreed procedures under the Arbitration and Conciliation Act.

ORDER :

N.V. SHRAVAN KUMAR, J.

This Arbitration Application has been filed under Section 11 (6)read with Section 15 (2) of the Arbitration and Conciliation Act, 1996, (for short ‘the Act’) seeking for an appointment of substitute Arbitrator for applicants and the respondent to adjudicate claims/disputes arose between the parties.

2. Brief facts as stated in the Arbitration Application are that the Applicant No.1 M/s.Chennai Best Blue Metals, is a partnership Firm, represented by its partner Smt.Sarvepalli Praveena. Applicant No.2 is Smt.Sarvepalli Praveena W/o.Sarvepally Vijay Sekhar. The sole respondent is Sarvepalli Vijay Sekhar.

3. The Applicant and the respondent are partners in the Applicant No.1 Firm vide Partnership Deed dated 03.03.2012 bearing registration No.672 of 2012 registered with the Registrar of Firms, Hyderabad South. The Applicant No.1 Firm is engaged in the business of mines and quarries. The profit and loss sharing ratio of the Applicant No.2 and the Respondent in the Applicant No.1 Firm is40% and 60%, respectively.

4. The Applicant No.1 Firm earlier was granted various mining leases by the then Government of Andhra Pradesh vide Proceedings (i) No.2957/TQL/2012, dated 01.09.2012, which is valid up to24.03.2025, (ii) No.2960/TQL/2012 dated 01.09.2012 valid up to 24.09.2024, (iii) No.2958/TQL/2012 dated 01.09.2012 valid up to 01.05.2024, (iv) No.4427/Part surrender/CTR/2013 dated 07.12.2013 valid up to 24.09.2024. All the proceedings will be referred to as ‘The mining leases’.

5. Applicant No.2 and the respondent are also partners in other Firms namely M/s. Seven Hills Enterprises in which the respondent has 60% share and the Applicant No.2 has 40% and M/s. Seven Hills Sand Factory LLP in which the respondent has 90% share and the Applicant No.2 has 10% share. The respondent had also instituted arbitration proceedings in respect of the said Firms.

6. Applicant No.2 would submit that as the respondent is her husband, she placed complete trust in him for managing the affairs of the Firms and respondent has complete control of the business. Later, the Applicant No.2 came to know that the respondent had forged the signature of the Applicant No.2 and brought into existence two Amendment Deeds dated 22.11.2016 reducing the share of the Applicant No.2 from 40% to 1% in the Applicant No.1 Firm and also in M/s. Seven Hills Enterprises.

7. It is further submitted that the second and third entities are exclusively owned by the Applicant No.2 and are outside the scope of arbitration instituted by the respondent. The Applicant No.2 submits that since 03.03.2012 till date, the respondent has neither disclosed the quantum of business done by the Applicant No.1 Firm nor has paid her share of profit from the sale of minerals to various entities by operating in the mining leases. Therefore, the respondent was called upon to render true and proper accounts of the Applicant No.1 Firm from 03.03.2012 onwards and pay her share of 40% and that the dispute between the parties with respect to the accounts and profits of the Applicant No.1 Firm remains unresolved till date.

8. The respondent has initiated the arbitration proceedings with respect to M/s. Seven Hills Enterprises and M/s. Seven Hil