CORAM : A.S. CHANDURKAR & RAJESH S. PATIL, JJ.

Date on which the arguments were heard : 13th December, 2024

Date on which the judgment is pronounced : 11th March, 2025.

JUDGMENT (PER RAJESH S. PATIL, J.) :

1. These group of four Arbitration Appeals filed under Section 37 of the Arbitration and Conciliation Act, 1997, challenges an order passed by Sole Arbitrator on 3rd December, 2022 as an interim award, which decided the issue of date of dissolution of the partnership firm, and as confirmed by an order passed by the learned Single Judge of this Court on an application filed under Section 34 of the Arbitration and Conciliation Act, 1997 thereby confirming the view of the learned Sole Arbitrator.

2. The parties are closely related to each other, being family members. The parties entered into four Deed of Partnerships dated 16th January 1996, for the purpose of manufacturing and trading of textile fabrics. There were arbitration clauses in each of the Deed of Partnership. There were three partners in the said partnership firm, all having equal share i.e. 33.33%.

3. As disputes arose between the partners, the respondent herein invoked Arbitration proceedings. By an order dated 15th October, 2003, the parties were referred to Arbitral Tribunal, constituting of the learned Sole Arbitrator Justice M. L. Pendse (Retd).

4. As the proceedings were pending before the Sole Arbitrator, the Appellants issued dissolution notice on 4th April, 2008 on the ground that the partnerships were at will as regards all the four partnership firm. The respondent by her reply dated 10th April 2008 objected to the dissolution notice.

5. As the Sole Arbitrator expressed his inability to continue with the proceedings, by an common order dated 1st July 2010, Justice S. S. Parkar (Retd) was appointed as a new Arbitrator in place of the erstwhile Arbitrator.

6. Before the learned Arbitrator on 27th January 2011, while the matter after recording of evidence was posted for final hearing. Appellants raised an issue of first deciding the date of dissolution of partnership. The learned Arbitrator indicated that the issue would be decided at the stage of final hearing. In March 2011 issues were framed by the learned Arbitrator.

7. In between August and September, 2022, at the time of hearing, the Appellants again raised the issue of date of dissolution of partnership. On behalf of the Appellants written submissions were

filed so also the respondent filed their written submissions. On 3rd December, 2022 an interim award was passed by the learned Sole Arbitrator. The said interim award passed by the learned Sole Arbitrator was challenged before the learned Single Judge of this Court, in an Application filed under Section 34 of the Arbitration and Conciliation Act, 1997 (for short ‘the Act’). By a common order dated 20th April, 2023 the learned Single Judge of this Court dismissed the Petitions filed under Section 34 of the Act upholding the interim award of the learned Sole Arbitrator.

8. By present four Commercial Arbitration Appeals filed under Section 37 of the Act, the appellants have challenged the interim award passed by the learned Single Judge of this Court.

9. Mr. Simil Purohit, learned Senior counsel appeared on behalf of the appellants (original respondents before the Arbitral Tribunal) and made his submissions :-

9.1 He submitted that the there is a fundamental difference between dissolution on one hand and retirement/ death on the other hand. Whilst Retiring, a partner withdraws from the partnership and the status of the partnership continues between the other partners. Retirement is a severance of the relationship/ interest of the retiring

partner from the firm and dissolution is the severance of the inter se relationship of the partners.

9.2 He submitted that thus, retirement has no bearing on dissolution. A partnership-at-will is constructed so that the partners can dissolve the partnership when they desire. Therefore, a plain reading of Section 4