The arbitration clause in a partnership deed survives dissolution claims, allowing parties to seek arbitration for unresolved disputes.

ORDER :

1. Petitioner has filed this Arbitration Request invoking Section 11 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as “the Act”), seeking to appoint an Arbitrator to resolve the disputes that have arisen between the petitioner and the respondents.

2. Petitioner and the respondents had entered into Annexure-1 partnership deed dated 13.06.2023 for carrying on business under the name and style “Lintas Beauty Salon & Bridal Studio”. The said partnership deed contains an arbitration clause as clause 18, which reads as follows :

“18. That if any dispute shall arise between the partners in respect of the conduct of the business of the partnership or in respect of the interpretation, operation or enforcement of any of the terms and conditions of this deed or in respect of any other matters, clause, or things whatsoever or not herein provided for the same shall be settled by arbitration.”

3. It is stated that Annexure-1 deed envisaged the petitioner to be the Managing Partner of the partnership firm and that the petitioner had taken steps towards furthering business of the firm like entering into a licence agreement with the owner of the building wherein the parlour was to be based, furnishing the same, obtaining a licence from Cherpulassery Municipality in the name of the firm etc. Subsequently, various disputes arose between the petitioner and the respondents concerning running of the firm, the intricate details whereof may not be of relevance for the disposal of this Arbitration Request. Suffice it to say that a legal notice dated 19.04.2024 invoking the arbitration clause was issued by the petitioner to the respondents. Since the respondents did not reply favourably to the request for appointment of Arbitrator, the petitioner has moved this Arbitration Request invoking the jurisdiction vested in this Court under Section 11 of the Act.

4. The respondents entered appearance and filed a detailed counter affidavit producing therewith Annexures R1 (a) to R1 (d). They admitted in the counter affidavit that Annexure-1 partnership deed dated 13.06.2023 had been executed between the parties, and the firm had started functioning. However, they denied knowledge regarding the registration of the firm and contended that the firm had already been dissolved in the year 2023 itself. The contentions put forth by the petitioner in the Arbitration Request regarding him expending money and furnishing the building are denied and they put forth a different version regarding the events leading to the creation of the partnership. It is stated that the respondents had contributed substantially to the partnership and had put in more money than the petitioner. All the allegations made by the petitioner in the Arbitration Request as against the respondents including those concerning the alleged transferring of money to the personal account, removing staff of the firm etc. are denied. After elaborating on their version of facts, the respondents primarily contend that reference to arbitration as sought in the Arbitration Request is not maintainable as the partnership had already been dissolved as evidenced by a deed of dissolution produced as Annexure R1(d). The counter affidavit also placed reliance on Annexure R1(a), the M.A.(Arbitration) No.1 of 2024 filed by the petitioner before the before the Commercial Court, Ottappalam, and Annexure R1(b) written statement filed therein by the respondents therein. The reply notice dated 04.05.2024 caused to be issued by the respondents is also produced and relied upon.

5. The petitioner filed a reply affidavit dated 18.01.2025 inter alia, stating that he has no knowledge of the alleged execution of Annexure 1(d) deed of dissolution. He denied signing such a dissolution deed and stated that the same was a forged document. All statements regarding the dissolution of the firm are denied by him and state that he has never issued a cheque for withdrawing any amounts as alleged in paragraph 6 of