The court reinforced the principle that arbitration agreements must be honored, allowing appointed arbitrators to resolve partnership disputes per agreed terms.

ORDER

The petitioner claims that Annexure 1 agreement is a Deed of Partnership between him and the respondents. He alleges that, subsequently, several disputes have arisen between the parties touching upon and concerning the terms of the said agreement. He asserts that, as per Clause 27 thereof, all disputes regarding the partnership business will have to be decided by the Arbitrator duly appointed by the partners.

2. The petitioner then predicates that, in spite of this, when he approached the respondents through Annexures 3 and 4 requests for appointment of an Arbitrator, and even though he had nominated a particular retired District Judge as the sole Arbitrator, same was not acceded to by them nor have they even responded to it.

3. The petitioner, therefore, prays that this Court appoint a competent Arbitrator in terms of Section 11 (5) of the Arbitration and Conciliation Act, 1996 ('the Act', for short).

4. I have heard Sri.George A.Cherian –

learned counsel for the petitioner and Sri.T.A.Unnikrishnan – learned counsel appearing for the respondents.

5. The request for appointment of an Arbitrator as made afore by the petitioner, was refuted by Sri.T.A.Unnikrishnan – learned counsel for the respondents, alleging that Annexure 1 agreement is in fact an old one and that a new deed had been entered into between the parties in the year 2006. He submitted that in that year, the rights and liabilities of the parties had been fully settled; and alleged that even though petitioner was liable to pay several lakhs to his clients, he has chosen not to do so, but walked away from the business voluntarily.

6. Sri.T.A.Unnikrishnan then added that, in any event, this Arbitration Request is incompetent from the stand point of the laws of limitation and that the question whether petitioner is a partner of the firm or otherwise, are issues that cannot be decided by a sole Arbitrator but only by a Civil Court. He, therefore, reiteratingly prayed that this Arbitration Request be dismissed.

7. I notice that the respondents have filed a counter affidavit on record, wherein, they have also made the averments to the afore effect. However, none of the documents referred to have been produced on record, and in any case, I am of the view that it will not be justified for this Court, while acting under the ambit of Section 11 of the Act, to decide upon these issues affirmatively, since it is certain that the learned Arbitrator can do so, under the provisions of Section 16 of the Act and under the well defined doctrine of 'Kompetenz – Kompetenz', which is accepted in law.

On discerning my mind as afore, Sri.T.A.Unnikrishnan submitted that if this Court is so inclined to appoint a sole Arbitrator, then the issue whether the petitioner continues to be a partner and whether the claims made by him are hit by the Laws of Limitation, may also be left open to be pursued by his clients appropriately. He also prayed that his clients may not be burdened with the payment of any part of the arbitration fees and expenses.

On hearing Sri.T.A.Unnikrishnan as afore, Sri.George A.Cherian – learned counsel for the petitioner, submitted that he has no objection in all the contentions of the respondents being left to be considered by the learned Arbitrator; and that his client will shoulder the entire responsibility of the arbitration fees and expenses, provided provisions for the same as per law is made in the Award.

Taking note of the afore, I deem it appropriate to allow this Arbitration Request as under:

In summation:

(a) I nominate Sri.P.R.Shaji, CC 42/1569 D, Apartment #1, First Floor, Kallath Apartments, Mathai Manjooran Road, Kochi-18, as the sole Arbitrator to adjudicate and resolve the disputes and differences between the parties to this case, arising from and relating to Annexure 1 agreement.

(b) The Registry is directed to communicate a copy of this order to the learned Arbitrator within a period of one week from today and to obtain a Statement of Disclosure from him un