The court held that disputes arising under a partnership agreement with an arbitration clause are arbitrable despite issues in notice service.

O R D E R

The 1^st respondent was the sole proprietor of “Klum by Prajina Jaanaki”. She was also a designated partner in the 3^rd respondent LLP. The 2^nd respondent is another designated partner of the 3^rd respondent LLP. According to the applicant, she entered into a mutual agreement on 29.10.2021 with the 1^st respondent for investment in the business. A copy of the agreement is produced as Annexure A1. Subsequently a partnership deed was executed on 23.11.2021. A copy of the partnership deed is produced as Annexure A2. In Annexure A2, it is stated that the applicant had contributed Rs.20 lakhs. It is stated by the applicant that disputes arose between the parties regarding the business. A notice was issued on 06.02.2023 in this regard. Later the parties agreed to explore the possibility of a settlement. A meeting was held at Kochi on 28.02.2023 and an understanding was arrived at. Respondents agreed to pay a sum of Rs.18 lakhs to the applicant in full and final settlement of the claims. A copy of the agreement dated 16.06.2023 is produced as Annexure A4.

However, according to the applicant, the respondents failed to make the payment as agreed. Hence the applicant invoked the arbitration clause in the agreement and issued Annexure A5 notice on 07.04.2025. However, the notices issued to respondents 1 to 3 were returned with endorsement “no such addressee.” Thereafter this arbitration request was filed.

2. Notices were issued to the respondents in this arbitration request and respondents 1 and 2 have entered appearance through counsel. They have filed a counter affidavit. In the counter affidavit, the allegations raised in the arbitration request have been specifically denied. According to the respondents 1 and 2, there is no arbitrable dispute.

3. It is clear from the pleadings of the parties that serious disputes have arisen between the applicant respondents. I have perused Annexure A4. It contains an arbitration clause. Applicant had issued notices to respondents 1 to 3 under Section 21 of the Arbitration and Conciliation Act . Though notices were not served, in view of Section 3 of the , the same is of no consequences as the postal authorities had made attempt to serve notice on the address of the respondents known to the applicant. It is also to be noted that the notices in this arbitration request were served on the respondents.

4. In view of the above discussion, I am of the considered opinion that this arbitration request can be allowed and the following directions are issued:

1. The Kerala High Court Arbitration Centre is directed to nominate a District Judge (Retd.) from Panel-III, preferably from Ernakulam, as the sole Arbitrator to resolve the disputes that have arisen between the petitioner and the respondents under Annexure A1 agreement.

2. The learned Arbitrator may entertain all issues between the parties in connection with the said Agreements, including questions of jurisdiction and limitation, if any, raised by the parties. All contentions of the parties are left open and they are at liberty to raise their claims and counterclaims, if any, before the learned Arbitrator, in accordance with law.

3. The Registry shall communicate the substance of this order to the Kerala High Court Arbitration Centre within ten days and the Centre shall inform the learned Arbitrator within a further period of one week and shall obtain duly signed Form 3 as required under Rule 20(4) of the Kerala High Court (Arbitration Centre) Rules, 2025 and forward the same to this Court.

4. Upon receipt of the Form 3, the Registry shall issue a certified copy of this order with a copy of the Form 3 appended to the Kerala High Court Arbitration Centre. The original of t