The court upheld the validity of arbitration clauses in partnership agreements for resolving disputes, emphasizing adherence to arbitration rules.

JUDGMENT

Petitioners are partners of a partnership firm ‘M/s. Win Plus Finance’. The firm was constituted as per Annexure A1 Partnership Deed dated 08.10.2013. The 2^nd respondent is the Managing Partner of the firm.

2. According to the petitioners, from 2022 onwards, the affairs of the firm are under the control of the 2nd respondent. They submit that the details of the business are not being disclosed to them by the 2^nd respondent. The books of accounts are not made available to the petitioners. They allege that the funds of the firm were diverted by the 2nd respondent to different entities created by the 2^nd respondent.

3. In the above background, the petitioners filed an application under Section 9 of the Arbitration and Conciliation Act before the Commercial Court, Thrissur, invoking the arbitration clause in Annexure A1. Annexure A2 notice was issued on 15.04.2025. Notice was served on the 2^nd respondent. As there was no response from the 2^nd respondent, this arbitration request was filed.

4. On receiving notice issued by this Court, the 2^nd respondent entered appearance through Counsel. Heard the learned Counsel for the petitioner and the learned Counsel for the 2^nd respondent. The learned Counsel for the petitioner reiterated the contentions in the arbitration request. The learned Counsel for the 2^nd respondent on the other hand denied the allegations against the 2^nd respondent.

5. From the facts and circumstances of the case, it is obvious that serious disputes have arisen between the parties. Annexure A1 contains a valid arbitration clause. The 2^nd respondent has no dispute regarding the same. Under such circumstances, I am of the view that this arbitration request can be allowed.

Hence, the following directions are issued:-

1. The Kerala High Court Arbitration Centre is directed to nominate an Arbitrator from Panel-III, preferably from Thrissur, as the sole Arbitrator to resolve the disputes that have arisen between the petitioner and the respondents under Annexure A1 Partnership Deed.

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 the Disclosure Statement shall be retained by the Kerala High Court Arbitration Centre.

5. The fees of the learned Arbitrator of the Kerala High Court Arbitration Centre shall be governed by Rule 28 of the Kerala High Court (Arbitration Centre) Rules, 2025. The manner in which the fees and costs payable by the parties shall be governed by Rule 27 of the Kerala High Court (Arbitration Centre) Rules, 2025.

6. If the learned Arbitrator needs the assistance of an expert, then he is at liberty to seek such assistance in the course of the arbitration proceedings.

Sd/-

S.MANU JUDGE