The court upheld the validity of an arbitration clause in a partnership deed, allowing for arbitration despite the petitioner resigning.

O R D E R

Petitioners and the respondents 1 and 2 are the partners of the 3^rd respondent partnership firm. The firm was registered on 28.05.2024. A copy of the partnership deed is produced as Annexure B.

2. According to the petitioner, he invested Rs.30 lakhs initially in the partnership business and later advanced an amount of Rs.11,12,500/- also. Thereafter some differences of opinion arose between the petitioner and respondents 1 and 2 regarding the management of the business. The petitioner therefore resigned from the partnership notifying the resignation with effect from 01.09.2025. This was acknowledged by the respondents.

3. Petitioner states that an amount of Rs.41,12,500/- is due to him with 12% interest from the 3^rd respondent firm as also the other respondents jointly and severally. Annexure D is an e- mail communication issued by the petitioner demanding the settlement of claims. It was issued on 23.10.2025. The 2^nd respondent sent a reply acknowledging that Rs.30,58,719/- was payable to the petitioner. Since the respondents did not acknowledge the entire claim made by the petitioner, the petitioner issued Annexure F communication invoking the arbitration clause in the partnership deed. The request was declined by the respondents by Annexure G communication. Therefore the petitioner has approached this Court invoking the power under Section 11 of the Arbitration and Conciliation Act 1996. Notice was issued and respondents have entered appearance. Respondents 1 and 3 have filed counter affidavit. It is stated in the counter affidavit that the amount claimed by the petitioner is untenable. It is also stated that the calculations of the petitioner were not accepted or admitted by the respondents. The respondents have denied every allegation of the petitioner in the arbitration request. It is further stated that upon resignation, the petitioner has ceased to have any subsisting rights under the partnership deed and therefore he is not entitled to invoke the arbitration clause also.

4. Heard the learned counsel for the petitioner, the learned counsel for respondents 1 and 3 and the learned counsel for the 2^nd respondent. Perused the pleadings.

5. On appraising the pleadings and arguments advanced at the time of hearing, I am of the view that serious disputes have arisen between the petitioner and the respondents. The partnership deed contains an arbitration clause. This is not denied by the respondents also. The petitioner has invoked the arbitration clause by issuing a proper request to the respondents. Under such circumstances, no further aspects need to be considered and adjudicated by this Court in this arbitration request. Respondents 1 and 3 have raised serious contentions. However I am of the view that those contentions can be left to be considered by the Arbitrator at appropriate stage of the arbitral proceedings.

Therefore this arbitration request is allowed and the following directions are issued:

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

2. The learned Arbitrator may entertain all issues between the parties in connection with the said Agreement, 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 Fo