THE HON’BLE SRI JUSTICE T. VINOD KUMAR ARBITRATION APPLICATION No. 77 of 2024

ORDER

The present Arbitration Application is filed under Section

11(5) of the Arbitration and Conciliation Act, 1996 (hereinafter 'the Act, 1996') for appointment of a sole arbitrator to resolve the disputes between the parties.

2. Heard Mr. Mohammed Omer Farooq, learned counsel for the applicant, Mr. B. Vamshidhar Reddy, learned counsel for the Respondents. Perused the Record.

3. The Applicant and the Respondents No. 1 to 3 are siblings. Whereas the Respondent No. 4 & 5 are the legal heirs of Late. Jawahar Ashtarian who is the sister of the Applicant and the Respondents no. 1 to 3. A reconstitution of Partnership Deed dated 01.10.2020 was entered into by the Applicant, Respondents No.1 to 3 along with Late. Jawahar Ashtarian for running a partnership firm in the name and style of M/s. Café Bahar and Restaurant.

4. Originally on the Respondents No.1 to 3 herein, issuing a notice of dissolution of partnership arbitration proceedings were initiated. Initially in the said proceedings the Applicant herein along with late Jawahar Ashtarian had filed a counter claim in I.A. No. 5 of 2023 opposing the dissolution of the partnership firm. Thereafter the Respondents No.1 to 3 had sought to withdraw the proceedings, whereas Late. Jawahar Ashtarian had filed I. A. No. 6 of 2023 seeking to withdraw her counter-claim. While terminating the proceedings vide order dated 22.09.2023, learned arbitrator had adjudicated the counter claim of the Applicant in I.A. No. 5 of 2023 as the only surviving claim in the arbitration proceedings. The order in I.A. No. 5 of 2023 is to be treated as a part of the award dated 22.09.2023. It is of consequence to note the following observations made by the learned arbitrator:

i. Observations in I.A. No. 5 of 2023 dated 22.09.2023:

“23. In the present set of facts, there have been no dissolution or winding up proceedings, the appointment of the receiver cannot be made. Further, the reliefs claims in Para No. 5 – B, C, D of counterclaim are beyond the scope of the Arbitral Tribunal, as the Arbitrator is bound by the terms of the contract i.e., Deed of Reconstituted Partnership Deed. No relief could be granted for the want of jurisdiction. So far as relief in 5A in the counterclaim is concerned, the nature of relief also cannot be granted as the arbitration proceedings do not survive at this point of time.”

ii. Observations in the Arbitral Award dated 22.09.2023: “6. The said I.A. No. 5 of 2023 came to be rejected an elaborate order (ANNEXURE – II) which resulted in the dismissal of the counterclaim, mainly on the account of such application being not maintainable in law. The Tribunal has not expressed any opinion on the allegations with respect to the facts and no findings as such have been recorded.

7. Likewise, respondent No. 2 seeks adjudication of her counterclaim. The Tribunal recorded a finding that some of the reliefs claimed in the counterclaim are out of scope and powers of the Arbitral Tribunal. Further, the counterclaim of the nature would not survive independently when there is no dissolution. The detailed reasons are set out in the decision in I.A.No. 5 of 2023.

8. In other words, the rights of the respective parties whatever they may be preserved in all the respects more particularly the rights of the respondent No. 2 in the arbitration proceedings as the other partners are sailing together.”

5. It is the contention of the applicant herein that as against the findings on prayer ‘B’ in I.A. No. 5 of 2023, the applicants herein had filed a petition under Section 34 of the Act, 1996 in C.O.P.No. 87 of 2023. The applicants herein have also filed C.O.P. No. 82 of

2023 seeking appointment of receiver and C.O.P. No. 18 of 2024 seeking stay of further construction and expansion being undertaken by the Respondent No.1 & 3 herein before the Commercial Court, Hyderabad under Section 9 of the Act, 1996. It is contended that in C.O.P. No. 82 of