Sockalingam Chetty V. Gunawardene

Present : The Hon. Mr. J. P. Middleton, Acting Chief Justice,
and Mr. Justice Pereira.

SOCKALINGAM CHETTY v. GUNAWARDENE et al.

D. C, Colombo, 29,796.

    Partnership deed-Arbitration clause-Action for dissolution-Appointment of receiver.

The arbitration clause in a deed of partnership provided that if at any time during the partnership any dispute, doubt, or question should arise among the partners or their representatives on the construction of the partnership deed, or respecting the accounts, transactions, losses, or profits of the business, then such dispute, &c, was to be referred to the arbitration of two disinterested persons, one to be named by each party in dispute, &c.

Held, that such a clause does not enable a question of dissolution of partnership to be referred to arbitration.

Even where a Court has referred a question of dissolution to arbitration, it has the power to appoint a receiver.

THE plaintiff sued the defendants for the dissolution of the partnership existing between him and the defendants. The 13th clause of the partnership deed was as follows: " That if at any time during the partnership any dispute, doubt, or question shall arise among the said partners or any of them or their or any of their legal representatives, either in the construction of these presents, or respecting the accounts, transactions, losses, or profits of the said business, then every such dispute, doubt, or question shall be referred to the arbitration of two disinterested persons, one to be named by each party in dispute, or in case either of the parties in dispute shall upon the request of the other refuse or neglect to join in such nomination, then both of the said arbitrators to be named by the other, and in case any such arbitrator shall not agree upon an award, then the dispute, doubt, or question shall stand referred to the arbitration of such one person as the two arbitrators shall before they proceed in the reference appoint as their umpire, and the award or determination which shall be made by the umpire shall be final and conclusive on the parties respectively and their respective legal representatives, and it is hereby agreed that this submission to reference shall be made a judgment of the Court in terms of the Ceylon Procedure Code on the application of any of the parties to the reference."

The reasons stated in the plaint for the dissolution were, inter alia, the following: -

" It has become impossible to carry on the said business in partnership with advantage to the parties owing to the following among other reasons: The defendants have been unfaithful to the

plaintiff in matters connected with the business, and have been careless in the discharge of their duties, and have misappropriated  various sums of money belonging to the partnership, and have without lawful excuse removed from the office the press copy book belonging to the partnership business, and have refused to make and subscribe to a full and correct statement of accounts of all the credits and effects due, owing, and belonging to the partnership, and have been trading in the name of the firm for their private gain, and have not brought into the partnership the profits gained thereby."

The plaintiff applied to the Court that a receiver be appointed pending the action. The defendants opposed, on the ground that the matters in dispute should be referred to arbitration under the arbitration clause.

The learned District Judge declined to appoint a receiver and stayed proceedings in the action, as he thought that the matters in dispute ought to be referred to arbitration under the arbitration clause.

The plaintiff appealed.

Sampayo, K. C. (with Balasingham), for the appellant.-The defendants did not move that the case be referred to arbitration, though they opposed the application for the appointment of the receiver, on the ground that the arbitration clause

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