Case Note & Summary
The judgment concerns four applications filed under Section 11 of the Arbitration and Conciliation Act, 1996, by Priya Rishi Bhuta and another, who are the daughters and legal heirs of the deceased Amritlal Jain. The applicants sought reference of disputes to arbitration arising under partnership deeds with various respondent firms, including Vardhaman Engineers and Builders, Vardhaman Land Development Corporation, Pioneer Housing, and Pioneer Construction and Consultants. The facts are common across all applications, with the arbitration clause in each partnership deed being similar. The arbitration agreement, as contained in clause 19 of the deeds, states that during the continuance of the partnership or afterwards, if any difference arises among the parties or their executors, administrators, or heirs, such difference shall be referred to arbitration. The applicants invoked this clause, claiming that as legal heirs of the deceased partner, they are entitled to seek arbitration. The respondents opposed the applications, arguing that the applicants were not parties to the partnership deed and that the arbitration clause did not bind them. The Court analyzed the language of the arbitration clause and held that it expressly includes heirs, executors, and administrators. Therefore, the applicants, being the daughters and legal heirs of the deceased partner, are covered by the clause and are entitled to invoke arbitration. The Court allowed the applications and appointed an arbitrator to adjudicate the disputes.
Headnote
A) Arbitration Law - Appointment of Arbitrator - Section 11 of the Arbitration and Conciliation Act, 1996 - Legal Heirs of Deceased Partner - The applicants, daughters of a deceased partner, sought reference of disputes to arbitration under the partnership deed. The Court held that the arbitration clause is binding on the legal representatives of the deceased partner, and the applicants are entitled to invoke arbitration. (Paras 1-10)
B) Partnership Law - Arbitration Clause - Binding on Legal Representatives - The arbitration clause in the partnership deed provided for reference of differences among parties or their heirs. The Court held that the applicants, as legal heirs, are covered by the clause and can seek arbitration. (Paras 2-5)
Issue of Consideration
Whether the applicants, being the daughters and legal heirs of a deceased partner, can invoke the arbitration agreement contained in the partnership deed and seek reference of disputes to arbitration under Section 11 of the Arbitration and Conciliation Act, 1996.
Final Decision
The Court allowed the applications and appointed an arbitrator to adjudicate the disputes between the parties.
Law Points
- Arbitration agreement binding on legal heirs
- Section 11 of Arbitration and Conciliation Act
- 1996
- Partnership deed arbitration clause
- Legal representative can invoke arbitration
Case Details
2022 LawText (BOM) (06) 37
Arbitration Application No. 149 of 2021 with Commercial Arbitration Petition No. 410 of 2021 and connected matters
Mr. Sanjay Jain a/w. Mr. Nishant Sasidharan, Mr. Ashvin Bhalekar, Mr. Ashwin Bhadang, Ms. Shruti Lakhani and Ms. Khushbu Shah i/b. Dipti Shah for Applicants/Petitioners. Mr. Mayur Khandeparkar with Mr. Rajesh A. Revankar i/b. A.G. Revankar & Co. for respondent nos. 1, 5 to 10. Mr. Ankit Lohia with Mr. Chetan Yadav and Mr. Samarth Patel i/b. R. V & Co. for Respondent Nos.2 & 3.
Vardhaman Engineers and Builders & Ors. (and other respondents in connected matters)
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Nature of Litigation
Applications under Section 11 of the Arbitration and Conciliation Act, 1996 for reference of disputes to arbitration.
Remedy Sought
The applicants sought appointment of an arbitrator to adjudicate disputes arising under partnership deeds.
Filing Reason
Disputes arose between the applicants (legal heirs of deceased partner) and the respondents (partnership firms and other partners) regarding partnership matters.
Issues
Whether the applicants, being legal heirs of a deceased partner, can invoke the arbitration clause in the partnership deed.
Submissions/Arguments
Applicants argued that they are legal heirs of deceased partner Amritlal Jain and the arbitration clause covers heirs, executors, and administrators.
Respondents opposed, contending that applicants were not parties to the partnership deed and cannot invoke arbitration.
Ratio Decidendi
The arbitration clause in a partnership deed that expressly includes heirs, executors, and administrators is binding on the legal representatives of a deceased partner, and such legal representatives are entitled to invoke the arbitration agreement.
Judgment Excerpts
These are four applications filed under Section 11 of the Arbitration and Conciliation Act, 1996 whereby the applicants, who claim to be the daughters of deceased Amritlal Jain, who was a Partner in the partnership firm - respondent no.1 in each of these applications, are before the Court praying that the disputes and differences between the applicants and the respondents as arising under these partnership deeds be referred to arbitration.
The arbitration agreement as contained in clause 19 reads thus:- '19. During the continuance of the partnership or at any time afterwards, if any difference arises among the parties hereto or the executors or administrators or their heirs such difference shall be referred to arbitration.'
Procedural History
The applicants filed four applications under Section 11 of the Arbitration and Conciliation Act, 1996 seeking reference of disputes to arbitration. The respondents opposed the applications. The Court heard the matter and reserved judgment on 12 April 2022, pronouncing it on 6 June 2022.
Acts & Sections
- Arbitration and Conciliation Act, 1996: Section 11
