Case Note & Summary
The applicants, partners of a dissolved partnership firm, filed an application under Section 11(6) of the Arbitration and Conciliation Act, 1996 seeking appointment of an arbitrator. The partnership deed dated 15th January 1979, as modified, contained an arbitration clause (Clause 17) for resolution of disputes. After dissolution of the firm on 29th August 2003, the applicants appointed Mr. Shailesh Shah as sole arbitrator. The respondents objected, and Mr. Shah declined to act. The applicants then filed Arbitration Application No. 207 of 2008 before the Bombay High Court. The court considered whether it could appoint an arbitrator under Section 11(6) when the earlier appointee had declined. The court held that the arbitration clause survives dissolution and that the court has jurisdiction to appoint an arbitrator when parties fail to agree. The court allowed the application and appointed a sole arbitrator to adjudicate the disputes.
Headnote
A) Arbitration Law - Appointment of Arbitrator - Section 11(6) of the Arbitration and Conciliation Act, 1996 - Court's Power to Appoint - Where the earlier appointed arbitrator declined to act due to objections from respondents, the court has jurisdiction to appoint a substitute arbitrator under Section 11(6) - Held that the arbitration clause in the partnership deed survives dissolution and the court can appoint an arbitrator when the parties fail to agree (Paras 1-10).
Issue of Consideration
Whether the court can appoint an arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996 when the earlier appointed arbitrator declined to act due to lack of consent from all parties.
Final Decision
The court allowed the application and appointed a sole arbitrator to adjudicate the disputes between the parties.
Law Points
- Section 11(6) of the Arbitration and Conciliation Act
- 1996
- Appointment of arbitrator
- Partnership deed arbitration clause
- Consent of parties
- Substitution of arbitrator
Case Details
2013 LawText (BOM) (12) 86
Arbitration Application No. 207 of 2008
Dr. Milind Sathe, Sr. Advocate along with Mr. Chetan Kapadia, Mr. S.K. Srivastva, Ms. Simeen Shaikh i/by S.K. Srivastav & Co. for the applicants; Mr. R.V. Govilkar alongwith Mr. B. Pawar for respondent no. 5
Arjandas Teckchand Kashyap and Ors.
Smt. Pooja Jaiprakash Pamnani and Ors.
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Nature of Litigation
Application under Section 11(6) of the Arbitration and Conciliation Act, 1996 for appointment of an arbitrator in a partnership dispute.
Remedy Sought
The applicants sought appointment of an arbitrator to adjudicate disputes arising from the dissolution of the partnership firm.
Filing Reason
The earlier appointed arbitrator declined to act due to objections from the respondents regarding lack of consent.
Previous Decisions
An earlier arbitration petition (No. 266 of 2003) resulted in appointment of Mr. Shailesh Shah as sole arbitrator on 20th February 2004, but he declined to act.
Issues
Whether the court can appoint an arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996 when the earlier appointed arbitrator declined to act due to lack of consent from all parties.
Submissions/Arguments
Applicants argued that the arbitration clause in the partnership deed survives dissolution and that the court should appoint an arbitrator.
Respondents opposed the appointment on the ground that the earlier appointment was not by consent.
Ratio Decidendi
The arbitration clause in a partnership deed survives dissolution of the firm. Under Section 11(6) of the Arbitration and Conciliation Act, 1996, the court has jurisdiction to appoint an arbitrator when the parties fail to agree on an appointment, including when the earlier appointed arbitrator declines to act.
Judgment Excerpts
By this application filed under section 11(6) of the Arbitration & Conciliation Act, 1996 the applicant seeks appointment of an arbitrator.
Some of the facts relevant for the purpose of deciding this application are as under :
Procedural History
The applicants filed Arbitration Petition No. 266 of 2003 before the Chief Justice for appointment of arbitrator. On 20th February 2004, the designate of the Chief Justice appointed Mr. Shailesh Shah as sole arbitrator. The respondents objected, and Mr. Shah declined to act. The applicants then filed the present Arbitration Application No. 207 of 2008.
Acts & Sections
- Arbitration and Conciliation Act, 1996: Section 11(6)
