Case Note & Summary
The Bombay High Court heard two cross-petitions filed under Section 34 of the Arbitration and Conciliation Act, 1996, arising from an arbitral award dated 17 April 2012. The dispute centred on the ownership of the name, goodwill, and trademarks (particularly 'LG' and 'LG Engine') of the partnership firm Messrs. Laljee Godhoo & Co., which carried on the business of manufacturing and trading asafoetida (hing). The claimants, Mrs. Veena Nalin Merchant (widow of late Nalin Khimjee Merchant) and Ms. Gayatri Nalin Merchant (daughter), asserted rights to these assets as successors to Nalin Khimjee Merchant, while the respondents, comprising the firm and its partners, contested these claims. The factual background traced a complex history of partnership deeds from 1929 to 2003, trusts, and assignments. Originally, the trademarks were registered in the name of Jevabai Khimjee in 1949. She bequeathed her rights equally to her sons Nalin Khimjee Merchant and Ajit Khimjee Merchant by will dated 10 February 1982. Upon her retirement from the firm, a new partnership was constituted, and she became entitled to the assets. Later, the assets were assigned to trustees of the Laljee Godhoo Family Trust for beneficiaries including the claimant no.1. The trust was revoked in 2003, transferring ownership to Veena N. Merchant and Bimal A. Merchant equally. Subsequently, they assigned their rights to Nalin Merchant and Jyoti Merchant. The partnership deed of 14 June 2003, which reconstituted the firm, contained crucial clauses—particularly Clause 6—which explicitly provided that the ownership of the name, goodwill, trademarks, etc., exclusively belonged to Nalin and Jyoti, and these assets were not to be considered partnership assets. Clauses 17, 18, and 19 further dealt with the consequences of death or retirement of partners and dissolution, reaffirming the exclusion of these assets from partnership accounts. The petitions sought to set aside parts of the arbitral award that were adverse to each side. By consent, both petitions were heard together and disposed of by a common judgment. The available text of the judgment does not include the court's reasoning or the final decision; thus, the specific legal issues argued, the submissions of the parties, the court's analysis, and the ultimate outcome remain unknown.
Issue of Consideration
ARBITRATION PETITION NO.939 OF 2012
Law Points
- Challenge to arbitral award under Section 34 of the Arbitration and Conciliation Act
- 1996
Case Details
2015 LawText (BOM) (05) 40
Arbitration Petition No.939 of 2012 along with Arbitration Petition No.791 of 2012
Dr. Virendra Tulzapurkar, Senior Advocate for petitioners in Arb. Petn. No.939/2012 and for respondents in Arb. Petn.791/2012; Mr. Pradeep Sancheti, Senior Advocate for petitioners in Arb. Petn.791/2012 and for respondents in Arb. Petn. No.939/2012
Mrs. Veena Nalin Merchant & Ms. Gayatri Nalin Merchant (in Arbitration Petition No.939 of 2012) and Messrs. Laljee Godhoo & Co. & Ors. (in Arbitration Petition No.791 of 2012)
Messrs. Laljee Godhoo & Co. & Ors. (in Arbitration Petition No.939 of 2012) and Mrs. Veena Nalin Merchant & Ms. Gayatri Nalin Merchant (in Arbitration Petition No.791 of 2012)
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Nature of Litigation
Challenge to arbitral award under Section 34 of the Arbitration and Conciliation Act, 1996
Remedy Sought
To set aside parts of the arbitral award dated 17 April 2012 that were adverse to the respective petitioners
Filing Reason
Aggrieved by part of the arbitral award
Judgment Excerpts
By these two petitions filed under Section 34 of the Arbitration and Conciliation Act, 1996 (for short “the said Arbitration Act), the petitioners have impugned part of the arbitral award dated 17 th April 2012 passed by the learned arbitrator which is adverse against the respective petitioners.
6. IT IS HEREBY EXPRESSLY AGREED AND DECLARED by and between the parties hereto that the ownership of the rights in the following assets of the partnership namely the name, goodwill, trademarks, labels etc. of Messrs. Laljee Godhoo & Co., shall solely exclusively and absolutely belong to the said Nalin and the said Jyoti, the parties of the First and Third Part. It is hereby further expressly agreed and declared that during the subsistence of the partnership or on determination of partnership for any reason whatsoever, the aforesaid assets viz., name, goodwill, trademarks, labels etc. shall not be taken into account or in consideration when making up the accounts of the partnership. These assets shall not be considered as assets of the partnership.
17. The death or retirement or adjudication as insolvent of any partner shall not dissolve the partnership and the remaining partners shall be entitled to continue the said business and may continue the same. The heirs and legal representatives of the such deceased partner shall have merely the right to receive the amount if any which and the share in profits, if any, upto the date of his/her demise, unless the other remaining partners shall agree to the heirs and legal representatives being taken up as partner(s) in the partnership in the place of such dying partner and on such terms and conditions as may be mutually agreed between the partners and the heirs and legal representatives.
18. Upon the determination of the partnership for any reason whatsoever a full and general account shall be taken of the assets (excluding the assets which are mentioned in clause 6 hereof) credits, debts and liabilities of the partnership and of the transactions and dealings thereof and with all convenient dispatch such assets and credits shall, if necessary, be valued or be sold, realised and got in and the proceeds applied in paying and discharging such debts and liabilities and expenses of and incidental to the partnership and the winding up of the partnership affairs and subject thereto in paying each partner any unpaid profits which may be due to him/her and his/her share of the capital and interest and the balance (if any) of such proceeds shall be divided between the partners in proportion to their respective shares in the partnership as mentioned in clause 5 (five) above and freed from all uses and the partners respectively shall execute do or concur in all necessary or proper instruments acts matters and things for effecting or facilitating the sale realising and getting in of the partnership assets and credits and due application and division of the proceeds thereof and for their mutual release or indemnity or otherwise and it is agreed that such account shall be made up and payment shall be made within two months from the date of the dissolution.
19. Upon the retirement or removal of any partner from the partnership a full and general account shall be taken of the assets, credits, debts and liabilities of the partnership (but excluding the assets which belong to the said Nalin and Jyoti jointly and which are mentioned in clause 6 (six) above) and of the transactions and the dealings thereof and with all convenient dispatch the valuations of such assets as are belonging to the partnership, and credits and debts and liabilities shall be made till the time of the retirement or removal of such partner and also of the
Procedural History
The two petitions were filed under Section 34 of the Arbitration and Conciliation Act, 1996, challenging parts of the arbitral award dated 17 April 2012. By consent of the parties, both petitions were heard together and disposed of by a common judgment.
Acts & Sections
- Arbitration and Conciliation Act, 1996: 34
- Indian Partnership Act, 1932:
