TARUN DHAMEJA versus SUNIL DHAMEJA & ANR.

TARUN DHAMEJA versus SUNIL DHAMEJA & ANR.

The arbitration clause in clause 23 of the partnership deed is not non-existent nor rendered unenforceable by language stating arbitration shall be optional; legal representatives or persons claiming through a partner can invoke the arbitration clause; although mutual consent is the mode for appointing an arbitrator, lack of agreement does not nullify the clause because the court/appointed arbitration centre can appoint an arbitrator under the A&C Act; accordingly the High Court order dismissing the Section 11(6) petition was set aside and the petition is allowed.

Parties
Appellant; Legal Representative of Deceased Partner Yeshwant Boolani: Tarun Dhameja; Respondent: Sunil Dhameja & Anr.
Jurisdiction
India
Judgment Date
06 December 2024
Procedural Posture
Civil Appeal / Appeal to Supreme Court; Judgment on Petition Under Section 11(6) of the Arbitration and Conciliation Act, 1996
Outcome
Appeal allowed; impugned High Court judgment set aside; Section 11(6) petition treated as allowed
Legal Topics
Interpretation of Arbitration Clause, Pragmatic Construction, Existence of Arbitration Clause, Mutual Consent, Appointment of Arbitrator, Appointment of Arbitral Tribunal
Arbitration and Conciliation Act, 1996 Partnership Law Interpretation of Arbitration Clause Pragmatic Construction Existence of Arbitration Clause Mutual Consent Appointment of Arbitrator Appointment of Arbitral Tribunal

Case Brief

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Parties

Tarun Dhameja

Appellant; Legal Representative of Deceased Partner Yeshwant Boolani

Sunil Dhameja & Anr.

Respondent

Procedural Posture

Civil Appeal / Appeal to Supreme Court; Judgment on Petition Under Section 11(6) of the Arbitration and Conciliation Act, 1996

Legal Issues

  1. 1 Whether the arbitration clause in the partnership deed is non-existent or requires agreement of all parties to refer the dispute to arbitration
  2. 2 Whether legal representatives or those claiming through a partner can invoke the arbitration clause and how an arbitrator is to be appointed if parties do not agree

Ratio Decidendi

The arbitration clause in clause 23 of the partnership deed is not non-existent nor rendered unenforceable by language stating arbitration shall be optional; legal representatives or persons claiming through a partner can invoke the arbitration clause; although mutual consent is the mode for appointing an arbitrator, lack of agreement does not nullify the clause because the court/appointed arbitration centre can appoint an arbitrator under the A&C Act; accordingly the High Court order dismissing the Section 11(6) petition was set aside and the petition is allowed.

Court Disposition

Appeal allowed; impugned High Court judgment set aside; Section 11(6) petition treated as allowed

Orders

  • Impugned judgment dated 31.05.2024 of the High Court of Madhya Pradesh at Indore set aside
  • Petition under Section 11(6) of the Arbitration and Conciliation Act, 1996, filed by the appellant is allowed