IAAP/37/2012

1/6

ORDER

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD PETN. UNDER ARBITRATION ACT No. 37 of 2012 ========================================================= SANJAY SHYAMSUNDAR SHUKLA - Petitioner(s) Versus VISHAL BHAVANBHAI PATEL - Respondent(s) =========================================================
Appearance : MR ISHAN MIHIR PATEL for Petitioner(s) : 1, MR PP MAJMUDAR for Respondent(s) : 1,

========================================================= CORAM : HONOURABLE MR.JUSTICE AKIL KURESHI

Date : 14/09/2012

ORAL ORDER

1. The petitioner seeks appointment of arbitrator to resolve the disputes between the petitioner and the respondent arising out of partnership

agreement dated 19.1.2005. Briefly stated facts are as follows :

2. Undisputedly entered 19.1.2005 into

the a

petitioner

and

the

respondent on

partnership the purpose of

agreement

for

development,

contractor and building construction work to be undertaken in the name and style and of Shyam of

Corporation.

Various

terms

conditions

such partnership including sharing of profit and loss were decided in such agreement. Clause 12 of the agreement provided that if any partner

desired to retire from the partnership, it could do so after giving notice of three months.

However, such retiring partner will not have any

PETN. UNDER ARBITRATION ACT/37/2012

12/02/2013 08:15:19 PM
1 of 6

IAAP/37/2012

2/6

ORDER

right of goodwill of the partnership. Clause 14 of the agreement pertained to arbitration and

provided that if any disputes arise between the partners out o the partnership agreement, instead of approaching the Court of law such disputes shall be resolved through arbitration.

3. Since

serious

disputes

surfaced

between

the

partners, the petitioner issued a notice dated 1.3.2012 to the respondent pointing out several issues of differences and urged that in view of such serious disputes, the partnership is

required to be dissolved. He also demanded the accounts of the partnership business. He called upon the respondent to agree to appointment of sole arbitrator to resolve such disputes.

4. In

response

to

such

notice,

the dated

respondent 16.3.2012

replied

under

communication

stating that on 15.10.2007 respondent had already dissolved the petitioner from the partnership.

The petitioner had never replied to such notice. No partnership now survives. The petitioner now cannot react after more than four years and seek appointment petitioner of filed arbitrator. the present Thereupon petition the

seeking

appointment of arbitrator through Court process.

5. I may also notice that the petitioner had moved an application under section 9 of the Arbitration and Conciliation Act, 1996 before City the Civil learned Court,

Additional

District

Judge,

PETN. UNDER ARBITRATION ACT/37/2012

12/02/2013 08:15:19 PM
2 of 6

IAAP/37/2012

3/6

ORDER

Ahmedabad, who had by his order dated 7.7.2012 rejected the same.

6. Learned counsel for the petitioner submitted that in terms of clear arbitration the parties, clause in the are

agreement

between

disputes

required to be referred for arbitration. Counsel submitted that the partnership was never

dissolved previously. The petitioner therefore, seeks dissolution of partnership, statements of account. Several other disputes have also

remained pending.

7. On the other hand learned counsel Shri Majmudar for the respondent submitted that the partnership stood dissolved upon issuance of notice dated

15.10.2007. The petitioner was already released from the partnership. Partnership was consisting only of two persons. With discharge of the

petitioner from the partnership, no partnership survives. For nearly five years thereafter, the petitioner took no steps. His claims are

therefore, clearly barred by limitation.

8. In view of the arbitration clause contained in the agreement, in sole the question required is to be

considered request of

present

petition for

whether of

the

petitioner

appointment

arbitrator should be rejected on the groiund that claims are hopelessly barred by limitation. In this respect, sole contention of the respondent is that partnership stood dissolved upon issuance
PETN. UNDER ARBITRATION ACT/37/2012 12/02/2013 08:15:19 PM
3 of 6

IAAP/37/2012

4/6

ORDER

of

notice

dated

15.10.2007. being

According a

to

the at

respondent

partnership

partnership

will, upon the release of the petitioner from the partnership business, same stood dissolved.

9. From the various terms of the agreement I do not find any direct reference to the right of one partner to discharge another partner from

partnership. In the notice dated 15.10.2007, the respondent conveyed to the petitioner that he is discharged from the partnership. Under which

terms of the partnership agreement, same is done is not clear. According to the petitioner, such attempt was wholly illegal and would not bring about the petitioner's I is further at will discharge find in that the from though notice the the dated

partnership. partnership

15.10.2007 the respondent has nowhere stated in precise terms that he wishes to dissolve the

partnership.

10.Under the circumstances, question of limitation would depend on the exact effect of the

respondents notice dated 15.10.2007. Such issue therefore, is not one which would clearly reveal that the petitioner is trying to raise long time barred claim.

11.Under the circumstances, I am of the opinion that arbitration dismissed claims at petition the is not on required the to be of

threshold by

ground The

being

barred

limitation.

Apex

PETN. UNDER ARBITRATION ACT/37/2012

12/02/2013 08:15:19 PM
4 of 6

IAAP/37/2012

5/6

ORDER

Court in case of SBP & Co. v. Patel Engineering Ltd. and another reported in (2005) 8 Supreme Court Cases 618, while laying down the exact rule for the Chief whether Justice the or his designate of in

deciding

appointment

arbitrator

should be made or not, provided as under : 39. It is necessary to define what exactly the Chief Justice, approached with an application under Section 11 of the Act, is to decide at that stage. Obviously, he has to decide his own jurisdiction in the sense whether the party making the motion has approached the right High Court. He has to decide whether there is an arbitration agreement, as defined in the Act and whether the person who has made the request before him, is a party to such an agreement. It is necessary to indicate that he can also decide the question whether the claim was a dead one; or a long-barred claim that was sought to be resurrected and whether the parties have concluded the transaction by recording satisfaction of their mutual rights and obligations or by receiving the final payment without objection. It may not be possible at that stage, to decide whether a live claim made, is one which comes within the purview of the arbitration clause. It will be appropriate to leave that question to be decided by the Arbitral Tribunal on taking evidence, along with the merits of the claims involved in the arbitration. The Chief Justice has to decide whether the applicant has satisfied the conditions for appointing an arbitrator under Section 11(6) of the Act. For the purpose of taking a decision on these aspects, the Chief Justice can either proceed on the basis of affidavits and the documents produced or take such evidence or get such evidence in the context of the Act would best serve the purpose sought to be achieved by the Act of expediting the process of arbitration, without too many approaches to the court at

PETN. UNDER ARBITRATION ACT/37/2012

12/02/2013 08:15:19 PM
5 of 6

IAAP/37/2012

6/6

ORDER

various stages of the proceedings before the Arbitral Tribunal. 12.In the present case, while requesting Shri M.S. Parikh (retired Judge of this Court) to act as a

sole arbitrator to resolve the disputes between the parties, all questions including the question whether whether the partnership are stood dissolved barred and by

claims

therefore,

limitation are kept open.

13.Petition is disposed of accordingly.

(Akil Kureshi,J.) (raghu)

PETN. UNDER ARBITRATION ACT/37/2012

12/02/2013 08:15:19 PM
6 of 6