Allahabad High Court
Shri Basant Lal vs Shri Hari Om on 27 May, 2022
Bench: Manoj Kumar Gupta
HIGH COURT OF JUDICATURE AT ALLAHABAD
?Court No. - 21
Case :- ARBITRATION AND CONCILI. APPL.U/S11(4) No. - 10 of 2021
Applicant :- Shri Basant Lal
Opposite Party :- Shri Hari Om
Counsel for Applicant :- Sudeep Harkauli
Counsel for Opposite Party :- Udayan Nandan
Hon'ble Manoj Kumar Gupta,J.
Heard Sri Sudeep Harkauli for the applicant and Sri Udayan Nandan for the respondent opposite party.
The instant application has been filed under Section 11(4), read with Section 11(6) of the Arbitration and Conciliation Act, 1996 for appointment of an arbitrator to resolve the disputes that have arisen between the parties in pursuance of a partnership agreement dated 1.4.2009.
The partnership deed dated 1.4.2009 is not in dispute. Clause 9 thereof reads as follows: -
"That in case any dispute arises amongst the partners on any matter, whether during the continuance of the firm, or on its dissolution, the same shall be referred to an Arbitrator, and the provisions of the Arbitration & Conciliation Act, 1996, shall apply accordingly."
The specific case of the applicant is that on account of the disputes having arisen between the parties, the applicant sent a notice on 31.8.2020 to the opposite party, with a request to appoint an arbitrator, but it was not replied to and consequently the instant application has been filed.
On 16.2.2022, this Court adjourned the matter so as to enable the counsel to take instructions from their clients as to whether they are ready and willing to settle their disputes before the Mediation and Conciliation Centre of this Court.
Learned counsel for the opposite party at the very outset states that the opposite party is not ready to approach the Mediation and Conciliation Centre. Consequently, the Court proceeds to decide the application on merits.
Sri Udayan Nandan, learned counsel appearing on behalf of the opposite party, submitted that the partnership agreement dated 1.4.2009 stood superseded by a fresh partnership agreement dated 1.4.2013 and in Clause 14 thereof, it is specifically provided that the provisions of the Arbitration and Conciliation Act, 1996 shall not apply. Accordingly, he submitted that the matter cannot be referred to the Arbitral Tribunal.
In rebuttal, learned counsel for the applicant has invited the attention of this Court towards the pleadings in the rejoinder affidavit, wherein the specific case of the applicant is that the document filed as partnership deed dated 1.4.2013, is a forged and fabricated one and it is also specifically pleaded that the applicant had never signed the same. It is also alleged that on a close examination of the signature of the applicant with the signatures on the deed of the year 2009, the forgery would become apparent. On the other hand, Sri Udayan Nandan tried to impress upon the Court that if the two deeds are compared, it would be evident that both the deeds were signed by the applicant.
Having heard counsel for the parties, I am of the opinion that since the mechanism of settling the dispute through arbitration, as contemplated under the original partnership deed, is not in dispute, therefore, the issue as to whether the original partnership deed stands superseded or there is novation of contract, as well as the issue whether the subsequent deed bears the signatures of the applicant or not, are matters which have to be raised before the Arbitral Tribunal under Section 16 of the Act.
In Duro Felguera, S.A. vs. Gangavaram Port Ltd., 2017 (9) SCC 729, the Supreme Court after taking into consideration the amendment brought about in 2015, particularly Section 11 (6-A) held that the court is only required to see as to whether an arbitration agreement exists - nothing more, nothing less. The legislative policy and purpose is essentially to minimize the Court's intervention at the stage of appointing the arbitrator and this intention as incorporated in Section 11(6-A) ought to be respected. The relevant portion from the said judgment is extracted below: -
"48. Section 11(6-A) added by the 2015 Amendment, reads as follows:
"11. (6-A) The Supreme Court or, as the case may be, the High Court, while considering any application under sub-section (4) or sub-section (5) or sub-section (6), shall, notwithstanding any judgment, decree or order of any court, confine to the examination of the existence of an arbitration agreement."
From a reading of Section 11(6-A), the intention of the legislature is crystal clear i.e. the court should and need only look into one aspect?the existence of an arbitration agreement. What are the factors for deciding as to whether there is an arbitration agreement is the next question. The resolution to that is simple?it needs to be seen if the agreement contains a clause which provides for arbitration pertaining to the disputes which have arisen between the parties to the agreement.
59. The scope of the power under Section 11(6) of the 1996 Act was considerably wide in view of the decisions in SBP and Co. v. Patel Engg. Ltd., (2005) 8 SCC 618 and National Insurance Co. Ltd. v. Boghara Polyfab (P) Ltd., (2009) 1 SCC 267 : (2009) 1 SCC (Civ) 117. This position continued till the amendment brought about in 2015. After the amendment, all that the courts need to see is whether an arbitration agreement exists?nothing more, nothing less. The legislative policy and purpose is essentially to minimise the Court's intervention at the stage of appointing the arbitrator and this intention as incorporated in Section 11(6-A) ought to be respected."
In the instant case, since it is admitted that original partnership deed contained arbitration clause, while the very existence of subsequent partnership deed is in dispute, therefore, in my opinion, the matter deserves to be referred to the arbitrator in terms of the original partnership deed. It will be open to the opposite party to raise all its defence, including the competence of the Arbitral Tribunal to enter into arbitration based on the plea that there had been novation of contract and supersession of the earlier clause in the partnership deed by a new partnership deed.
Accordingly, this Court proposes the name of Sri Aditya Nath Mittal, Retired Judge of this Court, for being appointed as Arbitrator. His address is R/o M-8/A, Mahavir Park, Aligarh, U.P. 202001, Email ID [email protected] and mobile numbers are 8004928570 & 7376003340.
Let the consent of Sri Aditya Nath Mittal be obtained by the office in terms of the provisions contained in Section 11(8), read with Section 12(1) of the Act by sending a letter to him.
The main matter stands disposed of. In case, the proposed arbitrator does not give his consent or the disclosures in terms of sub-section (1) of Section 12, the application will be listed before the Court for the limited purposes of proposing name of alternate arbitrator.
(Manoj Kumar Gupta, J.)
Order Date :- 27.5.2022
Jaideep/-
