Madras High Court
V. Dinesh Prasad vs K.B.Prabhu on 7 December, 2021
Arb.O.P.(Comm.Div).No.169 of 2021
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Dated: 07.12.2021
Coram:
THE HONOURABLE MR. JUSTICE SENTHILKUMAR RAMAMOORTHY
Arbitration Original Petition (Comm.Div).No.169 of 2021
V. Dinesh Prasad,
S/o.Velusamy,
Partner M/s.Hotel Royal Castle Inn,
D.No.26A, BKR Nagar,
Gandhipuram, Coimbatore. ... Petitioner
/versus/
K.B.Prabhu,
S/o.C.Balasubramanian,
Partner M/s.Hotel Royal Castle Inn,
No.145, 7th Street Extension,
Gandhipuram, Coimbatore. ... Respondent
Prayer: This Arbitration Original Petition is filed under Section 11(5) of the
Arbitration and Conciliation Act, 1996, praying to appoint an impartial and
independent Arbitrator in terms of clause 17 of the Deed of Partnership dated
27.08.2010, between the petitioner and the respondent and to direct the respondent
to pay the costs of this petition.
For Petitioner : Mr.P.Saravana Sowmiyan
For Respondent : Mr.A.Thiyagarajan
Page 1 of 6
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Comm.Div).No.169 of 2021
ORDER
The petitioner seeks appointment of an arbitrator in terms of clause 17 of the
Partnership Deed dated 27.08.2010 between the petitioner and the respondent.
2. The petitioner states that a dispute arose between the petitioner and the
respondent with regard to the affairs of the partnership firm, which carried on
business under the name and style of M/s.Hotel Royal Castle Inn. By notice dated
16.10.2020, the respondent invoked the arbitration clause and called upon the
petitioner to consent to the proposed appointment of a retired District Judge as a
sole arbitrator. By a subsequent notice dated 30.12.2020, the respondent proposed
the name of a different retired District Judge in view of the death of the person
whose name was proposed earlier. The petitioner states that he sent a reply dated
08.07.2021 objecting to the unilateral appointment of a sole arbitrator.
3. Meanwhile, it appears that the sole arbitrator proposed by the respondent
entered upon reference and scheduled the first hearing on 31.05.2021. The
petitioner asserts that he objected to the conduct of proceedings by the sole
arbitrator and, in fact, filed a petition under Section 16 of the Arbitration and
Conciliation Act 1996 (the Arbitration Act) before such arbitrator. The present
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Comm.Div).No.169 of 2021
petition is filed under these facts and circumstances.
4. Learned counsel for the petitioner relies on the judgment of the Hon'ble
Supreme Court in Perkins Eastman Architects DPC and another -vs- HSCC
(India) Ltd reported in 2019 SCC Online SC 1517 and contends that the Hon'ble
Supreme Court frowned upon such unilateral appointments. He further contends
that he had objected to the conduct of proceedings by the sole arbitrator and even
preferred a petition under Section 16 of the Arbitration Act in respect thereof.
5. The respondent refutes the above contentions. He submits that he had
duly issued a notice to the petitioner on 30.12.2020 with regard to the proposed
appointment of the sole arbitrator. In spite of receiving notice, it is stated that the
petitioner herein did not reply to the same. The respondent further contends that
the sole arbitrator entered upon reference and conducted about 16 hearings.
Therefore, it is stated that the petitioner acquiesced in the conduct of arbitration
proceedings and impliedly waived his right to object to the constitution of the
arbitral tribunal.
6. Pursuant to the notice dated 30.12.2020, it appears that the statement of
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Comm.Div).No.169 of 2021
claim was filed by the respondent. Shortly thereafter, by communication dated
08.07.2021, the petitioner has stated categorically that he has not consented to the
appointment of the arbitrator. In light of the said communication, it cannot be said
that the petitioner herein acquiesced in the conduct of arbitration proceedings by
the sole arbitrator or waived his right in such regard.
7. As correctly contended by learned counsel for the petitioner, a petition
under Section 11 of the Arbitration and Conciliation Act is maintainable if one
party to the arbitration agreement makes an unilateral appointment in
contravention of the arbitration agreement. Although learned counsel for the
respondent points out that the petitioner herein appeared before the arbitral
tribunal and even filed a vakalatnama through counsel, an inference of waiver or
acquiescence cannot be drawn on such basis in light of the communication dated
08.07.2021, and the submission that a petition was filed under Section 16 of the
Arbitration Act subsequently.
8. In the above facts and circumstances, the present petition is liable to
allowed. Accordingly, T.Balakrishnan retired District Judge, No.1/103, Vasantha
Nagar Extension, Somarasampettai, Tiruchirappalli 620102 (Mobile
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Comm.Div).No.169 of 2021
No.9443174737) is hereby appointed as the sole arbitrator to adjudicate the
dispute between the parties. The sole arbitrator is directed to enter upon reference
and fix his fees and expenses in accordance with law. As a corollary to the above
conclusion, it is recorded that the mandate of the present sole arbitrator stands
terminated. It is open to the respondent herein to include amounts paid as fees to
the present sole arbitrator in his cost claim in the arbitral proceedings.
07.12.2021
Index : No.
Internet : Yes.
bsm
SENTHILKUMAR RAMAMOORTHY,J.
https://www.mhc.tn.gov.in/judis
Arb.O.P.(Comm.Div).No.169 of 2021
bsm
Arb.O.P.(Comm.Div).No.169 of 2021
07.12.2021
https://www.mhc.tn.gov.in/judis
