Madras High Court

Mr.R.Vedagiri vs Mrs.K.Rajakumari on 5 April, 2022

                                                                         Arb.O.P (Com.Div.) No.313 of 2021

                                    IN THE HIGH COURT OF JUDICATURE AT MADRAS

                                                    DATED : 05.04.2022

                                                          CORAM

                                        THE HON'BLE MR. JUSTICE M.SUNDAR

                                             Arb.O.P (Com.Div.) No.313 of 2021

                     Mr.R.Vedagiri
                     Son of Mr.Ramakrishnan
                     3rd Partner of M/s.Prashant Enterprises
                     Having office at No.3 and 4, First Floor
                     Mogappair Road, Padi, Chennai - 600 050
                     and residing at No.21/34
                     Shanthi Nagar, Korattur
                     Chennai - 600 080                                           ... Petitioner
                                                   Vs.

                     1. Mrs.K.Rajakumari
                        1st Partner
                        M/s.Prashant Enterprises
                        No.3 and 4, First Floor
                        Mogappair Road, Padi, Chennai - 600 050

                     2. Mr.M.Kandasamy
                        2nd Partner
                        M/s.Prashant Enterprises
                        No.3 and 4, First Floor
                        Mogappair Road, Padi, Chennai - 600 050                  ... Respondents

                                  Arbitration Original Petition filed under Section 11(6) of the
                     Arbitration and Conciliation Act, 1996 to adjudicate upon the differences


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                                                                           Arb.O.P (Com.Div.) No.313 of 2021

                     and disputes between the parties hereto as per the Partnership Deed dated
                     11.07.2016.
                                              For Petitioner : Mr.D.Parthasarathy
                                              For Respondents: Ms.R.Roshini
                                                               for Mr.Rohan Rajasekaran


                                                          ORDER

This order will now dispose of the captioned 'Arbitration Original

Petition' (hereinafter 'Arb OP' for the sake of brevity) which is presented in

this Court on 14.12.2021 under Section 11 of 'The Arbitration and

Conciliation Act, 1996 (Act No.26 of 1996)' [hereinafter 'A and C Act' for

the sake of convenience and clarity] with a prayer for appointment of an

Arbitrator.

2. Mr.D.Parthasarathy, learned counsel for sole petitioner and

Ms.R.Roshini, learned counsel representing Mr.Rohan Rajasekaran, learned

counsel for both the respondents in the captioned Arb.OP are before this

Court.

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3. Read this in conjunction with and in continuation of earlier

proceedings made by Hon'ble predecessor Judge on 03.01.2022 followed by

proceedings made in the listing on 19.01.2022 and my proceedings dated

28.03.2022, which read as follows:

'Proceedings dated 03.01.2022 Issue notice to the respondents returnable on 19.01.2022. Private notice is also permitted.

2. List the matter on 19.01.2022.' 'Proceedings dated 19.01.2022 Mr.Rohan Rajasekaran, learned counsel enters appearance on behalf of the respondents and seeks time to file a counter. List the matter in the 2nd week of February 2022.' 'Proceedings dated 28.03.2022 Ms.N.Gomathi, learned counsel for sole petitioner and Mr.Rohan Rajasekaran, learned counsel for two respondents are before this Court.

2. Captioned Arb OP is under Section 11 of 'The Arbitration and Conciliation Act, 1996 (Act No.26 of 1996)' [hereinafter 'A and C Act' for the sake of brevity, convenience and clarity] and the prayer talks about partnership deed dated 11.07.2016 but the partnership deed has not been placed before this Court as part of the case file.

3. Mr.Rohan Rajasekaran, learned counsel for respondents

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submits that this partnership deed has been subsequently amended twice over on 16.07.2016 and 01.04.2019. To be noted, 16.07.2016 partnership deed alone has been placed before this Court as part of case file, qua typed-set of papers.

4. Faced with the above situation, learned counsel for petitioner requests for time to do her home work, acquaint herself with the facts get further instructions (if any) and come before this Court

5. List after one week. List on 05.04.2022.'

4. The aforesaid proceedings are telltale qua the trajectory the matter

has taken thus far in this Court. Disposal of captioned Arb OP has become

fairly simple as, though the respondents have filed a counter affidavit,

learned counsel for respondents today very fairly submits that respondents

do not dispute the existence of arbitration agreement. Obviously the claims

are disputed and that will be subject matter of arbitration. The scope of a

legal drill under Section 11 of A and C Act is within the limited legal

perimeter of examining the existence of an arbitration agreement and this

principle was laid down by Hon'ble Supreme Court in oft-quoted Mayavati

Trading case law [Mayavati Trading Private Limited Vs. Pradyuat Deb

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Burman reported in (2019) 8 SCC 714], most relevant paragraph in

Mayavati Trading case law is paragraph 10, which reads as follows:

'10. This being the position, it is clear that the law prior to the 2015 Amendment that has been laid down by this Court, which would have included going into whether accord and satisfaction has taken place, has now been legislatively overruled. This being the position, it is difficult to agree with the reasoning contained in the aforesaid judgments, as Section 11(6-

A) is confined to the examination of the existence of an arbitration agreement and is to be understood in the narrow sense as has been laid down in the judgment in Duro Felguera SA.' (underlining made by this Court to supply emphasis and highlight)

5. Aforementioned paragraph 10 of Mayavati Trading case law takes

this Court to Duro Felguera principle [Duro Felguera, S.A. versus

Gangavaram Port Limited reported in (2017) 9 SCC 729]. To be noted,

most relevant Paragraphs in Duro Felguera case law are paragraphs 47 and

59, which read as follows:

'47. What is the effects of the change introduced by the Arbitration and Conciliation (Amendment) Act, 2015 (hereinafter

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referred to as 'the 2015 Amendment' ) with particular reference to Section 11(6) and the newly added Section 11(6-A) of the Arbitration and Conciliation Act, 1996, (hereinafter referred to as “the 1996 Act”) is the crucial question arising for consideration in this case.' '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. (supra) and Boghara Polyfab (supra). 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 minimize the Court’s intervention at the stage of appointing the arbitrator and this intention as incorporated in Section 11 (6A) ought to be respected. '

6. Both the learned counsel submit that captioned Arb OP is

predicated on Clause 13 of a Partnership Deed dated 11.07.2016 and this

Clause 13 reads as follows:

'13. If, during the continuance of the partnership or at any time thereafter, any difference or disputes shall arise between the partners or their respective legal representatives or any other person or persons under these articles/clauses as to the meaning or construction on the rights and liabilities or matter or things done or

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to be done in pursuance hereof, such disputes and differences shall be referred to arbitration and award fo the president of the incorporated law society and his decision and award shall be final and binding upon the partners.'

7. Aforementioned Clause 13 serves as arbitration agreement

between the parties i.e., between the petitioner and respondents and it is

arbitration agreement within the meaning of Section 2(1)(b) read with

Section 7 of A and C Act is the common say of learned counsel on both

sides. This Court is informed that quantum of shares qua aforementioned

partnership deed dated 11.07.2016 was subsequently modified in and by

another deed dated 01.04.2019 but there is no disputation regarding the

arbitration clause is their further common say. It is made clear that the

arbitrable disputes would now pertain to all arbitrable disputes which arise

out of partnership deed dated 11.07.2016 and subsequent deed dated

01.04.2019 altering the quantum of shares.

8. In the light of the narrative thus far, Ms.R.Rathna Thara,

Advocate, with address for service at No.9, Siddhi Vinayakar Koil Street,

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T.Nagar, Chennai – 600 017 (Mob: 9840451276) (e-mail:

[email protected]) is appointed as a sole Arbitrator.

Ms.R.Rathna Thara, Advocate is requested to enter upon reference,

adjudicate arbitrable disputes that have arisen between the

petitioner/respondent qua aforementioned two deeds and render an award

by following the Madras High Court Arbitration Proceedings Rules 2017

and learned Arbitrator's fee shall be as per Madras High Court Arbitration

Centre (MHCAC) (Administrative Cost and Arbitrator's Fees) Rules 2017.

9. Captioned Arb OP disposed of in the aforesaid manner. There shall