Madras High Court
Usha Singh Panwar vs S.D.Syed Sherfudeen on 8 August, 2022
Arb.O.P (Com.Div) No.263 of 2022
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Dated : 08.08.2022
Coram
THE HONOURABLE MR. JUSTICE M.SUNDAR
Arb.O.P (Com.Div) No.263 of 2022
Usha Singh Panwar
Partner-Deo Gratia Associates
21/60/2 East Canal Road
Dehradun – 248 001 ... Petitioner
vs.
1. S.D.Syed Sherfudeen
Managing Partner-Deo Gratia Associates
No.42, G.N.Chetty Street
Mylapore,
Chennai – 600 004.
2. Sara Begum
Partner -Deo Gratia Associates
No. 42, G.N.Chetty Street
Mylapore, Chennai – 600 004.
... Respondents
Petitioner filed under Section 11(6) of the Arbitration and
Conciliation Act, 1996 to appoint a sole Arbitrator to adjudicate upon the
disputes between the petitioner and the respondents arising out of the
Partnership Deed dated 03.04.2008 and dissolve the same.
For Petitioner : Mr.C.Kaveen
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Arb.O.P (Com.Div) No.263 of 2022
ORDER
This order will now dispose of captioned matter.
2. This order has to be read in conjunction with and in continuation
of proceedings made in the first listing of captioned matter before this
Court on 24.06.2022, which reads as follows:
'Captioned 'Arbitration Original Petition' [hereinafter
'Arb OP' for the sake of convenience and clarity] has been
presented in this Court on 06.06.2022 under Section 11 of 'The
Arbitration and Conciliation Act, 1996 (Act 26 of 1996)'
[hereinafter 'A and C Act' for the sake of brevity, convenience
and clarity] with a prayer for appointment of a sole Arbitrator.
2. Mr.C.Kaveen, learned counsel for petitioner who is
before this Court submits that the captioned Arb OP is
predicated on clause 17 of a 'partnership deed dated
03.04.2008' [hereinafter 'primary contract' for the sake of
convenience and clarity].
3. Learned counsel submits that in and by primary
contract, the petitioner and two respondents brought to
existence a partnership firm in the name and style of 'DEI
GRATIA ASSOCIATES' inter alia for doing the business of
exporting spices and land development, primary activities for
residential complex etc., It is submitted that the partnership ran
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Arb.O.P (Com.Div) No.263 of 2022
into rough weather necessitating invocation of arbitration
clause i.e., aforementioned clause 17 in primary contract which
reads as follows:
'17. Arbitration:
All the disputes which may arise at any time
between the partners of their respective executors or
administrators relating to the partnership affairs or
the construction of this agreement shall be referred
to a single arbitrator to be appointed by them and
decision of such arbitrator shall be final and
binding'.
4. It is submitted that arbitrable disputes arose as the
petitioner sought dissolution inter alia by issue of a notice dated
19.01.2022. Post dissolution, respondents agreed to settle the
matter inter alia by selling properties said to have been
purchased from the funds of the petitioner. It is not necessary
to dilate more on arbitrable disputes as this is a Section 11
legal drill.
5. Vide trigger notice i.e., notice invoking arbitration
clause dated 18.05.2022, petitioner has suggested a name of a
member of the Bar to act as sole Arbitrator. This trigger notice
dated 18.05.2022 has been duly served on both the respondents
on 24.05.2022 but there is no response or reply necessitating
the presentation of the captioned Arb OP in this Court is
learned counsel's say. Learned counsel adds that the
aforementioned clause 17 of primary contract serves as an
Arbitration Agreement between the parties i.e., Arbitration
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Arb.O.P (Com.Div) No.263 of 2022
Agreement within the meaning of Section 2(1)(b) read with
Section 7 of A and C Act.
8. Prima facie case made out for issue of notice.
9. Issue notice to respondents returnable in a fortnight
i.e., returnable by 08.07.2022 Private notice permitted.
10. List on 08.07.2022'
3. Today, Mr.C.Kaveen, learned counsel for sole petitioner, who is
before this Court, submits that post 24.06.2022, there was difficulty in
effecting service on the respondents and therefore, the matter was listed
before learned Master for completing service. This Court is informed
that steps were taken before learned Master and service has since been
completed by resorting to substituted mode of service. The proceedings
of learned Master dated 04.08.2022 are as follows:
'Paper publication effected as ordered. Affidavit of
service filed and verified. Service completed. List the matter
before the Hon'ble Judge's Court on 08.08.2022.'
4. The respondents have not chosen to come before this Court to
dispute the existence of the arbitration agreement between the parties.
Considering the scope of a legal drill under Section 11 and in the light of
sub-section (6A) thereat, this Court deems it appropriate to appoint a sole
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Arb.O.P (Com.Div) No.263 of 2022
Arbitrator. Before it is done (infra in this order) it is deemed appropriate
to set out that sub-section (6A) of Section 11 of A and C Act came up for
consideration before Hon'ble Supreme Court in oft-quoted Mayavati
Trading case law [Mayavati Trading Private Limited Vs. Pradyuat Deb
Burman reported in (2019) 8 SCC 714], relevant paragraph in Mayavati
Trading case law is paragraph No.10 and the same 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, S.A case law [Duro Felguera, S.A.
Vs. Gangavaram Port Limited reported in (2017) 9 SCC 729], relevant
paragraphs in Duro Felguera case law are paragraphs 47, 59 and the
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Arb.O.P (Com.Div) No.263 of 2022
same read as follows:
'47. What is the effects of the change introduced by the
Arbitration and Conciliation (Amendment) Act, 2015
(hereinafter 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. The other facets of a Section 11 legal drill are by way of judicial
pronouncements i.e., N.N.Global principle being ratio laid down by
Hon'ble Supreme Court in N.N.Global Mercantile Pvt. Ltd., Vs. Indo
Unique Flame Ltd., and others reported in 2021 SCC OnLine SC 13
and Nortel principle i.e., ratio laid down by Hon'ble Supreme Court in
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Arb.O.P (Com.Div) No.263 of 2022
Bharat Sanchar Nigam Limited and another Vs. Nortel Networks
India Private Limited reported in (2021) 5 SCC 738 [arbitration clause
being in a contract that is unstamped / insufficiently stamped and /or not
registered though it is compulsorily registrable and lis being ex facie
barred by limitation pleas] do not arise as the respondents have not
chosen to come before this Court to dispute the existence of arbitration
agreement. Therefore, it will suffice to perambulate within the statutory
perimeter sketched by sub-section (6A) of Section 11 of A and C Act.
7. In the light of the narrative thus far, Mr.D.Arulraj, Retired
District Judge, residing at No.27, 1st Main Road, Sairam Nagar,
Medavakkam, Chennai – 600 100, Mob: 9444145289 and 9884845289,
E-mail: [email protected], [email protected] is
appointed as sole Arbitrator. Learned Arbitrator is requested to enter
upon reference, adjudicate the arbitrable disputes that have arisen
between the parties by holding sittings in 'Madras High Court Arbitration
and Conciliation Centre under the aegis of this Court' (MHCAC) in
accordance with the Madras High Court Arbitration Proceedings Rules,
2017 and fee of the learned Arbitrator shall be as per Madras High Court
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Arb.O.P (Com.Div) No.263 of 2022
Arbitration Centre (MHCAC) (Administrative Cost and Arbitrator's Fees)
Rules 2017.
8. Captioned Arb.OP is disposed of in the aforesaid manner. There
shall be no order as to costs.
08.08.2022
gpa
Note: Registry is directed to communicate a copy of this order
forthwith to
1. Mr.D.Arulraj,
Retired District Judge,
27, 1st Main Road,
Sairam Nagar,
Medavakkam,
Chennai – 600 100,
Mob: 9444145289 and 9884845289
E-mail: [email protected], [email protected]
2. The Director
Tamil Nadu Mediation Conciliation Centre
-cum- Ex-Officio Member
Madras High Court, Arbitration Centre
Chennai - 104
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Arb.O.P (Com.Div) No.263 of 2022
M.SUNDAR.J.,
gpa
Arb.O.P (Com.Div) No.263 of 2022
08.08.2022
https://www.mhc.tn.gov.in/judis
