Madras High Court

Mr.Jaikumar Christhurajan vs M/S.Trinity Promoters on 10 August, 2022

Arb.O.P (Com.Div.) No.331 of 2022

IN THE HIGH COURT OF JUDICATURE AT MADRAS

DATED : 10.08.2022

CORAM

THE HON'BLE MR. JUSTICE M.SUNDAR

Arb.O.P (Com.Div.) No.331 of 2022

Mr.Jaikumar Christhurajan .. Petitioner

Vs.
1. M/s.Trinity Promoters
N.19, East Main Street
Tiruvarur, Tiruvarur District

2. Smt.S.Vadivambal

3. Smt.A.Glory Yasmin Rani

4. Sri.B.Babu Manoharan

5. Sri.B.Arivalagan ... Respondents

Arbitration Original Petition filed under Section 11 (4) of the
Arbitration and Conciliation Act, 1996 to appoint any competent person as
the sole arbitrator to resolve the dispute between the petitioner and the
respondents, arising out of the Partnership Deed dated 01.04.2010.

For Petitioner : Mr.Hari Radhakrishnan

For Respondents : Mr.S.Rajasekar

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Arb.O.P (Com.Div.) No.331 of 2022

ORDER

This order will now dispose of the captioned matter.

2. This order has to be read in conjunction with and in continuation of

earlier proceedings made in the previous listing on 27.07.2022, which reads

as follows:

'Captioned 'Arbitration Original Petition' [hereinafter 'Arb OP' for the sake of convenience and clarity] has been presented in this Court 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] on 08.07.2022 with a prayer for appointment of a sole Arbitrator.

2. Mr.Hari Radhakrishnan, learned counsel on record for sole petitioner submits that the captioned Arb OP is predicated on clause

(l) of a 'Deed of Partnership dated 01.04.2010' [hereinafter 'primary contract' for the sake of convenience and clarity]. To be noted, partnership deed is qua a firm in the name and style 'Trinity Promoters' (hereinafter 'said firm' for the sake of brevity) was first entered into on 01.04.2007. In and by primary contract dated 01.04.2010, there was reconstitution by which sixth respondent in the captioned Arb OP also became a partner of said firm.

3. Aforementioned clause (l) of primary contract reads as follows:

'l) Any dispute or question in connection with the partnership between the partners shall be settled by arbitration under Indian Arbitration Act, 1940.'

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Arb.O.P (Com.Div.) No.331 of 2022

4. Learned counsel for petitioner submits that when the primary contract was operated i.e., when the partnership firm in the name and style of Trinity Promoters was carried on, disputes erupted amongst the parties inter alia regarding sharing of profits, maintaining books of accounts and monetary loss allegedly owing to respondents 2 and 6. To be noted, partnership firm itself has been arrayed as first respondent in the captioned Arb OP.

5. Learned counsel submits that owing to eruption of arbitrable disputes qua primary contract, petitioner caused a notice dated 17.06.2022 triggering the aforementioned arbitration clause i.e., clause (l) of primary contract. Learned counsel submits that the aforementioned clause (l) of primary contract serves as arbitration agreement amongst partners i.e., 'arbitration agreement' within the meaning of Section 2(1)(b) read with Section 7 of A and C Act.

6. Adverting to trigger notice, learned counsel submits that a reply dated 05.07.2022 was received stating that the parties have entered into a memorandum of understanding (MOU) dated 25.02.2020 and therefore they do not give consent for appointment of arbitrator. This has necessitated the presentation of captioned Arb OP in this Court is learned counsel's say.

7. Prima facie case for issue of notice made out.

8. Issue notice to respondents returnable in a fortnight i.e., returnable by 10.08.2022. Private notice permitted.

9. List on 10.08.2022.'

3. Aforementioned earlier proceedings dated 27.07.2022 shall be read

as an integral part and parcel of this order. This means that the

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Arb.O.P (Com.Div.) No.331 of 2022

abbreviations, short forms and short references used in the earlier

proceedings will continue to be used in the instant order also for the sake of

convenience and clarity.

4. Today, Mr.Hari Radhakrishnan, learned counsel for sole petitioner

and Mr.S.Rajasekar, learned counsel for all the five respondents are before

this Court.

5. Learned counsel for respondents, on instructions, very fairly

submits that a sole Arbitrator can be appointed as there is no disputation

about the existence of the arbitration agreement. This makes the task of

disposal of captioned Arb.OP fairly simple.

6. Notwithstanding the trajectory the matter has taken, this Court

deems it appropriate to set out that a legal drill under Section 11 shall

perambulate within the statutory perimeter sketched by sub-section (6A)

thereat, which reads as follows:

'(6A) 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

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Arb.O.P (Com.Div.) No.331 of 2022

judgment, decree or order of any Court, confine to the examination of the existence of an arbitration agreement.'

7. The aforementioned sub-section (6A) of Section 11 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)

8. Aforementioned paragraph 10 of Mayavati Trading case law takes

this Court to Duro Felguera, S.A case law i.e., 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 same

read as follows:

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Arb.O.P (Com.Div.) No.331 of 2022

'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. '

9. It is not necessary to dilate more on this aspect of the matter in the

light of the fair stand taken by the respondents. Though obvious, it is made

clear that the consent of the respondents is only for appointment of an

Arbitrator and regarding the existence of the arbitration agreement and there

is no consent or concession qua lis.

10. In the light of narrative thus far, Hon'ble Mr.Justice N.Kirubakaran

(Retd.), a former Judge of this Court, residing at No.36, 2nd Cross Street,

Rayala Nagar, Ramapuram, Chennai – 600 089, Mob: 94450 25454, E-mail:

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Arb.O.P (Com.Div.) No.331 of 2022

[email protected] is appointed as sole arbitrator. Hon'ble

sole Arbitrator is requested to enter upon reference, adjudicate upon the

arbitrable disputes that have arisen between the parties qua primary contract

i.e., Deed of Partnership dated 01.04.2010 by holding sittings in the 'Madras

High Court Arbitration Centre under the aegis of this Court' (MHCAC) in

accordance with the Madras High Court Arbitration Proceedings Rules 2017

and fee of the Hon'ble Arbitrator shall be as per Madras High Court

Arbitration Centre (MHCAC) (Administrative Cost and Arbitrator's Fees)

Rules 2017.

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

no order as to costs.

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Note: The Registry is directed to communicate this order forthwith to

1. Hon'ble Mr.Justice N.Kirubakaran (Retd.), Former Judge of Madras High Court, No.36, 2nd Cross Street, Rayala Nagar, Ramapuram Chennai – 600 089 Mob: 94450 25454, E-mail: [email protected]

2.The Director Tamil Nadu Mediation and conciliation Centre

-cum- Ex Officio Member, Madras High Court Arbitration Centre Madras High Court, Chennai – 600 104.

M.SUNDAR, J.,

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Arb.O.P (Com.Div.) No.331 of 2022

gpa

Arb.O.P (Com.Div.) No.331 of 2022

10.08.2022

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