SHIBU R. Vs. MANOJ MUYYODI

JUDGEMENT

(1.) The petitioner, one of the partners of the 3rd respondent partnership firm, has filed this request under Sec. 11(5) of the Arbitration and Conciliation Act, 1996 for the appointment of a sole arbitrator for the settlement of the disputes mentioned in Annexure-3 plaint.

(2.) The 3rd respondent partnership firm was constituted by the petitioner and respondents 1 and 2, by virtue of a partnership agreement executed on 11/9/2017 with the objective of conducting a service and repair shop of four wheeler vehicles, wherein, mechanical work, electrical work, body work, wheel alignment and similar activities were proposed to be undertaken. The deed of partnership so executed by the petitioner and respondents 1 and 2 is produced as Annexure-I. Clause(16) of Annexure-1 contains the arbitration clause which reads as follows :

(3.) Alleging that respondents 1 and 2 committed various breach of terms of the partnership deed, misappropriation of funds, failure to settle accounts, etc., the petitioner sent a lawyer's notice dtd. 11/6/2018 to respondents 1 and 2, dissolving the firm with effect from 11/6/2018. To the above lawyer's notice, respondents 1 and 2 sent Annexure-2 reply notice through their lawyer, denying the allegations raised by the petitioner. Thereafter, the petitioner instituted Annexure-3 suit before the Sub Court, Tirur, seeking the relief of declaration that the partnership stood dissolved from 11/6/2018, and also for a direction to the defendants to settle the accounts of the partnership firm, from the commencement of the partnership till dissolution, and for giving the share of the plaintiff. The above suit was later on transferred to Commercial Court, Manjeri and it was re-numbered as C.S.No.31 of 2021. Respondents 1 and 2 filed written statement in the said suit referring to the arbitration clause in the partnership deed executed in between the parties, and also contending that the suit is liable to be dismissed for lack of jurisdiction in view of the above arbitration clause. Though respondents 1 and 2 had filed a petition under Sec. 8 of the Arbitration and Conciliation Act in the abovesaid suit, requesting for a reference of the issue for arbitration, they later on withdrew the above application. Thereafter, on the basis of an application filed by the petitioner, the above suit was permitted to be withdrawn. The petitioner then issued Annexure-5 lawyer's notice, nominating an advocate practicing at Manjeri as the sole arbitrator to resolve the disputes between the partners. To the above lawyer's notice, respondents 1 and 2 sent Annexure-6 reply notice, opposing the move on the part of the petitioner to proceed with the arbitration through the Arbitrator nominated by him. The petitioner thereafter, filed M.C.A.No.1 of 2022 before the Commercial Court, Tirur under Sec. 9 of the Arbitration and Conciliation Act, for a direction to the respondents to furnish security for Rs.18,24,000.00 and also for an interim attachment in the event of failure on the part of respondents 1 and 2 to furnish security, as directed. He also sought an injunction restraining the respondents from alienating the 'B' Schedule articles mentioned thereunder. The Commercial Court, Tirur, as per order dtd. 18/11/2023, dismissed the above application filed by the petitioner, holding that the said court is not having jurisdiction to decide the above application. Referring to the withdrawal of Annexure-3 suit, the Commercial Court observed in the above order that, if a party voluntarily gave up his suit seeking the relief of dissolution of partnership and allied reliefs when defendants contended that the parties should be referred for arbitration, he cannot initiate arbitration proceedings independently for the same relief. It was further observed that Sec. 9 of the Arbitration and Conciliation Act is maintainable only at the instance of a person who will be able to initiate arbitration proceedings thereafter. The Commercial Court, by referring to the decision of this Court in Kadeeja T.A v. R.K.Manjusha [2018 (2) KLT 145], observed that a suit for dissolution of partnership and for consequential settlement of accounts cannot be referred for arbitration. Now, in the present request filed under Sec. 11(5) of the Arbitration and Conciliation Act, 1996, the applicant seeks the relief of appointment of a sole Arbitrator for the settlement of disputes mentioned in Annexure-3 plaint, and existing among the parties to the above arbitration request, and also to grant such other reliefs, which the applicant may pray for.