SUBAIDA Vs. A A ABDUL NAXIR

JUDGEMENT

(1.) The petitioners and the respondent are partners of a partnership firm by name "M/s. King Beedi Company". Annexure A is the deed of partnership. Clause 21 therein is an arbitration clause which provides that any dispute or question in connection with the partnership deed or the carrying on of business or management of the partnership shall be decided by referring to arbitration of two arbitrators appointed by the parties in dispute and that the award given by the arbitrators shall be binding on all the parties in the partnership deed. By Annexure B letter, the respondent expressed his desire to retire from the partnership and through Annexure C, the petitioners, the remaining partners accepted the retirement. Alleging that in spite of his retirement, the respondent is trying to interfere with the day-to-day administration and affairs of the firm, the petitioners moved the District Court, Thrissur by filing O.P. (Arb.) No. 157 of 2006 under Section 9 of the Arbitration and Conciliation Act, 1996 for interim relief. Annexure D is the order of injunction passed by the District Court in that case. The petitioners point out that Annexure D directs the parties to settle their disputes through arbitration and that pursuant to Annexure D, they issued Annexure E letter informing the respondent regarding the panel of arbitrators to be selected for resolving the dispute. The panel contained the names of three retired Judges of this Court. On receiving Annexure E, the respondent has suggested the name of another retired Judge of this Court who was not agreeable to the petitioners. It is under such circumstances that the arbitration request has been filed by the petitioners under Section 11(4) and (5) of the Arbitration and Conciliation Act, 1996 seeking appointment of an independent and impartial arbitrator.

(2.) A detailed counter affidavit has been filed by the respondent. It is contended therein that the A.R. is not maintainable in view of the conceded position that the respondent has already retired from the partnership. It is then contended that after obtaining Annexure D order, the petitioners did not move a. little finger for initiating the arbitration proceedings. Therefore, the respondent filed O.S. No. 96/07 before the Sub Court, Thiruvenlveli for dissolution of the firm and for rendition of accounts relating to the firm. The petitioners contended before that court that the suit is not maintainable. But that court by order dated 16-7-2007 found that the suit is maintainable. In view of the finding by a competent civil court that a suit for settlement of the disputes which are now sought to be arbitrated is maintainable, the present A.R. is not maintainable. It is however conceded in the counter affidavit that C.R.P. No. 1300/07 has been filed by the petitioners against the finding of the Sub Court, Thirunelvili that the suit is maintainable, before the Madras High Court.

(3.) The petitioners have filed a reply affidavit producing Annexure G order passed by the Madurai Bench of the Madras High Court, under Annexure G, the entire proceedings in the suit before the Thirunelveli Sub Court including the order of injunction granted by that court stand stayed. Annexure H order is also relied on in this regard. Referring to Section 8 of the Arbitration and Conciliation Act, 1996, the petitioners contend that the Thirunelveli Sub Court has no jurisdiction to proceed with the suit. The petitioners rely on Annexure I judgment of this Court in Arb. A. No. 23 of 2006 which was filed against Annexure D order of the District Court, Thrissur.