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2022 DIGILAW 2873 (MAD)

S. P. Meena v. Sri Meenakshi Pack Wood Industries, Rep. by its Managing Partner, S. Palaniappan, Chennai

2022-08-23

M.SUNDAR

body2022
JUDGMENT (Prayer: Arbitration Original Petition filed under Section 11 (6)(a)(c) of the Arbitration and Conciliation (Amendment) Act, 2015 read with Rule 2 of the appointment of the Arbitrators of Madras High Court Scheme, 1996 seeking appointment of an arbitrator to resolve the disputes between the petitioner and the respondents in terms of Clause 18 of the Deed of Partnership dated 01.04.2008 and for the cost of this petition.) 1. 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 28.03.2022, 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 15.02.2022 under Section 11 of 'The Arbitration and Conciliation Act, 1996 (Act No.26 of 1996)' [hereinafter referred to as 'A and C Act' for the sake of convenience, clarity and brevity]. 2. Mr.P.Suresh Srinivasan, learned counsel on record for petitioner who is before this Court submits that the captioned Arb OP is predicated on clause 18 of a 'partnership deed dated 01.04.2008' [hereinafter 'primary contract' for the sake of convenience and clarity]. 3. Clause 18 of primary contract reads as follows: 18. Any difference or dispute among partners as regards the interpretation of the present or any other matter touching the partnership shall be referred to arbitration and shall be settled by means of arbitration.' 4. Aforementioned clause 18 of primary contract serves as arbitration agreement between the parties i.e., arbitration agreement within the meaning of Section 2(1)(b) read with Section 7 of A and C Act is learned counsel's say. Learned counsel submits that trigger notice is dated 02.11.2021 and respondents sent a reply dated 22.11.2021 not agreeing for arbitration, necessitating the presentation of captioned Arb OP in this Court. 5. In the 22.11.2021 reply, there is a mention about a suit in O.S.No.455 of 2019 filed by the petitioner. This Court is informed that this suit is pending on the file of District Munsif Court, Alandur and learned counsel submits that this suit has nothing to do with arbitration. 6. Issue notice to respondents returnable in three weeks i.e., returnable by 18.04.2022. Private notice permitted. 7. List on 18.04.2022.' 3. This Court is informed that this suit is pending on the file of District Munsif Court, Alandur and learned counsel submits that this suit has nothing to do with arbitration. 6. Issue notice to respondents returnable in three weeks i.e., returnable by 18.04.2022. Private notice permitted. 7. List on 18.04.2022.' 3. The short forms, abbreviations and short references used in the proceedings made in the earlier listing on 28.03.2022 will continue to be used in the instant order also for the sake of convenience and clarity. 4. Post 28.03.2022 proceedings, all the five respondents have been duly served. Mr.R.Subramanian, learned counsel for respondents 1 and 2 and Mr.P.Vasantha Kumar, learned counsel for respondents 3 to 5 are before this Court. To be noted, Mr.P.Suresh Srinivasan, learned counsel on record for the sole petitioner is also before this Court. Learned counsel for respondents, namely Mr.R.Subramanian and Mr.P.Vasantha Kumar submit that they are not resisting the prayer of the petitioner for appointment of a sole Arbitrator. This makes the task of disposal of captioned matter fairly simple. 5. Before doing that, this Court deems it appropriate to make it clear that the stated position of the respondents is only with regard to existence of arbitration agreement and appointment of Arbitrator. In other words, the respondents are not making any concession or giving any consent qua the lis. This also means that all questions are left open to be decided by a Hon'ble sole Arbitrator to be appointed by this Court (elsewhere infra in this order). 7. This Court is informed that the primary contract is a Partnership Deed dated 01.04.2008 and the partners are members of one family i.e., father and his four daughters. Considering the scope of a legal drill under Section 11, it is not necessary to dilate any further on this aspect of the matter. Suffice to say that a legal drill under Section 11 should 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 judgment, decree or order of any Court, confine to the examination of the existence of an arbitration agreement.' 8. 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) 9. 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: 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. ' 10. In the light of the fair stand taken by the respondents it is not necessary to dilate further on other possible facets of a Section 11 legal drill. ' 10. In the light of the fair stand taken by the respondents it is not necessary to dilate further on other possible facets of a Section 11 legal drill. It is also deemed appropriate to make it clear that all the parties before this Court agree that the civil suit in O.S.No.455 of 2019 on the file of District Munsif Court, Alandur will proceed and will be carried to its logical end. This means that even if there is any overlap qua arbitral proceedings, the parties have agreed that the subject matter of the Civil Suit is severable and parties will submit themselves to the jurisdiction of the Civil Court. This is recorded to avoid any conflict in the proceedings before the Hon'ble Arbitrator Tribunal. 11. Hon'ble Mr.Justice K.P.Sivasubramaniam (Retd.,), former Judge of this Court, residing at No.47, Pulla Avenue, Shenoy Nagar, Chennai – 30 (Mob:9444701312) is appointed as sole Arbitrator. Hon'ble sole Arbitrator is requested to enter upon reference qua primary contract i.e., Partnership Deed dated 01.04.2008, adjudicate upon the arbitrable disputes that have arisen between the parties and render an award by applying 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.