Del HC │ Justice Deepak Gupta, former Judge of the Supreme Court of India appointed as the Arbitrator to adjudicate the disputes in L&L Partners Litigation firm after unsuccessful mediation

Delhi High Court

Delhi  High Court: Prateek Jalan, J. took up a petition which was filed under Section 9 of the Arbitration and Conciliation Act, 1996.

The claim of the petitioners is that they are the legal heirs of Mr. Vijay Kumar Sondhi, who was a partner in L & L Partners Litigation, a partnership firm of lawyers (respondent 6). Mr. Sondhi passed away on 28-01-2022 and the petitioner’s claimed that his share in the partnership firm has devolved upon them by his Will dated 01-04-2014 founded upon Clause 13 of the partnership deed dated 01-04-2022, which reads as follows:

“13 That the death or insolvency shall not result the firm into dissolution and shall be taken over by the legal heirs of the Partners. If the legal heir/s do not qualify to become the Partner in the firm, the capital balance lying in the firm shall be paid to the legal heir/s.”

 

The deed also contained an arbitration clause and keeping in mind the nature of the disputes, the parties were referred to mediation before a former Judge of this Court. The mediation was unsuccessful despite the sustained efforts of the Mediator. Counsel for all the parties agreed that the mediation proceedings have been closed, however the last session’s report was not placed before the Court. The counsel  for parties also agreed that the dispute would have to be referred to arbitration and that the present petition will be treated as an application under Section 17 of the Act before the learned Arbitrator.

 

The parties consented to the appointment of an arbitrator in these proceedings itself. Mr. Justice Deepak Gupta, a former Judge of the Supreme Court of India was therefore appointed as the Arbitrator to adjudicate the disputes between the petitioners and respondent  1, 4 -6.

 

In context to the ad interim measures sought by the petitioners of restraining the respondents from changing/ altering / modifying the structure and/or constitution of the Respondent 6 firm and restraining the Respondents from selling or transferring or creating any charge or encumbrance or security interest of any kind whatsoever, on the immovable properties which are either owned or in which the investments have been made by the Respondent 6 it was submitted by the counsel of the respondent 6 that respondent  6 does not intend to create any third party interests or security interests or any other encumbrance in the immovable properties owned by the firm. He further submits that as far as the investments of the respondent  6 were concerned, certain investments are liquidated as required for the purpose of meeting the operational expenses of the respondent  6, including salaries.

 

The Court stated that keeping in mind the statement of the Counsel above, the same will bind respondent  6, as far as the immovable properties of respondent 6 were concerned.

  • They were allowed to utilize those investments only for the purpose of meeting operational expenses, and maintaining accounts in this regard.
  • It was further directed that the share of Mr. Sondhi in the partnership firm, which according to the respondents is to the tune of approximately 20.8%, will not be disturbed.
  • The induction of any new equity partners in the partnership of the firm will also be subject to the prior approval of the learned Arbitrator.
  • In the event, any of the existing partners seeks to resign from the partnership firm, they may do so, and the proportion of their share which would have gone to Mr. Sondhi will also be maintained undisturbed.

 

It was made clear by the Court that these directions will take effect, subject to any orders, whether ad interim or final, passed by the Arbitrator in the application under Section 17 of the Act and that he will be free to vary, vacate or modify these directions, which are intended only to preserve the position of the parties until the Arbitrator has had an opportunity to enter into the reference, and consider the proceedings under Section 17 of the Act.

 

[Sangeeta Sondhi v. Rajiv K. Luthra, O.M.P.(I) (COMM.) 155 of 2022, order dated: 01-06-2022]

For petitioners: Mr Ashwini Kumar Mata & Mr Sunil Dalal, Senior Advocates with Mr Abhishek Rana & Mr Ashish Mohan

For respondents : Ms Haripriya Padmanabhan, Ms Pooja Dhar & Mr Zeeshan Diwan (For R-1)

Mr Raghvendra Singh (for R-2)

Mr Rajiv Nayar, Sr. Advocate with Mr Saurabh Seth & Mr Gaurav Chauhan (for R- 3 to 6)


*Suchita Shukla, Editorial Assistant has reported this brief.

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