Gujarat High Court: While deciding the instant petition, Aravind Kumar, C.J., said that the prayer for appointment of an arbitrator under Section 11(6) of the Arbitration and Conciliation (‘A&C’) Act, 2016 cannot be rejected on the ground that it is vague or bereft of the material particulars as Section 21 of the A&C Act does not remotely suggests that the nature of dispute has to be enumerated or explained in the notice invoking the arbitration clause.
On 10-12-2018, the petitioner and the respondents entered into a Partnership Agreement (‘Deed’). On 2-02-2021, a notice was issued by the respondent, on account of some disputes between the parties, to settle the disputes within 15 days. When the disputes were not settled, on 23-03-2021, the petitioner got issued a notice invoking the arbitration clause of the Deed by nominating one as the sole arbitrator.
Counsel for the respondent contended that the arbitration notice issued by the petitioner lacked material particulars. Therefore, the petition should be dismissed.
Counsel for the petitioner cited Umesh Goel v. H.P. Coop. Group Housing Society Ltd., (2016) 11 SCC 313 contending that the bar contained under Section 69(3) of the Partnership Act, 1932 will not be applicable to the proceedings under the A&C Act.
Observation and Analysis:
The Court noted that in view of Section 69(3) of the Partnership Act, no suit can be instituted in any Court by any partner, to enforce a right arising from a contract or under the Partnership Act, unless the firm is registered.
The Court, while referring to Umesh Goel supra, said that according to the ruling, the arbitral proceedings does not come under the ambit of the expression “other proceedings”, as provided under the Partnership Act. Therefore, the Court reiterated that the bar imposed under Section 69 will have no application to the arbitral proceedings and award.
The Court held that a notice issued under Section 21 of the A&C Act cannot be rejected on the grounds that it is vague or bereft of the material particulars.
The Court further held that Section 21 of the A&C Act does not remotely suggest that the nature of dispute must be enumerated in the notice invoking the arbitration clause.
Hence, the Court allowed the petition, appointing a Sole Arbitrator, as the notice issued by the petitioner fell within the ambit of Section 21 of the A&C Act.
[Hemlata Jain v. Padmavati Analkumar Mishra, 2022 SCC OnLine Guj 1787, decided on 7-10-2022]
*Kriti Kumar, Editorial Assistant has reported this brief.