Bombay HC Pursues Case Regarding the Nomination of Sole Arbitrator to Settle Partnership Dispute

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The High Court heard the matter where disputes had arisen between the parties from their partnership deed. The Court directed that, in light of the arbitration clause of the partnership agreement, both the parties had to refer to a sole arbitrator. Hence, accordingly, all the disputes were referred to the sole arbitration of Mr Abhay Khandeparkar, learned Advocate of the Court.

The Court considered this issue, in the matter of Surekha R Thorat & Ors v. Thorat Wine Mart & Ors.

Background

A partnership dispute arose between the two parties. They had a partnership agreement dated 1st July 1987. Clause 13 of the agreement had an arbitration provision. While the arbitration was to be conducted in Mumbai, the clause also required each party to nominate an arbitrator and those two arbitrators were further to nominate an umpire.

So, both the parties were required to refer an arbitrator for settling their disputes, before the Bombay High Court on 26th November 2020.

Submissions Before the Court

The two sides had agreed and submitted before the Court that the reference may be Shephali Mormare as the sole Arbitrator, looking to the costs involved and also expediting the digitally signed arbitration process. Moreover, they had suggested the name of Mr Abhay Khandeparkar, a learned Advocate of the Bombay High Court.

Parties had also agreed that all the arbitral costs and the fees of the sole Arbitrator was to be borne by them in equal shares.

Consideration by Court

The Court took into consideration the reference made by the parties to appoint Mr Abhay Khandeparkar, learned Advocate of this Court, as an arbitrator. Hence, he was hereby nominated to act as a sole Arbitrator, to decide regarding the disputes and differences between the parties as under the partnership deed.

Court’s Directions

The present application was thus, disposed of in the following terms.

The Court clarified that a copy of the present order was to be communicated by the advocates for the Applicant to the learned sole Arbitrator, nominated by the Court within one week from the date the order was uploaded.

The learned Sole Arbitrator was also required to forward, the necessary statement of disclosure as under Section 11(8) read with Section 12(1) of the Arbitration Act to the Advocates for the parties expeditiously. It was also directed that the Advocates for the applicant will arrange to file the original statement in the Registry. Parties were to appear before the learned Sole Arbitrator on such date and at such place as the learned Sole Arbitrator nominated, to obtain the appropriate directions regarding the fixing of a schedule for completing pleadings.

It was further clarified that the Respondent was at liberty to raise all questions of jurisdiction within the meaning of section 16 of the Arbitration Act. Liberty to the parties to make an interim application/s under Section 17 of the Arbitration & Conciliation Act, 1996 before the learned Sole Arbitrator. Any such application was to be decided in such a manner and within such time as the learned Sole Arbitrator will deem fit. The learned Sole Arbitrator had been requested to dispose of all interim applications at the earliest.

Moreover, the Arbitral Tribunal’s fees was to be governed by the Bombay High Court (Fee Payable to Arbitrators) Rules, 2018. The Parties would immediately consent to an extension of up to six months to complete the arbitration if the learned Sole Arbitrator found it to be necessary. 

It was also made clear that the present order and the directions issued would not be in derogation of the learned Sole Arbitrator’s powers to determine the procedure before him.

Click here to read the judgment.


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