Rajal Rai Dua on Arbitration in Partnership Disputes

Juridical Efficacy of Arbitration Provisions in Partnership Disputes | A Legal Analysis

This article legally analyses the petition filed under Section 11 of the Arbitration and Conciliation Act, 1996 seeking appointment of an Arbitrator for resolving disputes between two parties after the dissolution of their firm. The High Court of Delhi appointed an arbitrator to resolve the disputes between two parties named Himanshu Jain and Shiv Kumar Sharma ( previous partners of M/s Applied Communication and Controls ). The case was represented by Mr. Rajal Rai Dua at Dua's & Dua's Advocates and Consultants in Delhi.

Background of the Case

The two parties Himanshu Jain and Shiv Kumar Sharma entered into a partnership on June 01, 2022 for manufacturing telecom and surveillance equipment, spare parts and accessories. The petitioner Jain held a 51% stake in the company and the respondent Sharma owned 49%. The partners mutually decided to dissolve the firm on July 3, 2023. Even though the firm was dissolved, certain disputes remain unsolved. Jain invoked the arbitration clause in their partnership agreement and set a legal notice on February 09, 2024 requesting the appointment of arbitrator to settle these issues.

The Arbitration Clause

The arbitration clause 19 of the partnership deed deals with if any disputes between the partners shall be referred to a sole arbitrator and mutually agreed upon under the Indian Arbitrator Act 1940.

Decision of the Court
During the hearing, both parties Jain and Kumar did not object to arbitration. However, their counsel, Mr. M.C. Kochhar, requested that their legal submissions remain open for consideration.
The court appointed Mr. K.K. Bhuchar as the sole arbitrator to resolve the disputes between those parties for the above reasons. The arbitration process will be conducted under the Delhi International Arbitration Centre (DIAC) rules, 2018.

Key Directives from the Court
1. The arbitrator must provide a declaration under Section 12 of the Arbitration Act before beginning proceedings.
2. The remuneration will be as per DIAC's 2018 rules.
3. The arbitrator will have the authority to decide on the arbitrability of claims and address any preliminary objections.
4. Both parties must approach the arbitrator within two weeks of the court order.

Case Conclusion
The court accepted Jain's request and appointed an arbitrator to resolve the business conflict with Shiv Kumar Sharma. This case was represented by the best lawyer for arbitration in Delhi, Rajal Rai Dua and he argued the case very well for a favourable judgement. This decision highlights the importance of alternative dispute resolution (ADR) in business conflicts to solve their problem. By upholding the arbitration clause in the partnership agreement, the parties have solutions to solve their business problems quickly and effectively.

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This release was published on openPR.