2022 (11) TMI 682 - HC - Indian Laws
Seeking appointment of an Arbitrator - Dispute between the partners in partnership firm - Withdrawal of the amount unilaterally from the account of the Firm and misappropriated the same for his personal benefit without the consent of the petitioner - HELD THAT:- During the course of hearing, it was submitted by Mr. Arora that the respondent No. 1 has no objection to the appointment of an Arbitrator for adjudicating disputes inter se him and the petitioner. The same is also reflected in the order of this Court dated May 19, 2022 - That apart, even in the order of this Court dated December 14, 2021 in OMP (I) (COMM) 362/2021 which is a petition initiated by the petitioner herein under Section 9 of the Arbitration and Conciliation Act, 1996, it has been recorded that the counsel for the petitioner had stated that the petitioner has no objection to appointment of an Arbitrator in this present petition. So, the prayers to the extent of appointment of an Arbitrator, insofar as the dispute between the petitioner and the respondent No.1 is concerned, need to be granted.
The stand of the petitioner that even respondent No. 3, i.e., Rugs Enterprises Private Limited needs to be referred to arbitration - HELD THAT:- The Doctrine of Group of Companies shall not be applicable to the facts of this case. The doctrine can be invoked in certain circumstances, to bind non-signatory affiliates to an arbitration agreement. However, here the petitioner was a partner in a partnership firm and is trying to bind a company, i.e., respondent No.3 to the arbitration agreement between him and respondent No.1, which is clearly impermissible as a partnership in its very nature cannot be equated with a company to invoke the Doctrine. As the name suggests, the Doctrine of Group of Companies is applicable in cases where the arbitration agreement is entered into by one of the companies in a group and the non-signatory affiliate, or sister/parent company is held to be bound by the arbitration agreement when the facts indicate the mutual intension of all the parties to bind the non-signatory affiliate to the agreement - the respondent No.3 cannot be referred to arbitration along with the petitioner and the respondent No.1.
Which claims of the parties are required to be referred to arbitration? - HELD THAT:- The claims of the petitioner are broadly those relatable to the business of the partnership firm, siphoning off of goods and monies, and fraud / forgery - As regards the claims of the petitioner set out in paragraph 51 above, Claim No. (ii) is towards the amounts owed to the creditors of the Firm and Claim No. (iii) is towards the respondent No. 1’s share of the debts owed to Union Bank of India. These claims are with regard to the performance of the partnership deed and arise from the business of the Firm. These come directly under the purview of the arbitration agreement between the petitioner and the respondent No. 1, and as such, need to be referred to arbitration.
Justice Asha Menon (Retd.) (Mobile No. 9910384664), a Former Judge of this Court, is appointed as the Arbitrator to adjudicate the disputes between the parties - petition disposed off.