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Smart Summary

Factual and Procedural Background

The Petitioner filed an arbitration petition seeking appointment of a sole arbitrator under Section 11 of the Arbitration and Conciliation Act, 1996, as amended in 2015. The dispute arose under Clause 35 of a property development agreement dated 27 February 2009. The Petitioner invoked arbitration by notice dated 18 June 2019, to which no reply was received. [1]

Respondent Nos. 2 and 3 tendered an affidavit in reply dated 27 November 2021, relying on an ex parte award dated 17 August 2021 that had dissolved the respondent firm. [2]

Legal Issues Presented

  1. Whether a sole arbitrator should be appointed under the arbitration clause contained in Clause 35 of the development agreement. [1][3]
  2. Whether the alleged dissolution of the respondent firm affected the arbitrator’s jurisdiction to entertain and decide the Petitioner’s claims. [2][3]

Arguments of the Parties

Respondent Nos. 2 and 3

  • They relied on the ex parte award dated 17 August 2021, which had dissolved the respondent firm. [2]
  • They contended that, because the firm was allegedly non-existent, Section 19 of the Partnership Act applied and the arbitrator lacked jurisdiction to entertain the Petitioner’s claims or make an award against the dissolved firm. [2]

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The Court found that the development agreement dated 27 February 2009 contained an arbitration clause between the Petitioner and the Respondent, specifically Clause 35. [3]

The parties had agreed that, upon appointment of a sole arbitrator, all contentions—including objections concerning jurisdiction and limitation—would remain open. Accordingly, the Court appointed a sole arbitrator without finally determining those objections. [3]

The appointment was made by consent, and the Court specified the arbitration venue, directed the arbitrator to file the required disclosure affidavit under Section 11(8)(i) of the Arbitration and Conciliation Act, 1996, and directed the parties to appear before the arbitrator. [4][5][6][7]

Holding and Implications

SOLE ARBITRATOR APPOINTED: By consent, Mr. A.S. Aguiar, a retired High Court Judge, was appointed as sole arbitrator to commence proceedings under the development agreement. [4]

The arbitration petition was disposed of on the stated terms, with the arbitrator’s fees payable under the Bombay High Court (O.S.) Rules, 2018, and with no order as to costs. [8][9][10]

The jurisdictional and limitation contentions were left open for determination in the arbitration. The opinion does not establish any broader precedent.

    Patidar Co-operative Housing Society Ltd. v. Retro Realtors And Others

    R.I. Chagla, J.:— Heard learned Counsel for parties.

    2. By this Arbitration Petition the Petitioner is seeking appointment of a Sole Arbitrator as per Section 11 of Arbitration and Conciliation Act, 1996 as amended in 2015. The arbitration clause is in clause 35 of the agreement for development of property dated 27 February, 2009. The notice invoking arbitration is dated 18 June, 2019. There is no reply to the notice invoking arbitration.

    3. There is an Affidavit in Reply dated 27 November, 2021 which has been tendered by the learned Counsel appearing for Respondent Nos. 2 and 3. In the Affidavit in Reply an award passed by learned Arbitrator in another proceedings concerning the partners of the Respondents has been referred to and by which award dated 17 August, 2021, the Sole Arbitrator has dissolved the Respondent firm. The award dated 17 August, 2021 is an exparte award as none appeared for the Respondents therein. The learned Counsel for the Respondent Nos. 2 and 3 has relied upon the award dated 17 August, 2021 to contend that the Respondent firm is dissolved and as the Respondent firm is non existent in view of the award having been passed, Section 19 of the Partnership Act, will come into play and the arbitrator has no jurisdiction to pass any award in respect of entertaining the claim of the Petitioner and pass any award against the dissolve firm.

    4. Having considered the submissions, it is clear from the agreement for development of the property dated 27 February, 2009 that there is an arbitration clause between the Petitioner and Respondent viz. clause 35 of the said Agreement. The parties have agreed that if a Sole Arbitrator is appointed all contentions of the parties including the contentions regarding jurisdiction and limitation be kept open. Hence the following order:—

    (i) By consent of parties Mr. A.S. Aguiar (Retired High Court Judge) to act as Sole Arbitrator to commence the arbitration proceedings under the agreement dated 27 February, 2009.

    (ii) The venue of arbitration shall be in Navi Mumbai of the said Agreement dated 27 February, 2009.

    (iii) Offce to inform the Sole Arbitrator regarding her appointment.

    (iv) The Sole Arbitrator is requested to file her Disclosure Affidavit of Arbitration under Section 11(8)(i) of the Arbitration and Conciliation Act, 1996 within a period of three weeks from the date of receipt of the notice issued by the Registrar Judicial-I and provide copies to the parties.

    (v) Parties to appear before the Sole Arbitrator on the date fixed.

    (vi) Fees of the Sole Arbitrator will be payable in accordance with the Bombay High Court (O.S.) Rules, 2018.

    (vii) Arbitration is disposed of in the above terms.

    (viii) No costs.

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    Comments

    Patidar Co-operative Housing Society Ltd. v. Retro Realtors And Others
    (Nov 29, 2021)