Tag Archives: #Arbitration and Conciliation Act

Karnataka High Court

Jameela v. Sullia Afsa @ Hafsa.B & ors.

Bench- HON’BLE MR JUSTICE S.G.PANDIT 

CIVIL MISC. PETITION NO.500 OF 2021

Decided On 16-05-2023

Facts of the case-

The petitioner in this case claims to be the second wife of the late Hajee S. Ibrahim, whom she married on 14.05.2016. After the death of his first wife, Hajee S. Ibrahim married the petitioner. Hajee S. Ibrahim passed away on 23.09.2020 due to Covid-19, leaving behind the petitioner and two children, including the first respondent.

The petitioner alleges that Hajee S. Ibrahim, in order to establish a hospital and medical center in Aryapu village of Puttur Taluk, entered into a partnership with the respondents. The partnership deed was registered on 13.08.2020, and certain properties were contributed to the partnership firm by the respondents as their share of capital. The petitioner, as the second wife and legal representative of the deceased, requested the respondents to dissolve the partnership and divide the firm’s properties. However, the respondents refused to do so.

The petitioner, after the respondents’ refusal, approached the court seeking the appointment of a District Judge as a sole arbitrator under Section 11(5) and (6) of the Arbitration and Conciliation Act, 1996. The petitioner requested the arbitrator to arbitrate the dispute between the parties according to the terms of the partnership deed.

The respondents contested the petitioner’s claim of being the wife of the late Hajee Ibrahim. They argued that the petitioner was not married to Hajee Ibrahim but worked as a maid in his house. Therefore, unless the petitioner can establish her status as Hajee Ibrahim’s wife, she cannot seek the appointment of an arbitrator.

Relevant Provision

Arbitration and Conciliation Act, 1996	Related to
Sec. 11	Appointment of arbitrators.

Judgement

The court emphasized that the partners of a firm are bound by the clauses of the partnership deed, as long as they are not contrary to the law. In this case, since the partnership deed specifies the appointment of an arbitrator, the arbitrator has the authority to resolve any disputes based on the provisions of the partnership deed.

The court highlighted that the partnership deed clearly states that in the event of the death of the first partner (Late Hajee Ibrahim), the firm shall not be dissolved, but instead, it will continue with the remaining partners, and the deceased partner’s share of profit, capital account balance, and assets will be transferred equally to the remaining partners. Therefore, based on the terms of the partnership deed, the petitioner cannot seek the dissolution of the firm or claim a partition of its assets.

Regarding the status of the petitioner as a legal representative, the court pointed out that according to Section 40 of the Arbitration and Conciliation Act, 1996, a legal representative can enforce an arbitration clause. However, since the respondents have disputed the petitioner’s status as the second wife of Late Hajee S. Ibrahim, it needs to be determined whether the petitioner qualifies as a legal representative.

The court referred to a Supreme Court judgment (Vidya Drolia and others vs. Durga Trading Corporation, 2021) which identified the subject matters that are arbitrable and those that are not. In the present case, the status of the petitioner as a legal representative is in dispute, and it is yet to be established whether she is indeed one of the legal representatives of Late Hajee S. Ibrahim. 

The court noted that there is a pending partition suit filed by the petitioner, in which her status will be determined. Only after the petitioner’s status as a legal representative or the wife of Late Hajee Ibrahim is established, and if there is an arbitrable dispute, can the petitioner invoke the arbitration clause.

Given the provision in Clause-13 of the partnership agreement, which does not allow for the dissolution of the partnership firm upon the death of the first partner but instead mandates the transfer of the deceased partner’s share to the remaining partners, the court concluded that the petitioner, who claims to be the second wife of Late Hajee Ibrahim, the first partner of the firm, cannot seek the dissolution of the firm or the partition of its properties.

Therefore, the court held that the petitioner is not entitled to the appointment of an arbitrator based on the facts and legal provisions presented in the case.

JUDGEMENT REVIEWED BY ABHAY SHUKLA

Click here to view judgement

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