Unregistered partnership deed and firm vs. arbitration proceedings by one partner
S.Raghavendra
(Querist) 02 December 2011
This query is : Resolved
Facts :- A, B, C entered into a partnership deed for running a totorials under the name 'ABC' tutorials (so called partnership firm) in 2003. The said deed and the firm are not registered under partnership act or under any other acts. The said tutorials did not run, not even for six months as any of the partner were able to invest the agreed amount. All of them kept quiet and not bothered to dissolve the firm in writing. Now ‘C’ in 2011 i.e. after lapse of approximately 7 years gives a notice to ‘A’ and ‘B’ asking for his salary, remuneration and share in profits from 2003. (note : A and B also did not continue the tutorials). He also referred about arbitration proceedings in his notice, mentioning about an arbitrator’s name and address and a date to attend the same in his notice.
1) Whether Sec.69 of partnership act is effective even to the arbitration proceedings?
2) Whether an arbitrator can be appointed in these kind of cases where the partnership deed and firm are not registered?
3) How to avoid arbitration proceedings or defend A and B from arbitration proceedings?
4) What to refer or study in order to gain knowledge about avoiding arbitration or fight in arbitration to save A and B.
adv. rajeev ( rajoo )
(Expert) 02 December 2011
M/S.Indian Oil Corporation ... vs M/S.Devi Constructions on 2 April ...
2 Apr 2009 ... Section 69(3) in The Indian Partnership Act, 1932 ... Indian Partnership Act, 1932, also includes an arbitration proceeding ... The provisions of Section 69 cannot be made applicable to the reference to arbitral proceedings and ...
Refer this case.
adv. rajeev ( rajoo )
(Expert) 02 December 2011
It can also be referrred:
Applicability of S 69(3) of the Partnership Act to Arbitration- Part II
9 Dec 2010 ... It is true that the arbitral proceedings would not be maintainable at the instance ... provisions contained in Section 69 of the Indian Partnership Act, 1932. ... We had also analysed a two bench judgement of the Madras High Court in ... Every interpretation of Section 69 of the Partnership Act must give effect to....
practicalacademic.blogspot.com/.../applicability-of-s-693-of-partnership_09. html
Devajyoti Barman
(Expert) 02 December 2011
After what Mt Rajoo has comprehensively replied in your query, I have nothing to add more.
Raj Kumar Makkad
(Expert) 02 December 2011
I have also similar opinion as of Rajeev.
Jai Karan Nagwan
(Expert) 03 December 2011
Dear All, there are two diferent queries being mixed in one. one is Section 69, which is ruled out being not registered, however deed can be used for collateral purpose.
Secondly Arbitration clause invoked by one can not be avoided and defended against both.
However, if suit for recovery is filed by C, in that case A & B could have invoked the arbitraton clause, but A& B can not defend arbitration.in the present situation.
C knows that he may not succeed in suit against A &B read with section 69, that is the reason C invoked the arbitration clause.
Sivadas Chettur
(Expert) 04 December 2011
I agree that section 69 puts an embargo on the arbitral proceedings in view of the provision in sec 69(3) of the 1932 act. The appointment of the arbitrator also should be acceptable to all parties and C cannot unilaterally appoint arbitrator.
