Can arbitration clause affect the deed?

This query is : Resolved 

09 December 2013

Hello Everyone

Two partners made an Partnership Deep to run a business at 50 % share equally. After some time partner A found that partner B is cheating ans sold the flats of the property to third party and earn some consideration in fraud business account. partner A filed a suit for specific performance in a civil court against partner B to compel the conditions made in partnership deed.

now the partner B's advocate taking advantage of clause which is in the partnership Deed. that is, if in future any disputes between the partners arises the dispute shall be refer to the arbitration.

partner A earlier filed the suit in Aribitration but not satisfies with the Arbitration proceeding and the case in Arbitration is pending. later he withdraw the case from Arbitration and files the new fresh suit in Civil court for justice.

My query is can he file the suit in Civil Court? under which provision? and what section? does any doctrine of precedent is available for him?

Please answer my query ASAP so partner A can get justice for his innocence.

SHIRISH PAWAR, 7738990900Online (Expert)
09 December 2013

Arbitration clause will survive and partner A has to approach / appoint arbitrator. Partner A can challenge the award if arbitrator is bias.

R.K NandaOnline (Expert)
09 December 2013

A will have to solve dispute by arbitrator only.

09 December 2013

If there is an "Arbitration Clause" was existence in a Deed, either party should have had to appoint an Arbitrator for a dispute arises between them, at the first instance and an aggrieved party of the said deed have a right to prefer an appeal as against passing an Award by the Arbitrator later.

Rajendra K Goyal Online (Expert)
09 December 2013

Well advised by the experts.

T. Kalaiselvan, Advocate Online (Expert)
09 December 2013

An appeal against the arbitrator's biased (?) order may be challenged/preferred for proper justice, there the violated clauses can be brought to light.

Shailesh Kr. ShahOnline (Expert)
09 December 2013

In case Partner ship deed contains arbitration clause then none of the partners have right to approach the civil court.

It advisable to you that File Suit under section 9 of the Arbitration and conciliation Act, 1996 for interim injunction.

V R SHROFF (Expert)
09 December 2013

Arbitration Clause does not have absolute Bar to file Civil suit. Partner can file Civil suit. [SC]

Shailesh Kr. ShahOnline (Expert)
10 December 2013

Shroff Sir,

Please give citation.


Raj Kumar MakkadOnline (Expert)
10 December 2013

I slightly differ with the opinion of shroff sir.

Sadhana Patil (Querist)
14 December 2013

Hello again !!!

another one thing which i would like to share with u, that the matter is pending before the civil court, and Partner B is still selling the flats from the said property and creates third party interest till date. Can Partner A file for Injunction or Stay in civil court to stop such illegal activity of Partner B? And what provisions are available for him? Please suggest. Thanks.

Shailesh Kr. ShahOnline (Expert)
14 December 2013

Have you filed section 9 application before the District Judge ?

and pray for injunction ?

Sadhana Patil (Querist)
16 December 2013

yes but after filing Sec.9 Application, the petitioner did not get the proper response for injunction.Petitioner was waiting for an injunction but did not get the positive response . It took almost 7 months. And after that he withdraw the case from Arbitration and filed a new fresh suit in Civil Court. His prays like
i) he is the partner of 50 % share of the suit property, which is to be declared by the Hon'ble court
ii) Development Agreement of the said property be executed in favour of the Plaintiff by the Hon'ble court.
iii) the defendant be restrained during the pendency of this suit interfering with the possession or the construction of the plaintiff.

The all above prays are mentioned in the civil suit (Specific Peformance).

My question is can Arbitration pass all the prayers or not?

Shailesh Kr. ShahOnline (Expert)
17 December 2013

Strictly "No".

The civit court will not entertain civil suit as per section 5 of the arbitration and conciliation act, 1996.

It is very strange to know that sec 9 application is pending about 7 months ?

Now-a-days, The civil court disposes sec 9 application in priority basis.

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