IN THE HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH Arbitration Case No. 123 of 2006 Date of Decision: 28.08.2009 Krishan Kumar ..Petitioner Versus Mr. Harish Khanna ..Respondent CORAM: HON'BLE MR. JUSTICE T.S.THAKUR,CHIEF JUSTICE 1.Whether Reporters of local papers may be allowed to see the judgment ? 2. Whether to be referred to the Reporters or not ? 3. Whether the judgment should be reported in the Digest? Present : Mr. Amit Rawal, Advocate, for the petitioner. Mr. Arun Jain, Sr. Advocate with Mr. Amit Jain, Advocate, for the respondent. ***** T.S.Thakur, C.J. (Oral) The parties are real brothers. Disputes in relation to certain partnership business which has since been wound up appear to have arisen between them. Clause 14(v) of the partnership-deed, execution whereof is not disputed, provides for adjudication of such disputes by way of arbitration, it reads:- “ That any dispute arising out of partnership business shall be referred for arbitration to any sole arbitrator to be nominated mutually by the parties hereto and the decision of the said arbitrator shall be final and binding on both partners.” Arbitration Case No. 123 of 2006 [2] It is common ground that respondent No.1 has already filed a suit for dissolution of the partnership and rendition of accounts which suit is pending before the Civil Judge (Junior Division), Ludhiana. The petitioner herein has in that suit filed an application under Section 8 of the Arbitration & Conciliation Act, 1996 ( for short ' the Act'), seeking a reference of the disputes between the parties to an Arbitrator in terms of a clause extracted above. The said application has not yet been disposed of. The present petition has in the meantime been filed for reference of the disputes to an Arbitrator to be nominated by this Court. Learned counsel for the petitioner submitted that execution of the partnership deed dated 10.06.1987 not being in dispute, the respondents cannot find fault with the prayer for reference of the disputes to an Arbitrator in terms of Clause 14(v) supra, no matter the respondent has tried to assert that the said arbitration clause had been inserted by the petitioner herein only as a formality. It was further submitted by him that although an application under Section 8 of the Act is pending before the Civil Court, in the suit for dissolution, sub section 3(8) of the Act would permit filing of an application and commencement of arbitration proceedings notwithstanding any such application. Sub Section 3 of Section 8 reads as under:- “ (3)Notwithstanding that an application has been made under sub-section(1) and that the issue is pending before the judicial authority, an arbitration may be commenced or continued and an arbitral award made.” There is in my opinion considerable merit in both the submissions urged on behalf of the petitioner. It is not in dispute that partnership-deed dated 10.06.1987 was executed between the parties. Arbitration Case No. 123 of 2006 [3] The respondent has while dealing with the arbitration clause contained in the said documents, asserted as under:- “ That the Arbitration clause is vague and not enforceable. The said clause is inserted in routine without there being any intention of the parties to refer the matter to arbitration. Except the submissions made herein-before which have been specifically replied, the other allegations made in para 1 of the petition are denied.” From the above, it is evident that the existence of the arbitration clause in the partnership deed is not in dispute. The argument appears to be that the said clause is vague and not enforceable and had been inserted in routine and that the parties had no intention to refer the matters in dispute to arbitration. There is in my opinion no merit in that submission. The arbitration clause is very clear and certain in terms of the nature of the disputes that can be referred for adjudication by arbitration as also in terms of the award made by the Arbitrator being final and binding upon the parties. The manner of nomination is also referred to in the arbitration clause in as much as the same has to be by mutual consent of the parties. In the circumstances, I see no reason why the arbitration clause should be held to be vague or unenforceable in law so also the contention that the clause was added only in routine needs to be noticed only to be rejected. In the result, I allow this application and refer the disputes between the parties and relating to the partnership business conducted by them to the sole arbitration of Justice Bakshish Kaur, former Judge of this Court. The Arbitrator shall be entitled to a fee of Rs. 10000/- per hearing subject to Arbitration Case No. 123 of 2006 [4] a maximum of Rs. 1,00,000/- ( Rs. One lac) to be deposited with the Arbitrator in equal proportions in terms of the direction which the Arbitrator shall be free to issue from time to time. (T.S.THAKUR) CHIEF JUSTICE 28.08.2009 'ravinder'