Partnership arbitration and interim protection can survive a named arbitrator's death and restrain disruption to business operations.

A partnership arbitration clause remained enforceable despite the death of the named arbitrator, because the agreement covered disputes arising from the partnership and the vacancy could be filled under the applicable appointment mechanism. Interim protection was also justified where long-standing conduct showed that the appellant alone operated the firm's bank account with the partners' consent, effectively varying the original arrangement. Unilateral interference that would stop wages, taxes, utilities and other business obligations was found inconsistent with partners' duties of good faith and common advantage, so restraint was warranted to preserve the business pending arbitration.

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Issues: (i) Whether the death of the named arbitrator rendered the arbitration clause in the partnership deed unenforceable and the section 9 application not maintainable; (ii) whether interim protection was justified to permit the appellant to operate the firm's bank account and restrain interference with the running business.

Issue (i): Whether the death of the named arbitrator rendered the arbitration clause in the partnership deed unenforceable and the section 9 application not maintainable.

Analysis: The arbitration clause was drafted in wide terms to cover all disputes arising out of the partnership and its interpretation. The mere death of the named arbitrator did not extinguish the underlying arbitration agreement, because the vacancy could be supplied under the relevant provisions governing appointment where the named arbitrator is unable to act. The existence of an arbitrable dispute was also evident from the parties' dispute over control of the bank account and conduct of partnership business.

Conclusion: The preliminary objection was rejected, and the arbitration agreement remained enforceable.

Issue (ii): Whether interim protection was justified to permit the appellant to operate the firm's bank account and restrain interference with the running business.

Analysis: The court found that the bank account had long been operated solely by the appellant with the consent and conduct of the partners, amounting to a valid variation of the original arrangement under the Partnership Act. The respondents' unilateral direction to stop payments was held to be inconsistent with the duties of partners to act for the greatest common advantage, to be just and faithful, and to permit consultation before ordinary matters are decided. The stoppage of the account threatened wages, taxes, utilities, contractual obligations, and the continuity of the business, so the balance of convenience and irreparable injury favoured interim relief.

Conclusion: Interim relief was warranted, and the appellant was entitled to exclusive operation of the firm's bank account with restraint against interference by the respondents.

Final Conclusion: The impugned order was set aside, and protective interim relief was granted to preserve the partnership business pending arbitration.

Ratio Decidendi: In a partnership, a long-standing course of dealing may validly vary the mode of business management, and a majority of partners cannot, without effective consultation, good faith, and regard to the firm's welfare, unilaterally take action that cripples the firm's operations; such conduct can be restrained under section 9 of the Arbitration and Conciliation Act, 1996 when it threatens imminent and irreparable harm.

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