Arbitration agreement survives a partner's death, allowing legal heirs to invoke the clause in partnership accounts and dissolution disputes.
An arbitration agreement survives the death of a partner and remains enforceable by or against the legal representatives of the deceased. Legal heirs, though not signatories to the partnership deed, may invoke the arbitration clause where the underlying right to sue survives, including claims for rendition of accounts and disputes concerning dissolution of the partnership. Read with the Partnership Act, the deed did not exclude heirs from arbitration, so the dispute remained arbitrable and the heirs were bound by and entitled to rely on the agreement.
Issues: Whether the legal heirs of a deceased partner, though non-signatories to the partnership deed, are bound by the arbitration clause and entitled to invoke it because the right to sue for rendition of accounts survives.
Analysis: Section 40 of the Arbitration and Conciliation Act, 1996 makes it clear that an arbitration agreement is not discharged by the death of a party and remains enforceable by or against the legal representatives of the deceased. A legal representative represents the estate of the deceased, and the binding effect of an arbitral award extends to parties and persons claiming under them. Read with Sections 46 and 48 of the Partnership Act, 1932, the right to sue for rendition of accounts survives to the legal heirs, and the partnership dispute concerning dissolution and accounts remains arbitrable. The language of the partnership deed does not exclude legal heirs from invoking the arbitration clause.
Conclusion: The legal heirs of the deceased partner are bound by and entitled to invoke the arbitration agreement, and the right to sue survives in their favour.
Final Conclusion: The High Court committed no error in holding the dispute referable to arbitration, and the challenge to that view failed.
Ratio Decidendi: An arbitration agreement survives the death of a party and is enforceable by or against the deceased party's legal representatives where the underlying right to sue survives, including in partnership disputes relating to accounts and dissolution.
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