TaxTMI 
TaxTMI 
2025 (2) TMI 1789
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....rt in Case No. Arb. A./6/2024 dated 22.10.2024 whereby the High Court allowed the appeal filed by the respondents herein under Section 37(1)(a) of the Arbitration and Conciliation Act, 1996 (for short, "Act of 1996") and thereby quashed and set aside the order dated 09.08.2024 passed by the Civil Judge (Sr. Div.), Dibrugarh in Misc. (J) Case No. 206/2024 arising out of Commercial Suit No. 02/2024 ("impugned judgment"). 2. We heard Ms. Shagufa Salim, learned counsel appearing for the petitioners and Mr. Pavan Kumar Chaturvedi, learned counsel appearing for the respondents. 3. This litigation originates from a dispute between a partner of a partnership firm consisting the legal heirs of another deceased partner. The partnership firm con....
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....fter provided. The death or retirement of any partner shall not have the effect of dissolving the partnership which will continue between the other partners and one of the heirs or one of the representatives of the deceased partner if so agreed. This partnership can be dissolved by any party giving two months' notice in writing to the other of his/her intention to do so, by common consent the partnership can be dissolved at any time." 5. It further observed that clause no. 15 of the partnership deed specifies the circumstances under which the parties may resort to arbitral proceedings. It held that the dispute between the parties pertains to the affairs of the partnership firm, specifically its dissolution. Since this particular circumst....
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....el & Anr., reported in (2008) 13 SCC 667, squarely covers the facts of the present case. This Court held that an arbitration agreement does not cease to exist on the death of any party and the arbitration agreement can be enforced by or against the legal representatives of the deceased. The Court emphasized on the definition of a 'legal representative' under Section 2(1)(g) of the Act of 1996 to hold that an arbitral agreement and the award is enforceable by or against the legal representatives of the deceased. The relevant observations are reproduced hereinbelow:- "18. It is clear from Section 40 of the Arbitration Act that an arbitration agreement is not discharged by the death of any party thereto and on such death it is enforce....
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....orce the award and are also bound by it. The arbitration agreement is enforceable by or against the legal representative of a deceased party provided the right to sue in respect of the cause of action survives. xxx 27. We are of the opinion that in view of the provisions of Section 46 read with Section 48 of the Partnership Act as well as Section 40 of the Arbitration and Conciliation Act, 1996, the application for appointment of an arbitrator under the arbitration clause of the partnership deed was liable to be allowed and the learned Chief Justice has erred in overlooking the said provisions. While right to sue for rendition of accounts of partnership firm survives on the legal representative of a deceased partner, he is....
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....ring the lifetime of Dulari Devi which is also well settled that where a dispute is referable to arbitration, the parties cannot be compelled to take recourse to in the civil courts." (Emphasis supplied) 9. In Jyoti Gupta v. Kewalsons & Ors., reported in 2018 SCC OnLine Del 7942, the High Court of Delhi also held that an arbitration agreement does not stand discharged on the death of a partner and it can be enforced by the legal heirs of the deceased-partner. It categorically held that merely because the arbitration agreement refers to the disputes between 'partners', it cannot bar the legal heirs from seeking their remedies by virtue of the arbitration agreement. The relevant observations are reproduced hereinbelow:- "12. A ....