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Judgment
1) Heard Mr.L.J.Veera Reddy, learned counsel for the applicant. Also heard Ms.Shanti Sree, learned counsel for the respondents 1, 2 and 5. None appears for respondents 3 and 4 though the name of Mr.R.Janaki Ram, learned counsel for the respondent Nos.3 and 4 is printed in the cause list.
2) This is an application filed under Sections 11(5) and 11(6) of the Arbitration and Conciliation Act, 1996 read with Scheme for appointment of Arbitrator, 1996.
3) Respondent Nos. 1 and 2 have filed counter-affidavit. So also by respondent Nos.3 and 4. Respondent Nos. 3 and 4 in their counter affidavit have categorically stated that they have no objection for appointment of an arbitrator.
4) The petitioner is a partner along with respondents and the partnership deed at clause-14 provides that all disputes amongst the partners in the conduct of the partnership business shall be decided through arbitration. The petitioner had invoked the aforesaid arbitration clause by letter dated 14.01.2019 addressed to the present respondents in connection with disputes indicated in the same letter and had also nominated one Mr.K.Raja Reddy, retired Junior Civil Judge as a sole arbitrator to resolve the disputes between them and had called upon them to accord approval for the nomination within a period of 15 days, failing which it was indicated that the petitioner would take appropriate legal recourses.
5) Relying on the paragraph 15 of the counter-affidavit, it is submitted by Ms. Shanti Sree that there are serious disputes about the financial transactions made by the applicant, his son and the payment of one time settlement amount made to the Bank and, therefore, the same cannot be effectively adjudicated by the sole arbitrator and that the appropriate and effective remedy for the applicant would be to approach the competent civil court.
6) The fact that there is an arbitration clause is not in dispute and that there is existence of disputes is also admitted by the respondents. Whether the dispute is of serious nature or otherwise is not a matter to be considered. When there is an arbitration clause, the question of relegating the parties to the civil court in respect of disputes amongst the partners does not arise.
7) In that view of the matter, Sri T.Venugopal Rao, retired District Judge, residing at D.No.54-14/2-3B, Plot No.52, R.No.1-A, Srinivasa Nagar, Bank colony, Vijayawada-520 008, is appointed as Arbitrator.
8) Accordingly, the Arbitration Application is disposed of. No costs. Pending miscellaneous applications, if any, shall stand closed.