Alamelumangai vs Raja Alagurajan
- Court
- Madras High Court
Arb OP (Com.Div) No.579 of 2026
IN THE HIGH COURT OF JUDICATURE AT MADRAS
RESERVED ON : 30.10.2026
DELIVERED ON : 04.11.2026
CORAM :
THE HONOURABLE MR. SUSHRUT ARVIND DHARMADHIKARI,
CHIEF JUSTICE
Arb O.P(COM.DIV.) No. 579 of 2026
HCMA011997542026
CNR:{ }
1. Alamelumangai
W/o.Ashok Kumar,
255/1, M.K.G.Nagar, Maniyakranpalayam,
Ganapathy, Coimbatroe - 641 006.
2. P.Jeevanandam
Plot No.14, Anjal Nagar,
Third Main Street, Madurai - 625 018.
Petitioner(s)
Vs
Raja Alagurajan
S/o.Alagurajan,
Plot No.1935, I Block Flat No.3G,
Shalom Shelter, 38th Street,
5th Avenue, Anna Nagar West,
Chennai.
Respondent(s)
PRAYER: Petition filed under Section 11(6) of the Arbitration and
Conciliation Act, 1996 to appoint an Arbitrator in accordance with
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Arb OP (Com.Div) No.579 of 2026
Clause 29 of the Limited Liability Partnership Agreement dated
25.01.2021 entered between the petitioners and the respondent.
For Petitioner(s): Mr.K.V.Babu
For Respondent(s):Mr.R.R.Mohanaraja
ORDER
The petitioners have filed this petition under Section 11(6) of
the Arbitration and Conciliation Act, 1996 ("the Act") seeking the
appointment of a sole arbitrator to resolve commercial disputes
arising out of the Limited Liability Partnership (LLP) Agreement
dated 25.01.2021.
2.1. Succinctly put, the facts of the case are that the
petitioners and the respondent are business associates. Between
August 2018 and August 2019, the petitioners advanced a total sum
of Rs.64,00,000/- (Rs.32,00,000/- each) via bank transfers and
cash to fund the respondent's hotel management venture. Receipts
acknowledging these payments were issued under the entity names
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Arb OP (Com.Div) No.579 of 2026
Alankar Bhavan and Arulrajan Hotel Management Company Private
Limited.
2.2. To formalize the business structure and safeguard the
funds advanced, the parties entered into a Limited Liability
Partnership Agreement on 25.01.2021, constituting " Yohaan Hotel
Management LLP ". Under Clause 6 and Clause 33 of the LLP
Agreement, the contributions of the petitioners were formally
recognized as pre-formation capital/loans. Furthermore, Clause 8
vested the day-to-day administrative control exclusively with the
respondent and one Vidhyalakshmi.
2.3. The petitioners assert that the respondent failed to
provide operational accounts or share business returns. On
22.07.2023, a joint meeting was held where options for exit or
business transfer were recorded in the Minutes of the Meeting.
Subsequently, the respondent issued two cheques of Rs.10,00,000/-
each to the petitioners on 26.02.2024 and 27.02.2024. According to
the petitioners, these payments covered only accrued interest. As
the principal balance remained unpaid, the petitioners issued a
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Arb OP (Com.Div) No.579 of 2026
notice under Section 21 of the Act on 29.06.2026, invoking the
arbitration clause.
3. Learned counsel for the petitioners submitted that Clause
29 of the LLP Agreement explicitly provides for dispute resolution
through arbitration. It was argued that the liability was
acknowledged in Clause 33 of the LLP Agreement and further
confirmed by the part-payments made via cheques.
4.1. Per contra, learned counsel for the respondent argued
that the claims are non-arbitrable as the matter was settled during
the meeting on 22.07.2023. He further submitted that the agreed
settlement amount of Rs.10,00,000/- to each petitioner had already
been paid in full.
4.2. It was further contended that the business suffered
severe financial losses due to the COVID-19 pandemic. Under
Clause 11 of the LLP Agreement, the petitioners are required to
share operational losses in proportion to their capital contribution.
Therefore, the respondent asserted that no further sums are due.
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Arb OP (Com.Div) No.579 of 2026
5. Refuting the aforesaid submission made by learned counsel
for the respondent, learned counsel for the petitioners submitted
that while the respondent claims full settlement under the Minutes
of Meeting dated 22.07.2023, the respondent's reply letter dated
12.08.2026 to the Section 21 notice explicitly acknowledged Clause
29 and expressed willingness to submit to arbitration. Therefore,
the dispute cannot be treated as settled or non-arbitrable.
6. This Court has heard the submissions of both counsel and
examined the documents on record.
7. The scope of examination under Section 11(6) of the Act is
confined to verifying the existence of a valid arbitration agreement.
In the present case, the execution of the LLP Agreement dated
25.01.2021 and the presence of Clause 29 are undisputed.
8. The respondent's main defence is that the dispute was
resolved under the Minutes of Meeting dated 22.07.2023 following
partial payments. However, this argument is untenable. In the
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Arb OP (Com.Div) No.579 of 2026
written reply dated 12.08.2026 issued in response to the
petitioners' Section 21 notice, the respondent expressly admitted
the arbitration clause. The respondent stated:
"Furthermore, my clients admit to Clause 29 of the
registered LLP Agreement... In full compliance with
the agreed terms, my clients hereby formally
nominate Hon. Retd. Justice Dr. T. Mathivanan as
potential Arbitrator..."
9. Having explicitly acknowledged the arbitration agreement
and expressed readiness to arbitrate in the written reply dated
12.08.2026, the respondent cannot now claim that the dispute is
non-existent or settled. Issues concerning audit of accounts, loss-
sharing under Clause 11, and adjustment of payments pertain to
the merits of the claims. In the light of well settled position of law,
all such factual and financial contentions must be determined by the
Arbitral Tribunal.
10. In view of the valid arbitration clause and the written
concurrence of the respondent to arbitrate, the petition is allowed
and the following directions are issued:
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Arb OP (Com.Div) No.579 of 2026
(i) Mr.V.P.Raman, an Advocate, having office at
No.9/3, 2nd Floor, Krishna Avenue, 4th Street,
Abhiramapuram, Chennai - 600 018, residing at
Chennai, is appointed as the Sole Arbitrator to
adjudicate the disputes between the parties arising
out of the Limited Liability Partnership Agreement
dated 25.01.2021.
(ii) The learned Arbitrator shall file the disclosure
declaration required under Section 12(11) of the Act
before entering upon the reference.
(iii) The seat and venue of the arbitration shall be
Chennai.
(iv) The arbitration proceedings shall be conducted
under the aegis of the Madras High Court Arbitration
Centre in accordance with the Madras High Court
Arbitration Proceedings Rules, 2017. The arbitral fee
and administrative charges shall be governed by the
Madras High Court Arbitration Centre Rules, 2017,
and borne equally by the parties.
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Arb OP (Com.Div) No.579 of 2026
(v) All contentions, counterclaims, and defenses on
merits are left open to be raised before the learned
Arbitrator.
There shall be no order as to costs.
(SUSHRUT ARVIND DHARMADHIKARI,CJ)
04.11.2026
Index : Yes/No
Neutral Citation : Yes/No
sasi
To
The Assistant Registrar,
Madras High Court Arbitration Centre,
Chennai-600 104.
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Arb OP (Com.Div) No.579 of 2026
THE HON'BLE CHIEF JUSTICE
(sasi)
Arb O.P(COM.DIV.) No.579 of 2026
04.11.2026
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