Disputes over partnership rights remain arbitrable despite the parties’ familial relationship.

The Applicant, represented by a guardian appointed by the Bombay High Court, relied on Clause 18 of a 1992 partnership deed and sought arbitration of disputes with the Respondents, including the accounting for Rs.25,00,000 received by the partnership firm in connection with the transfer of tenancy rights in Godown No. 20 and the Applicant’s claimed 50% share.

After the Respondents did not agree to appoint an arbitrator following the Applicant’s notice invoking arbitration dated 6 January 2026, the Applicant filed this application under Sections 11(5) and 11(6) of the Arbitration and Conciliation Act, 1996.

The Respondents objected, among other things, that the dispute was a family dispute, that the guardian lacked authority, and that the claim was time-barred.

1. Whether the disputes concerning the partnership funds, accounts and the Applicant’s claimed share prima facie fell within the arbitration agreement in Clause 18.

2. Whether the objections concerning the guardian’s authority and limitation warranted rejection of the Section 11 application.

Under Section 11 of the Arbitration and Conciliation Act, 1996, the Court’s enquiry is limited to a prima facie examination of the existence of the arbitration agreement; contested or laborious questions are ordinarily left to the arbitral tribunal.

The Court relied on ASF Buildtech Private Limited v. Shapoorji Pallonji and Company Private Limited, 2025 INSC 616, for that principle and for the approach to limitation at the Section 11 stage: the Court considers whether the application itself is time-barred, without ordinarily undertaking a detailed determination of limitation for each claim.

It also referred to Tarun Dhameja v. Sunil Dhameja & Anr., 2024 SCC OnLine SC 3715, in considering the operation of an arbitration clause in a partnership deed where the dispute arises from the partnership relationship.

Clause 18 of the partnership deed was not disputed, and the Applicant claimed accounts and a share in money received by the firm on the basis of his alleged rights as a partner. The Court held that the family relationship between the parties did not, by itself, convert a partnership-based claim into a non-arbitrable family dispute.

The admitted receipt of Rs.25,00,000 and the parties’ disagreement over the Applicant’s entitlement and the firm’s accounts established a live dispute within the clause’s scope, without requiring the Court to decide the merits of the claimed share.

The Respondents produced no material showing that the guardian’s appointment had been stayed or set aside, or that it barred him from protecting the Applicant’s interests; the allegation of suppression was also unsupported.

As the principal monetary dispute arose in December 2024, the Court found no apparent limitation bar to the application, while leaving limitation concerning particular claims to the tribunal.

It left the tribunal to decide the parties’ claims and defences, including entitlement, accounts, authority and limitation.

The parties were directed to bear the arbitral costs equally in the first instance, subject to the final award on costs.