01Facts
The petitioners stated that they advanced a total of ₹64 lakh to fund the respondent’s hotel-management venture and that the parties later formalised their business arrangement through an LLP Agreement dated 25 January 2021.
p. 2The agreement recognised the contributions as pre-formation capital or loans and contained an arbitration clause in Clause 29
p. 2After disputes arose over accounts, returns and repayment, the parties met on 22 July 2023.
pp. 3–4The respondent asserted that the meeting resulted in a full settlement, while the petitioners maintained that subsequent payments of ₹10 lakh to each petitioner represented interest only
pp. 3–4Following a Section 21 notice dated 29 June 2026, the petitioners applied under Section 11(6) of the Arbitration and Conciliation Act, 1996, for appointment of an arbitrator
p. 3, 502Issues
i.1. Whether a valid arbitration agreement existed between the parties for disputes arising from the LLP Agreement.
pp. 5–6ii.2. Whether the respondent’s alleged settlement, payments and loss-sharing defence prevented referral of the dispute to arbitration at the Section 11 stage.
pp. 4–603Law Applied
Section 11(6) of the Arbitration and Conciliation Act, 1996, governed the application for appointment of an arbitrator.
p. 5The Court stated that its inquiry at this stage was confined to verifying the existence of a valid arbitration agreement.
p. 5Disputes concerning accounts, loss-sharing and adjustment of payments were matters on the merits for the arbitral tribunal, rather than issues to be determined in the appointment proceedings.
p. 6No judicial precedents were cited.
Provisions in the judgment · 3 · Linked ones open on LawLens
Arbitration and Conciliation Act, 1996 Section 11Section 21Section 12
04Reasoning
The LLP Agreement’s execution and Clause 29 were undisputed, establishing an arbitration agreement for the purposes of the Section 11 inquiry.
p. 5The Court rejected the respondent’s settlement objection at this stage, noting that his written reply to the Section 21 notice admitted Clause 29 and expressed readiness to arbitrate.
pp. 5–6Whether the meeting settled the claims, whether losses were to be shared under Clause 11, and how the payments should be treated involved factual and financial questions reserved for the tribunal.
p. 605Holding
The Court allowed the petition and appointed Mr. V.P. Raman, Advocate, as sole arbitrator to adjudicate disputes arising from the LLP Agreement dated 25 January 2021.
pp. 6–7It fixed Chennai as the seat and venue, directed that the arbitration proceed under the aegis of the Madras High Court Arbitration Centre, and left all merits-based contentions, counterclaims and defences open.
p. 7No order was made as to costs.
p. 8Original Court PDF
AlamelumangaivsRaja Alagurajan
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