Arbitration
5 months ago
I am a partner in a partnership firm . The partnership is at “WILL” these are two of the clauses in the partnership deed !!
DURATION OF FIRM: - That the duration of the partnership shall be at will,
ARBITRATION: - That if during the continuance of the partnership or at time afterwards any dispute touches the partnership business, constitution, relations among themseives arise the same shall be referred to two arbitrators who shall be appointed by the partners with mutual consent and whose decision shall be binding upon all the partners including him otherwise, the provisions of Arbitration Act shall govern all such dispute.
Can I dissolve the firm or consent of other partners is also required ?
A.Dear Client,
First of all, you cannot dissolve a partnership firm without the consent of other partners, even if the firm is at will. To dissolve a partnership firm in compliance with the provision of the partnership deed, a unanimous resolution between all the partners is required. However, when a provision for resolving the dispute through arbitration under the Arbitration and Conciliation Act, 1996 exists in the deed of partnership without exhausting the remedies to resolve the dispute, the application for dissolution of the partnership firm may or may not be allowed by the Registrar of Firms. A Notice under Section 21 of the Arbitration and Conciliation Act, 1996 is mandatory before referring the disputes to Arbitration. Under Section 11(6) of the Act, for the appointment of an arbitrator, the limitation period of three years for filing such an application would commence from the date when the cause of action arose. An arbitral award is final and binding upon the parties unless challenged under Section 34 of the Act. It is equivalent to a decree passed by a Civil Judge and is binding upon the parties. The enforcement procedure and execution decrees and an arbitral award in India are governed as per the provision of the Arbitration and Conciliation Act, 1996. Once the time for making an application to set aside the arbitral award under section 34 has expired or such an application has been refused, the award becomes final and binding on the parties/partners.
First of all, you cannot dissolve a partnership firm without the consent of other partners, even if the firm is at will. To dissolve a partnership firm in compliance with the provision of the partnership deed, a unanimous resolution between all the partners is required. However, when a provision for resolving the dispute through arbitration under the Arbitration and Conciliation Act, 1996 exists in the deed of partnership without exhausting the remedies to resolve the dispute, the application for dissolution of the partnership firm may or may not be allowed by the Registrar of Firms. A Notice under Section 21 of the Arbitration and Conciliation Act, 1996 is mandatory before referring the disputes to Arbitration. Under Section 11(6) of the Act, for the appointment of an arbitrator, the limitation period of three years for filing such an application would commence from the date when the cause of action arose. An arbitral award is final and binding upon the parties unless challenged under Section 34 of the Act. It is equivalent to a decree passed by a Civil Judge and is binding upon the parties. The enforcement procedure and execution decrees and an arbitral award in India are governed as per the provision of the Arbitration and Conciliation Act, 1996. Once the time for making an application to set aside the arbitral award under section 34 has expired or such an application has been refused, the award becomes final and binding on the parties/partners.
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A.Dear Client,
In a partnership at will, as indicated in the partnership deed, the partners have the flexibility to dissolve the firm at any time without specifying a fixed duration for the partnership. In your case, the partnership deed includes an arbitration clause, which means that if there is any dispute related to the partnership business, constitution, or relations among the partners, it should be referred to arbitration. The decision of the arbitrators, appointed by mutual consent of the partners, is binding on all partners. That "the duration of the partnership shall be at will" indicates that the partnership does not have a fixed duration and can be terminated at any time by any of the partners. If the partnership deed is silent on the dissolution procedure, the Indian Partnership Act, 1932, would apply. According to the Act, if the partnership is at will, any partner can give notice to other partners of their intention to dissolve the partnership. After the notice period, the partnership is considered dissolved.
In a partnership at will, as indicated in the partnership deed, the partners have the flexibility to dissolve the firm at any time without specifying a fixed duration for the partnership. In your case, the partnership deed includes an arbitration clause, which means that if there is any dispute related to the partnership business, constitution, or relations among the partners, it should be referred to arbitration. The decision of the arbitrators, appointed by mutual consent of the partners, is binding on all partners. That "the duration of the partnership shall be at will" indicates that the partnership does not have a fixed duration and can be terminated at any time by any of the partners. If the partnership deed is silent on the dissolution procedure, the Indian Partnership Act, 1932, would apply. According to the Act, if the partnership is at will, any partner can give notice to other partners of their intention to dissolve the partnership. After the notice period, the partnership is considered dissolved.
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