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TMI Blog2007 (4) TMI 624X X X X Extracts X X X X X X X X Extracts X X X X ..... lause 16 of the said Deed relates to settlement of disputes. The said clause is extracted below : "16) If during the continuance of the partnership or at any time afterwards any dispute touching the partnership arises between the partners, the same shall be mutually decided by the partners or shall be referred for arbitration if the parties so determine." (Emphasis supplied) 3. The first respondent filed the application for appointment of an Arbitrator to decide the disputes in regard to dissolution of the said partnership firm and for rendition of accounts. In the said application, the first Respondent arrayed the appellant herein as the first respondent. Respondents 2 to 6 herein were al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the scope of the proceedings was limited to the extent of examining whether it was a case for appointment of Arbitrator or not, and it was for the Arbitrator to decide whether Respondents 2 to 6 were liable or not. Justice Santosh Duggal, a retired Judge, was appointed as the sole Arbitrator. 5. The appellant has challenged the said order appointing the Arbitrator. It is submitted that the power under section 11 of the Act, to appoint an Arbitrator, can be exercised only if there is a valid arbitration agreement between the parties, and that as there is no arbitration agreement between the parties, the Arbitrator could not have been appointed. Strong reliance was placed by the Appellant on the decision in Wellington v. Kirit Mehta [2000 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on (4) provides that an arbitration agreement is in writing, if it is contained in - (a) document signed by the parties; or (b) in an exchange of letters, telex, telegrams or other means of telecommunication which provide a record of the agreement; or (c) an exchange of statements of claim and defence in which the existence of the agreement is alleged by one party and not denied by the other. 8. This Court had occasion to refer to the attributes or essential elements of an arbitration agreement in K K Modi v. K N Modi [1998 (3) SCC 573], Bharat Bhushan Bansal vs. U.P. Small Industries Corporation Ltd. [1999 (2) SCC 166] and Bihar State Mineral Development Corporation v. Encon Builders (I)(P) Ltd. [2003 (7) SCC 418]. In State of Orissa v. D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an arbitration agreement if it has the attributes or elements of an arbitration agreement. They are : (a) The agreement should be in writing. (b) The parties should have agreed to refer any disputes (present or future) between them to the decision of a private tribunal. (c) The private tribunal should be empowered to adjudicate upon the disputes in an impartial manner, giving due opportunity to the parties to put forth their case before it. (d) The parties should have agreed that the decision of the Private Tribunal in respect of the disputes will be binding on them. (iii) Where the clause provides that in the event of disputes arising between the parties, the disputes shall be referred to Arbitration, it is an arbitration agreement. Where ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not intended to be an arbitration agreement. Similarly, a clause which states that "if the parties so decide, the disputes shall be referred to arbitration" or "any disputes between parties, if they so agree, shall be referred to arbitration" is not an arbitration agreement. Such clauses merely indicate a desire or hope to have the disputes settled by arbitration, or a tentative arrangement to explore arbitration as a mode of settlement if and when a dispute arises. Such clauses require the parties to arrive at a further agreement to go to arbitration, as and when the disputes arise. Any agreement or clause in an agreement requiring or contemplating a further consent or consensus before a reference to arbitration, is not an arbitration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stion of exercising power under section 11 of the Act to appoint an Arbitrator does not arise. 10. Learned counsel for the first respondent next contended that clause 16 of the deed of partnership discloses a clear intention on the part of the partners to settle their dispute relating to partnership by an alternative dispute resolution process. He pointed out that clause 16 required the partners to "mutually decide the disputes" or "refer the disputes to arbitration". This, according to him, is in the nature of a 'con-arb' agreement, that is, it requires the parties to settle the disputes by negotiations (conciliation and mediation), and failing settlement by such negotiations, refer the disputes to arbitration for settlement. He submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X
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