Court rejects non-arbitrability and accord and satisfaction objections, emphasizes broadening arbitrator pool for impartiality and expertise
In a significant judgment delivered on October 9, 2026, the Gujarat High Court, presided over by Mr. Justice D.N. Ray, allowed a petition under Section 11(5) of the Arbitration and Conciliation Act, 1996, appointing a sole arbitrator to resolve disputes arising from a dissolved partnership. The case, Shilpaben Shah and others v. Jasmin Pravinchandra Shah, involved the legal heirs of a deceased partner seeking settlement of accounts and distribution of assets following the death of Shri Sanjay Pravinchandra Shah, one of the two partners in M/s. Corus Metal.
The partnership deed dated June 29, 2020, contained a clause mandating arbitration of all disputes related to the firm. After the death of Shri Sanjay on December 4, 2025, the petitioners invoked the arbitration clause to resolve disputes regarding the deceased partner's share in the sale proceeds of partnership property and capital accounts. The respondent opposed arbitration, contending that the disputes were non-arbitrable and the partnership deed ceased to operate after the partner's death.
Rejecting these contentions, the Court relied on binding Supreme Court precedents, including SBI General Insurance Co. Ltd. vs. Krish Spinning (2024 SCC Online SC 1754), holding that objections on grounds of accord and satisfaction or non-arbitrability are not sustainable at the appointment stage under Section 11(5). The Court observed that the partnership dissolution by death did not negate the arbitration agreement, and thus the petition for appointment of an arbitrator deserved to be allowed.
Importantly, the Court highlighted the need for the appointing authority to consider the qualifications agreed upon by parties and to ensure the appointment of an independent and impartial arbitrator as mandated by Section 11(8) of the Arbitration Act. Citing the Supreme Court's guidance in Voestalpine Schienen GmbH v. Delhi Metro Rail Corporation Ltd. (2017) 4 SCC 665, the Court emphasized that arbitration panels should be broad-based, including not only lawyers and judges but also technical experts to effectively address technical disputes.
The Court further noted an empirical study by the Milon K. Banerji Centre for Arbitration Law, NALSAR University, which revealed under-representation of women (only 29.97%) and technical experts (3.10%) in court-appointed arbitrations in 2025. Without compromising on competence, integrity, and independence, the Court urged parties, counsel, and arbitral institutions to widen the pool of arbitrators to include qualified women and technical experts, thereby promoting diversity and enhancing the quality of arbitration.
Consequently, the Court appointed Hon'ble Mrs. Justice Mauna M. Bhatt, former Judge of the Gujarat High Court, as the sole arbitrator to adjudicate the disputes in accordance with the Arbitration Centre (Domestic and International), High Court of Gujarat Rules, 2021. The order directs the Registry to communicate the appointment immediately and disposes of all connected applications with no order as to costs.
This judgment reinforces the judiciary's commitment to uphold arbitration agreements and ensures that arbitration remains an effective and impartial dispute resolution mechanism. It also marks a progressive stance towards inclusivity in arbitration appointments, encouraging the integration of diverse expertise and gender representation in the arbitral process.
Bottom Line:
Arbitration and Conciliation Act, 1996 - Section 11(5) petition for appointment of arbitrator arising out of disputes under partnership deed - Objection as to accord and satisfaction held unsustainable at referral stage in view of Supreme Court precedent - Sole Arbitrator appointed - Court also observed that while competence, integrity and independence remain paramount, parties, counsel and arbitral institutions should widen the pool of arbitrators to include qualified women and technical experts.
Statutory provision(s):
Arbitration and Conciliation Act, 1996 - Sections 11(5), 11(8), 21
Shilpaben Shah v. Jasmin Pravinchandra Shah, (Gujarat) : Law Finder Doc Id # 3012551
