Arbitration agreement enforceable by/ against the heirs of deceased

Priya Rishi Bhuta Vs Vardhaman Engineers and Builders (Bombay High Court)

Held that agreement would not be discharged by death of the party thereto and will be enforceable by or against the heirs of the deceased. Accordingly, present arbitration application allowed.

Facts-

Respondent No. 1 is a partnership firm. The parents of the applicants were partners in the Respondent No. 1 which was reconstituted vide a Partnership Deed dated 12.03.2012. Clause 17 of the Partnership Deed provided that on the death of any partner his interest in the firm would pass on to his heir. Whereas, Clause 19 of the deed was the arbitration clause.

Soon after the death of the applicant’s parents, the firm was reconstituted vide a ‘Deed of Retirement-cum-Partnership’ dated 17.01.2019 whereby the interest of the parents of the applicants was distributed between respondent no. 2 and respondent no. 3, the brothers of the applicants who were already partners in the firm.

Please become a Premium member. If you are already a Premium member, login here to access the full content.