USE OF WORDS “EVERY EFFORT TO ARBITRATE” CONSTITUTES A VALID ARBITRATION CLAUSE: MANIKA SETT v SETT IRON FOUNDRY & ORS[1]
27 September 2022
Brief Facts
The Calcutta High Court has held that a contractual clause stipulating that parties should make
“every effort” to arbitrate constitutes a valid arbitration clause.
The Petitioner, one of the partners in a partnership firm, expressed her intention to retire. In order
to settle the disputes arising out of her retirement, the Petitioner issued an arbitration notice to
the other partners under Clause 18 of the Partnership Deed, which stipulated that:
“In the event of any dispute arising between the partners, in the conduct of the business
or as to the interpretation, operation or enforcement of the terms of the partnership deed,
such partner shall be free to seek interference of the Court for remedy although every
effort should be made by the partners to settle the dispute by arbitration.”
The other partners denied the existence of an obligatory arbitration mechanism under the
Partnership Deed. The Petitioner accordingly approached the Calcutta High Court for the
appointment of an arbitrator.
Contentions
