Keywords: Arbitration Agreement, Joint Venture, Constituents, Patna High Court
The Patna High Court has recently ruled that a Joint Venture’s arbitration agreement cannot be invoked
by its constituents. This decision came as the court was dealing with a petition under Section 11 of the
Arbitration and Conciliation Act, 1996, seeking the appointment of an arbitrator. The court stated that
only the Joint Venture, being a separate legal entity and a party to the arbitration agreement, could
invoke arbitration and not the petitioner, who was only one of the constituents of the Joint Venture.
The case involves a Joint Venture comprising M/s REW Contracts Pvt Ltd and M/s A.K. Das Associates
Ltd, who executed certain contracts with the respondent, Bihar State Power Transmission Co. Ltd.
After certain disputes arose under the contracts, the petitioner invoked the arbitration clause and
filed a petition under Section 11 of the A&C Act before the Patna High Court. The respondent, Bihar
State Power Transmission, contended that only the Joint Venture could invoke the arbitration clause
and not the petitioner, who was only one of the constituents of the Joint Venture.
The court observed that the contracts were executed between the respondent-company and the Joint
Venture, comprising M/s A.K. Das Associates, who was the lead partner of the Joint Venture, and the
petitioner, M/s REW Contracts. While reckoning that it was not the Joint Venture who had initiated
the arbitration request, the court held that one of the constituents of the Joint Venture cannot be
considered as a ‘party’ to the agreement enabling such ‘party’ to make a request for arbitration.
The bench further observed that the power of attorney authorizing the Director of the petitioner-
company to initiate arbitration was conferred by the other constituent of the Joint Venture, M/s A.K.
Das Associates, on an individual who is the Director of the petitioner and not on the petitioner itself,
who sought the appointment of the arbitrator. The court concluded that the petitioner did not have
the authorization to represent the Joint Venture.
“The arbitration request hence has to be rejected on the ground of the requester being not a party to
the agreement. However, this would not affect the rights of the Joint Venture to seek arbitration,
subject to just exceptions,” said the court. The court thus dismissed the petition.
The case title is M/s REW Contracts Pvt Ltd vs Bihar State Power Transmission Co Ltd & Anr., and the
counsel for the petitioner was Mr. Ankit Katriar, while the counsel for the respondent was Mr. Anand
Kumar Ojha.
written by- Bhoopendra a student of ILSR, GLA University, Mathura, 2nd Semester, an intern under Legal Vidhiya
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