Arbitration -- Partnership -- Scope of arbitration clause -- Dispute whether partnership dissolved by mutual agreement is a dispute 'touching the partnership agreement'. A deed of partnership dated December 22, 1966 between two brothers contained cl. 15 referring to arbitration all disputes and questions whatsoever arising during the partnership or afterwards 'touching the partnership agreement including division of assets, debts or liabilities'. The respondent claimed an oral agreement of January 17, 1968 whereby the appellant was to retire from the partnership and assign his interest against a price fixed by a named chartered accountant; the appellant denied the agreement and applied under s. 33 of the Indian Arbitration Act, 1940 for declarations that the dispute fell outside the arbitration clause. The High Court (Kantawala, J.) dismissed the petition. Held (Shah, J.): where the firm consists of only two partners, an agreement by one partner to retire amounts to dissolution of the partnership; the agreement set up by the respondent, while maintaining the covenants of the partnership deed, seeks to dissolve the partnership and settle the rights and obligations arising out of dissolution, and does not supersede the deed or its arbitration clause; a dispute whether the partnership was dissolved by mutual agreement is clearly a dispute touching the partnership agreement and is referable under cl. 15. Whether the January 17, 1968 agreement was in fact reached was left to the arbitrators. The Court expressed no opinion on the effect of agreeing that part of a dispute be decided by a valuer rather than the arbitrator, nor on the extent of the arbitrators' powers (the specific-performance plea not having been argued). Appeal dismissed with costs.
