Rahul Verma & Ors. v. Rampat Lal Verma & Ors
The present case revolves around the contentious issue of whether an arbitration agreement ceases to exist upon the death of any party and whether the said agreement can be enforced by or against the legal representative of the deceased person. The facts of the case are such that the legal heirs (Respondents) of a deceased partner in a Partnership Firm had filed a petition under Section 8 of the Arbitration and Conciliation Act, 1996, seeking reference to arbitration as per the arbitration clause in the Partnership Deed, upon a dispute that arose between the Partners upon the death of a Partner in the partnership firm. The said petition was accordingly dismissed by the Commercial Court.
The respondent aggrieved by the ruling of the commercial court approached the Hon’ble Guwahati High Court. The High Court reversed the decision of the Commercial Court and relied upon clause 15 of the Partnership Deed, for reaching a lawful conclusion, which states that any disputes concerning the firm’s affairs, including dissolution, are to be resolved through arbitration. Aggrieved by the decision of the Hon’ble High Court, the appellant approached the Supreme Court seeking revocation of the invocation of the arbitration clause as mentioned in the Partnership Deed on the ground that one of the Partner in the firm is deceased.
The Hon’ble Supreme Court dismissed the SLP, and relied upon the rulings in the case of the Ravi Prakash Goel v Chandra Prakash Goel and Jyoti Gupta v Kewal Sons wherein it was observed that an arbitration agreement does not cease to exist merely on the death of any party and that the arbitration agreement can be enforced by or against the legal representatives of the deceased. The Court accordingly, held that, in the present case, since the legal heirs of the deceased partner have stepped in place of the deceased, therefore the Clause 15 of partnership agreement shall be binding upon both the petitioner and the Respondent.
JUDGEMENT LINK – https://api.sci.gov.in/supremecourt/2025/3623/3623_2025_13_22_59643_Judgement_21-Feb-2025.pdf