a) An LLP, though not a signatory, is inherently connected to the LLP Agreement and its arbitration clause. b) The LLP’s operations and the partners’ mutual rights and duties are governed by the LLP Agreement. c) Section 23 and the First Schedule of the LLP Act establish the LLP’s obligations under the agreement.

The High Court rejected the Respondents’ contention, holding that the LLP Agreement’s arbitration clause covered disputes involving the LLP’s governance and partners' rights and obligations.

Conclusion: The Court appointed Justice (Retd.) Manoj Sanklecha as the Respondents’ nominee arbitrator, with Justice (Retd.) Gautam Patel as an alternative. The matter was directed to proceed before the Arbitral Tribunal for further resolution.

Major Acts Discussed:

1. Arbitration and Conciliation Act, 1996 — Section 11 — Appointment of Arbitrators — Scope of Section 11 Court to Examine the Existence of Arbitration Agreement.

2. Limited Liability Partnership Act, 2008 — Section 23 — Relationship of Partners — Rights and Duties of LLP and Partners.

Subjects:

Arbitration — LLP Agreement — Non-Signatory — Expulsion — Privity of Contract — Arbitral Tribunal Jurisdiction — Appointment of Arbitrator.

Nature of the Litigation: The case involved an application under Section 11 of the Arbitration and Conciliation Act, 1996 for the appointment of an arbitrator.

Applicant’s Claim: Mr. Kartik Radia, a former partner of BDO India LLP, sought to initiate arbitration against BDO India LLP and its Managing Partner, Mr. Milind Kothari, over his expulsion from the LLP.

Reason for Filing: Radia challenged the validity of his expulsion and alleged misconduct and high-handed behavior on the part of the Managing Partner.

Previous Decisions: No prior decisions were cited in this particular application.

Issues for Consideration:

a) Whether an LLP not being a signatory to the LLP Agreement can still be a party to arbitration under the agreement’s arbitration clause. b) Whether the arbitration agreement’s scope extends to disputes between the LLP and its partners.

Submissions and Arguments:

Applicant’s Arguments: a) The LLP’s operations and governance are central to the LLP Agreement. b) The LLP’s participation is necessary for effective dispute resolution. c) Section 23 of the LLP Act recognizes the LLP’s role in agreements between partners and the LLP.

Respondents’ Arguments: a) The LLP was not a signatory and therefore cannot be subjected to the arbitration agreement. b) The dispute was allegedly personal between Radia and the Managing Partner. c) Radia’s expulsion, being executed by the LLP, did not involve the arbitration clause.