Bombay HC Recognises Statutory Arbitration for LLP-Disputes Even Without Arbitration Agreement

Judgment dated 4.11.2026 of the High Court of Bombay in Commercial Arbitration Petition No.37 of 2026 of Prashant Vinod Vaghasiya and another   Vs.  Vivekanand Dhaneshwar Jha and others with connected matter

the Petitioners relied upon the provisions of the said Act and according to him, if there is no provision for arbitration, as per the provisions of Section 23 (4) Entry No. 14 of the First Schedule to the said Act, the dispute can be refereed to arbitration. It is true apart from Avighnaa Infra, there is a reference of other entities namely Vighnaharta construction, Telstar Technologies Pvt. Ltd., Om construction had come. So the issue is “whether dispute involving signatories to the respective agreements, can be referred to arbitration” or “whether the dispute amongst the persons who are not signatories to the agreements, can also be referred to an arbitrator”.

Limited Liability Partnership has to be incorporated with Registrar with incorporation documents (Sections 11 and 12). After registration Limited Liability Partnership gets legal existence. Sections 23, 27 and 28 deals with relationship of partners, extent of liability of Limited Liability Partnership and extent of liability of partner.

Entry No. 14 – “All disputes between the partners arising out of the limited liability partnership agreement which cannot be resolved in terms of such agreement shall be referred for arbitration as per the provisions of the Arbitration and Conciliation Act, 1996.”

In this case there is no arbitration clause but there is only jurisdiction clause giving jurisdiction to Mumbai Courts. There is no place of seating of arbitration in the agreements. Jurisdiction Clause is to be interpreted as “When there is an occasion to take recourse to the remedies as per provision of Arbitration and Conciliation Act, then it is the Mumbai Court who is having jurisdiction”.