Karnataka HC says that the LLP disputes must go to Arbitration by default.

Judgment dated 31.10.2025 of the High Court of Karnataka at Bengaluru in Civil Misc. Petition No.34 of 2025 of Maverick Motors LLP and others   Vs. Rohith Murthy              

On 15.10.2022, there was LLP agreement between the petitioners and the respondent. 

However, there was no arbitration clause in this Agreement.

By the notice dated 18.1.2024, the petitioners invoked arbitration as per sub-section (4) of Section 23 of LLP and Entry 14 of its First Schedule and nominated its arbitrator.   However, the respondent nominated his own arbitrator.

In this context, sub-section (4) of Section 23 and Entry 14 assume significance.   It is provided that in the absence of agreement as to any matter, the mutual rights of LLP and partners shall be determined by the provisions of First Schedule.

Entry 14 of First Schedule says that “all disputes between the partners arising out of the LLP agreement which cannot be resolved in terms of such agreement shall be referred for arbitration as per A&C Act, 1996.

Even otherwise, the parties had agreed for arbitration in their legal notices.

In this context, the Arbitrator was appointed.

This judgment sets the precedent for statutory arbitration in LLP partners disputes even in the absence of express arbitration clause in the Agreement.