CASE NAME : Maverick Motors LLP & Others AND Rohith Murthy
CASE NUMBER : Civil Misc. Petition No. 34 of 2025
DATE : 31st October 2025
COURT : High Court of Karnataka
QUORUM: Justice Suraj Govindaraj
FACTS
The brief facts of the instant case are as follows: the Petitioner Maverick Motors LLP and the respondent Rohith Murthy had entered into a Limited Liability Partnership Agreement on 15.10.2022. The said agreement does not refer to any arbitration clause. There being disputes which arose between the parties, the Petitioners indicated that the matter could be referred to arbitration and the respondent agreed in principle for reference of the matter to arbitration, but had sought for some time. By referring to Section 23 of the Limited Liability Partnership Act, 2008 and Entry 14 to the first Schedule of the LLP Act, 2008, the Petitioners indicated that the disputes could be adjudicated by way of arbitration and had nominated its arbitrator. However, the Respondent did not concur with the nomination made by the Petitioners, and had nominated its own arbitrator. As no consensus was reached between the parties, the Petitioners have approached the Hon’ble High Court of Karnataka by way of a Civil Miscellaneous Petition under Section 11(5) & (6) of the Arbitration and Conciliation Act, 1996.
ISSUES
- Whether, in the absence of an arbitration clause in the LLP Agreement, the disputes between the partners can still be referred to arbitration.
- Whether Section 23 of the LLP Act, 2008 read with Entry 14 of the First Schedule creates a statutory and compulsory arbitration mechanism binding on LLP partners.
LEGAL PROVISIONS
- Section 23 of the LLP Act, 2008 deals with the mutual rights and duties of partners Section 23(4) mandates that in the absence of agreement on any matter, the rights and duties of partners are governed by the First Schedule.
- Entry 14 of the First Schedule to the LLP Act, 2008 provides that all disputes between partners arising out of the LLP agreement which cannot be resolved shall be referred to arbitration under the Arbitration and Conciliation Act, 1996.
- Sections 11(5) & (6) of the Arbitration and Conciliation Act, 1996 empower the court to appoint arbitrators where parties fail to agree on appointment procedures.
ARGUMENTS
PETITIONERS:
It was contended by the Petitioners that even in the absence of an arbitration clause in the LLP Agreement, Entry 14 of the First Schedule operates as a statutory arbitration clause, rendering arbitration compulsory. Further, it was pointed out that the Respondent through mail had agreed to resolve the disputes between them before an arbitrator and had even nominated his own arbitrator. Since both parties have nominated separate arbitrators and have reached a deadlock, this necessitates the court’s intervention for the appointment of sole arbitrator.
RESPONDENT:
(Though notice was issued to and received by the Respondent, he had chosen not to be represented )
ANALYSIS
The High Court observed that though the Limited Liability Partnership Agreement does not have an arbitration clause, Section 23 of LLP Act, 2008, speaks of relationship of parties. Out of this, Section 23(4) is a standout provision inasmuch as it provides for in the absence of agreement as to any matter, the mutual rights and duties of the partners and the mutual rights and duties of the limited liability partnership shall be determined by the provisions relating to that matter as are set out in the Entry 14 of First Schedule. All disputes between partners arising out of the limited liability partnership which cannot be resolved in terms of an LLP agreement shall be referred for arbitration as per a statutory and compulsory arbitration, which is required to be adhered to by the partners to a limited liability partnership.
JUDGEMENT
The High Court of Karnataka allowed the CMP and passed the following directions appointing Justice K.N. Keshavanarayana, former Judge of the Karnataka High Court, as the sole arbitrator to adjudicate the disputes between the parties under the aegis of the Arbitration and Conciliation Centre attached to the High Court. The parties were directed to appear before the Centre on 12.11.2025 at 2:30 PM without further notice.
CONCLUSION
It could be concluded that the instant case crystallizes that Entry 14 of the First Schedule to the LLP Act, 2008 creates a statutory, compulsory arbitration mechanism when the LLP Agreement is silent on dispute resolution. In such a case Arbitration is not optional but mandated. This undoubtedly highlights the binding nature of statutory arbitration provisions within the LLP framework.
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WRITTEN BY : AMYUKTA RAJAGOPAL
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