Authority: Madras High Court (Chief Justice Sushrut Arvind Dharmadhikari)

Order Date: 04 November 2026

Case Overview

  • Petitioners: Alamelumangai (wife of Ashok Kumar) and P. Jeevanandam, residing at Coimbatore and Madurai respectively.
  • Respondent: Raja Alagurajan, residing at Anna Nagar West, Chennai.
  • Dispute stems from a Limited Liability Partnership Agreement dated 25 January 2021 that created Yohaan Hotel Management LLP.
  • Between August 2018 and August 2019 the petitioners advanced a total of Rs 64,00,000 (Rs 32,00,000 each) to fund the respondent’s hotel management venture, with receipts issued under Alankar Bhavan and Arulrajan Hotel Management Company Private Limited.
  • Clause 6 and Clause 33 of the LLP Agreement recognized these contributions as pre‑formation capital/loans; Clause 8 vested day‑to‑day administrative control with the respondent and Vidhyalakshmi.
  • Petitioners allege the respondent failed to provide operational accounts or returns. A joint meeting on 22 July 2023 recorded options for exit or transfer; the respondent subsequently issued two cheques of Rs 10,00,000 each on 26 and 27 February 2024, which petitioners say covered only accrued interest, leaving principal unpaid.
  • Petitioners served a notice under Section 21 of the Arbitration Act on 29 June 2026 invoking the arbitration clause (Clause 29) of the LLP Agreement.
  • Respondent contended the matter was settled at the 22 July 2023 meeting and that the Rs 10,00,000 payments satisfied the claim; also argued loss‑sharing under Clause 11 due to COVID‑19 losses.
  • Respondent’s reply dated 12 August 2026 to the Section 21 notice expressly acknowledged Clause 29 and nominated retired Justice Dr. T. Mathivanan as a potential arbitrator, indicating willingness to arbitrate.

Final Outcome

  • The Court held that the arbitration clause in Clause 29 of the LLP Agreement is valid and that the respondent’s written acknowledgment precludes a claim of settlement or non‑arbitrability.
  • Mr. V.P. Raman, Advocate, of Chennai, is appointed as the sole arbitrator to adjudicate the disputes arising from the LLP Agreement.
  • The arbitrator must file a disclosure declaration under Section 12(11) of the Act before commencing the reference.
  • The seat and venue of arbitration are fixed at Chennai, and proceedings will be conducted under the Madras High Court Arbitration Centre Rules, 2017, with fees and administrative charges borne equally by the parties.
  • All contentions, counter‑claims and defenses on the merits are left open before the arbitrator; no order as to costs was made.

Topics: Arbitration, Hotel Management