Arbitration Proceedings in LLPs: Bombay High Court Clarifies the Binding Nature of LLP Agreements
Arbitration Proceedings in LLPs: Bombay High Court Clarifies the Binding Nature of LLP Agreements By Abhishek Jat, Advocate The Bombay High Court recently delivered a significant judgment addressing the applicability of arbitration clauses in Limited Liability Partnership (LLP) agreements, particularly in cases where the LLP itself is not a signatory to the agreement. The ruling, delivered by Justice Somasekhar Sundaresan, underscores the intrinsic relationship between an LLP and its governing agreement, emphasizing that the LLP cannot be treated as a "third party" to its own foundational document. Background of the Case The dispute arose from an application filed under Section 11 of the Arbitration and Conciliation Act, 1996, by a former partner of BDO India LLP. The applicant had been expelled from the LLP and alleged misconduct and high-handed behavior by the managing partner during the expulsion process. Seeking redress, the applicant initiated arbitration proceed...