At the Kerala High Court on Wednesday, a somewhat tense but steady hearing unfolded over a long-standing petroleum dealership dispute. Justice S. Manu delivered a detailed order refusing to appoint an arbitrator for M/s P.K. Chandrasekharan Nair & Co., a Thripunithura-based HPCL dealer, after concluding that the firm’s managing partner had no express permission from his co-partner to drag the firm into arbitration. The ruling, coming after prolonged arguments, effectively shuts the door on arbitration-for now-over allegations that Hindustan Petroleum Corporation Ltd. (HPCL) unlawfully replaced the dealership.
Background
The firm had been running an HPCL outlet since 1970 on land leased from a private owner. Things began to unravel in 2013 when the landowner filed a civil suit to recover possession. Although the suit later went to arbitration, the relationship between the landowner and HPCL soured further, ultimately forcing the petrol pump to shut down in February 2021.
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Two years later, HPCL allegedly permitted a new dealer to operate on the same premises. Feeling sidelined, the original dealer approached court and also issued a hefty damages notice claiming over ₹2.51 crore. When HPCL didn’t respond, the managing partner, K.C. Anilkumar, invoked the arbitration clause under the dealership agreement and applied to the High Court under Section 11 of the Arbitration and Conciliation Act to appoint a neutral arbitrator.
HPCL’s counterattack was straightforward: the arbitration request wasn’t even maintainable because Anilkumar, despite holding 51% in the firm, couldn’t legally take the firm into arbitration without explicit approval from the other partner, Mrs. Ganga Sreekumar.
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Court’s Observations
The hearing moved briskly, but there were moments when the bench paused to clarify fine points of partnership law. Justice Manu remarked more than once that, “The Court cannot ignore a statutory bar merely because arbitration is encouraged.” The courtroom felt that familiar Kerala High Court mix of sharp legal debate and understated tension.
The judge explained that Section 19(2)(a) of the Indian Partnership Act clearly prevents one partner from submitting a dispute to arbitration unless the other partner gives express permission. This is because such decisions can seriously bind the firm. “The bench observed, ‘Submitting a dispute to arbitration is not a routine act of business; it carries long-term consequences for all partners,’” the order notes.
The petitioner’s counsel argued that a partnership deed clause allowed Anilkumar to represent the firm before judicial authorities. But the Court felt that this general clause was not enough to override the statutory bar. Express authorization, the judge stressed, must be unmistakably clear and specific-especially when the action could bind a partner who never consented.
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The Court also clarified that Section 11 proceedings are not a “mechanical exercise.” If an arbitration application itself is not competent, the Court has the responsibility to reject it at the threshold instead of pushing everything to the arbitrator.
Decision
In the end, Justice Manu held that filing a Section 11 request is, in practical terms, “submitting a dispute to arbitration,” and therefore prohibited without explicit approval of all partners. Since no such approval existed, the application was ruled not maintainable.
The arbitration request was dismissed at the admission stage itself.
Case Title: M/s P.K. Chandrasekharan Nair & Co. vs. Hindustan Petroleum Corporation Ltd.
Case No.: AR No. 96 of 2025
Case Type: Arbitration Request (Section 11, Arbitration and Conciliation Act)
Decision Date: 26 November 2025
