LLP Bound by Arbitration Clause in Partnership Agreement Even as a Non-Signatory : Bombay High Court

The Bombay High Court has ruled that a Limited Liability Partnership (LLP) can be bound by an arbitration clause in its partnership agreement, even if the LLP itself is not a signatory.

The Court clarified that an LLP, being governed by the partnership agreement, cannot claim to be a third party to it.

The Court rejected the respondent's argument that it was not bound by the arbitration clause, emphasizing that an LLP agreement functions like a company’s Articles of Association, governing both partners and the LLP.

It appointed Justice Manoj Sanklecha as arbitrator, with Justice Gautam Patel as an alternate, directing the arbitral tribunal to proceed.