In Brief
An unregistered partnership firm filed a counter-claim in arbitral proceedings arising from a construction contract dispute. The respondent challenged the arbitration award relying on Section 69(3) of the Indian Partnership Act, which bars unregistered firms from enforcing rights through court proceedings. The Supreme Court held that Section 69(3) applies only to proceedings connected with court suits, not independent arbitral proceedings. The Court found that the statutory fiction in Section 36 of the Arbitration and Conciliation Act, 1996—treating awards as decrees for enforcement—is limited to that purpose and does not make arbitral proceedings equivalent to court proceedings. Therefore, the prohibition against unregistered firms has no application to arbitration awards, and the appeal was allowed.",
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