Role of the Partnership Deed
The partnership deed is the primary legal document that guides dispute resolution between partners. If well-drafted, it prevents most conflicts or helps resolve them internally.

• Contains clauses for profit sharing, authority, and roles
  
• May include dispute resolution methods like mediation or arbitration
  
• Can specify procedures for retirement, expulsion, or exit
  
• Acts as the first reference point before legal action
  
• All partners are bound by its terms once signed
  

Mediation and Internal Resolution
The preferred first step in resolving disputes is mutual discussion or informal mediation to preserve the partnership and avoid litigation.

• Partners can meet and negotiate in good faith
  
• A neutral third party may mediate the issue
  
• Internal resolution preserves the firm’s operations and goodwill
  
• Deed-based guidelines support fair decision-making
  
• An agreement reached through mutual consent is legally valid
  

Arbitration as an Alternative Dispute Resolution (ADR)
If internal efforts fail, arbitration offers a formal but out-of-court resolution mechanism—especially if specified in the deed.

• Requires an arbitration clause in the partnership deed
  
• An independent arbitrator is appointed to decide the matter
  
• Decisions (arbitral awards) are binding and enforceable by law
  
• Saves time and costs compared to court cases
  
• Governed by the Arbitration and Conciliation Act, 1996
  

Legal Proceedings in Court
When disputes are serious or arbitration is not an option, partners may approach the civil court for legal remedy under the Indian Partnership Act.

• Suits may be filed for breach of the partnership agreement
  
• The court may intervene in cases of mismanagement, fraud, or dissolution
  
• A registered firm can sue or be sued in its own name
  
• Unregistered firms cannot sue partners or third parties except in limited cases
  
• Court judgments are enforceable and binding on all parties
  

Common Grounds for Dispute and Resolution
Understanding the usual causes of conflict can help in drafting preventive clauses and handling issues early.

• Disagreements over profit distribution or capital contribution
  
• Breach of trust or unauthorized transactions by a partner
  
• Disputes on retirement, expulsion, or dissolution
  
• Differences in decision-making and management authority
  

Non-compliance with partnership terms or unethical conduct