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Civil · Reportable judgment

Rashid Raza vs Sadaf Akhtar

Court
Supreme Court of India
Date
4 September 2019
Case No.
Civil Appeal No. 7005 of 2019
Result
Disposed
Bench
R.F. Nariman, R. Subhash Reddy, Surya Kant
Citation
[2019] 12 S.C.R. 460 : 2019 INSC 1002
Supreme Court Reports [2019] 12 S.C.R. 460 : 2019 INSC 1002
Headnote

Arbitration and Conciliation Act, 1996: s. 11 – Appointment of arbitrator – Partnership deed between the parties – Partnership dispute – FIR by one of the partners alleging siphoning of funds and various business improprieties – Application u/s. 11 for appointment of arbitrator under the arbitration clause – Dismissal of the application – On appeal, held: There is distinction between serious allegations of forgery/fabrication in support of the plea of fraud as opposed to “simple allegations” – Two working tests are whether the plea permeate the entire contract and above all, the agreement of arbitration, rendering it void, or whether the allegations of fraud touch upon the internal affairs of the parties inter se having no implication in the public domain – In view thereof, in the instant case there are simple allegations since there is no allegation of fraud which would vitiate the partnership deed as a whole or, in particular, the arbitration clause concerned in the said deed – All the allegations pertain to the affairs of the partnership and siphoning of funds therefrom and not to any matter in the public domain – Thus, the disputes raised between the parties are arbitrable and, hence, s. 11 application is maintainable.

A. Ayyasamy v. A. Paramasivam and Others (2016) 10 SCC 386 : [2016] 11 SCR 521 – relied on.

As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.

Full Judgment Text

The Judgment of the Court was delivered by R. F. NARIMAN, J. 1. The present case arises out of a partnership dispute in which an FIR dated 17.11.2017 was lodged by one of the partners alleging siphoning of funds and various other business improprieties that were committed. The FIR is at present under investigation. 2. An Arbitration Petition dated 02.01.2018 was filed by the appellant before the High Court under Section 11 of the Arbitration and Conciliation Act, 1996, seeking appointment of an Arbitrator under the Arbitration clause which is to be found in the partnership deed between the
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