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.
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