Whether Mere allegation of fraud will nullify arbitration agreement?
contained in the aforesaid judgments would be understandable.
However, at the same time, mere allegation of fraud in the
pleadings by one party against the other cannot be a ground to
hold that the matter is incapable of settlement by arbitration and
should be decided by the civil court. The allegations of fraud
should be such that not only these allegations are serious that in
normal course these may even constitute criminal offence, they
are also complex in nature and the decision on these issues
demand extensive evidence for which civil court should appear to
be more appropriate forum than the Arbitral Tribunal. Otherwise,
it may become a convenient mode of avoiding the process of
arbitration by simply using the device of making allegations of
fraud and pleading that issue of fraud needs to be decided by the
civil court. The judgment in N. Radhakrishnan does not touch
upon this aspect and said decision is rendered after finding that
allegations of fraud were of serious nature.
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOS. 8245-8246 OF 2016
A. AYYASAMY
VERSUS
A. PARAMASIVAM & ORS.
Dated:October 04, 2016
Citation: 2016 SCCONLINE 1110