1. Arbitration and fraud (Para 20):
– A plea of fraud can only oust the jurisdiction of an arbitrator if it is of a serious nature. The court identifies two critical conditions to determine non-referability to arbitration:
– The fraud plea must permeate the entire contract, including the arbitration agreement, making it void.
– The fraud allegation should be related to the internal affairs of the parties without implications in the public domain.
– If the fraud allegation is strictly inter-partes, it does not constitute serious fraud and does not preclude arbitration. This principle was affirmed in Rashid Raza v. Sadaf Akhtar, (2019) 8 SCC 710.
2. Arbitrability of Suits Related to Immovable Property (Para 19):
– A suit for the cancellation of a deed or a declaration of rights arising from it is considered an action in personam, not in rem.
– Actions under the Specific Relief Act are in personam and arbitrable.
– The case Deccan Paper Mills v. Regency Mahavir Properties, (2021) 4 SCC 786, is referred to support the arbitrability of such disputes.
3. Jurisdiction and Judicial Interference in Arbitration (Para 16, 17):
– Section 16 of the Arbitration and Conciliation Act, 1996, empowers the Arbitral Tribunal to rule on its own jurisdiction and competence, including the existence and validity of the arbitration clause.
– The 2015 amendment to the Act minimizes judicial interference, with courts primarily ensuring the existence of a valid arbitration agreement.
– Non-arbitrability exceptions, such as statutory protections for certain parties (e.g., consumers), must be considered by the court.
– Apart from these exceptions, judicial scrutiny at the stage of Section 11(6) or Section 8 is highly limited.
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