Arbitration Survives Allegations: Bombay HC on Fraud, Fairness and Finality
The petitioner and the respondents had transactions in respect of residential apartment units between 2014-2019.
However, the arbitration was started at Mumbai in respect of the disputes between the parties in 2020.
The petitioner filed section 16 application challenging the jurisdiction of the Arbitrator at Mumbai by relying on arbitration clauses in the Joint Development Agreement and the Security Deposit Agreement requiring three members panel of arbitrators.
By the order dated 21.11.2020, the Arbitrator rejected the application.
On 13.12.2020, the petitioner filed section 17 application to produce details of bank transactions. However, the decision was deferred observing that the petitioner could elicit information during cross-examination of witnesses. The Arbitrator adopted unfair approach and disallowed the questions in cross-examination.
On 24.1.2022, the arbitral award was passed, the claim of the respondents was granted and the counter claim of the petitioner was rejected.
HELD that if the objection of fraud and criminal proceedings was raised in the arbitral proceedings only as a pretext to avoid arbitration, the arbitral proceedings would not be jeopardized and the dispute could certainly be received by arbitration.
Judgment dated 14.10.2025 of the High Court of Bombay in Commercial Arbitration Petition No.489 of 2022 (OS) of K.V. Naidu Vs. Integrated Home Solutions Pvt Ltd and another with connected matters
