SC Judgment of 3.2.2026 – Enforcement of Arbitration Agreement Begins with its Authenticity
Judgment dated 3.2.2026 of the Supreme Court in SLP (Civil) No.6013 of 2021 of Rajia Begum Vs. Barnali Mukherjee with connected matters.
The appellant, respondent no.2 and respondent no.3 constituted a partnership firm M/s RDDHI Gold. Respondent no.1 that the respondent nos.2 and 3 had executed Power of Attorney on 17.4.2007 in her favour to manage the affairs of the firm on their behalf. She had executed a deed of admission and retirement of respondent nos.2 & 3 from the firm.
The appellant contended that the business of the reconstituted partnership firm was taken by the company as per the absorption deed dated 27.2.2011.
On 2.10.2016, the respondent no.1 gave notice that on the basis of admission Deed dated 17.4.2007, she had interest of 50.33% in the erstwhile partnership firm.
The appellant alleged that the Admission Deed is a forged and fabricated document.
In section 9 petition of the respondent no.1, on 4.5.2018, it was held that the very existence / execution of the Admission Deed is in dispute and in view of cogent material indicating its non-existence, it would not be prudent to grant interim relief. This was confirmed by the Supreme Court and attained finality.
On 16.5.2018, the appellant filed civil suit for declaration the Admission Deed is forged document. In that suit, respondent no.1 filed section 8 AA application to refer the dispute for arbitration.
Similarly, the respondent no.1 also filed section 11 petition for appointment of arbitrator.
The question between the parties was whether the disputes could have been referred to the arbitration under Section 8 of the Act and correspondingly whether the High Court was justified in declining the appointment of an arbitrator under Section 11 of the Act.
In the above context, the SC examined the impact of fraud on arbitrability.
respondent no.1 had failed to produce the original Admission Deed or a certified copy thereof, as required under Section 8(2) of the Act. The aforesaid findings were not perfunctory, but were grounded in the material on record and in the statutory requirements.
While findings in Section 9 proceedings are undoubtedly prima facie in nature, such findings, when they attain finality, cannot be ignored in subsequent proceedings founded on the very same issue. The prima facie satisfaction recorded by the High Court regarding the doubtful existence of the arbitration agreement was, therefore, a relevant consideration while examining applications under Sections 8 and 11 of the Act.
