In Brief
Two brothers in partnership over a hotel business filed a civil suit claiming fraud and financial misappropriation by the appellant-partner. The appellant sought to invoke an arbitration clause in the partnership deed under Section 8 of the Arbitration and Conciliation Act, 1996. The lower courts rejected his application, relying on N. Radhakrishnan v. Maestro Engineers to hold that serious fraud allegations render disputes non-arbitrable. The Supreme Court held that mere allegation of fraud cannot exclude a dispute from arbitration. Only allegations of serious, complex criminal fraud requiring extensive evidence, or fraud vitiating the arbitration clause itself, would justify refusing reference to arbitration. The appeals were allowed, and the parties were directed to arbitration.
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