Fraud allegations do not rule out foreign arbitration

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Allowing an appeal in World Sport Group (Mauritius) Ltd v MSM Satellite (Singapore) Pte Ltd, the Supreme Court recently held that in the case of arbitrations covered by the New York Convention an “arbitration agreement does not become ‘inoperative or incapable of being performed’ where allegations of fraud have to be inquired into”. A two-judge bench ruled that a court cannot refuse to refer parties to arbitration, as provided for in section 45 of the Arbitration and Conciliation Act, 1996, on the ground that allegations of fraud can only be inquired into by a court and not by an arbitrator.

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The dispute digest is compiled by Bhasin & Co, Advocates, a corporate law firm based in New Delhi. The authors can be contacted at lbhasin@bhasinco.in or lbhasin@gmail.com. Readers should not act on the basis of this information without seeking professional legal advice.

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