Allowing an appeal in A Ayyasamy v A Paramasivam & Ors, the Supreme Court recently held that where there are simple allegations of fraud touching upon a party’s internal affairs, and there is no implication on the public domain, an arbitration clause need not be avoided and the parties can be sent to arbitration.
In this case, five brothers and their late father had entered into a partnership deed (containing an arbitration clause) to conduct a hotel business in Tamil Nadu. When disputes arose between the parties, the respondents filed a civil suit for a declaration that the partners had the right to participate in the hotel administration.
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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 firstname.lastname@example.org or email@example.com. Readers should not act on the basis of this information without seeking professional legal advice.