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Supreme Court of India · 04/09/2019

RASHID RAZA versus SADAF AKHTAR

[2019] 12 S.C.R. 460 · 2019 INSC 1002

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Summary

The High Court refused to appoint an arbitrator for a partnership dispute because allegations of fund diversion and fraud were considered too complex. Applying A. Ayyasamy, the Court held that the allegations concerned only internal partnership affairs and did not impeach the partnership deed or arbitration clause. The dispute was arbitrable. A sole arbitrator was appointed by consent without affecting the pending criminal investigation.

Issues

  1. Whether allegations of partnership fraud and diversion of funds rendered the dispute non-arbitrable.

Held

Result

The High Court judgment was set aside. By consent, retired Jharkhand High Court Justice Amareshwar Sahay was appointed sole arbitrator to resolve all disputes. The appeal was disposed of, expressly preserving the investigation pursuant to the FIR.

Judgment PDF: Supreme Court of India, [2019] 12 S.C.R. 460.