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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ADVAIT M.SETHNA
Mangal Credit and Fincorp Limited – Appellant
Versus
Ulka Chandrshekhar Nair – Respondent
| Table of Content |
|---|
| 1. application for appointment of arbitrator. (Para 1 , 2) |
| 2. factual background of loan and mortgage agreement. (Para 3 , 4 , 5 , 6 , 7 , 8) |
| 3. parties' arguments regarding the arbitration clause. (Para 9 , 10 , 11 , 12 , 13 , 14 , 15 , 16 , 17 , 18 , 19 , 20) |
| 4. court's observations on arbitrability of dispute. (Para 22 , 23 , 24 , 25 , 26 , 27 , 28 , 29 , 30 , 31 , 32 , 33 , 34 , 35 , 36 , 37 , 38) |
| 5. court's final decision to allow arbitration. (Para 40 , 41 , 42) |
JUDGMENT:
ADVAIT M. SETHNA, J.
1. This is an Application under Section 11 of the Arbitration and Conciliation Act, 1996 (“ACA” for short) praying for an appointment of a sole arbitrator under Section 11 of the ACA. This is to adjudicate disputes between the Applicant and the Respondent, arising out of the Mortgage Deed dated 28 December 2020 (“The said Mortgage Deed” for short) which entails an Arbitration Clause.
Issue:-
2. The intriguing Issue that falls for determination in these proceedings revolves around the existence, maintainability and entertainability of the arbitration clause/agreement contained in the said Mortgage Deeds, given the Respondent’s contention that on account of criminality, fraud touchi
Arbitration agreements remain enforceable despite allegations of fraud unless serious fraud is established, which requires evidential assessment outside arbitration proceedings.
Suits involving the enforcement of mortgages constitute non-arbitrable rights in rem, necessitating resolution through public courts rather than arbitration.
The court affirmed that objections regarding non-arbitrability of disputes are not to be considered at the pre-referral stage under Section 11(6) of the Arbitration and Conciliation Act, 1996.
The court established that serious allegations of criminality do not automatically render partnership disputes non-arbitrable unless they permeate the entire arbitration agreement.
Disputes covered by special laws, creating special rights to be adjudicated and enforced by special forums, are non-arbitrable.
Section 11 SARFAESI mandates arbitration for disputes between bank and financial institution over non-payment due including interest in loan takeover, even if one not secured creditor, as triggered b....
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