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2025 Supreme(Online)(Del) 6888
IN THE HIGH COURT OF DELHI AT NEW DELHI
Purushaindra Kumar Kaurav, J
DR MAHESH Y REDDY – Appellant
Versus
KEVIN MARCUS WILLIAM GOVINDER SINGH OLAUSSON – Respondent
ARB.P. 150/2025|O.M.P.(I) (COMM.) 57/2025
For the Appellants/Petitioners: Mr. Ritesh Khatri
For the Respondents: Mr. Tamradhwaj Sharma
The existence of an arbitration clause is affirmed; allegations of fraud do not negate the appointment of an arbitrator under Section 11 of the Arbitration and Conciliation Act, which limits inquiry to prima facie existence.
Headnote:(A) Arbitration and Conciliation Act, 1996 - Section 11 - Appointment of Arbitrator - Petition filed for the appointment of an Arbitrator based on agreements dated 01.09.2016 and 29.03.2022 - Courts limited to prima facie inquiry regarding the existence of an arbitration agreement - Allegations of fraud do not negate the presence of an arbitration clause - Court affirms existence of arbitration clause and appoints Arbitrator. (Paras 9, 11, 13, 14, 21)
(B) Fraud and Limitation - Allegations relating to fraud and time-bar raised by the respondent do not dissuade the court from appointing an arbitrator under Section 11, as these matters are to be determined by the arbitral tribunal post-reference. (Paras 10, 11)
Facts of the case:
The petitioner contends that he is entitled to Rs. 5.25 Crores for services rendered under the agreements, while the respondent alleges fraud and claims time-bar.
Findings of Court:
The court deduces the existence of an arbitration clause within the agreements and appoints an arbitrator to adjudicate the disputes.
Issues: Existence of arbitration agreement and the impact of allegations of fraud on the appointment of an arbitrator.
Ratio Decidendi: The existence of an arbitration agreement is affirmed, with the fraud allegations to be evaluated by the arbitrator. The Court's inquiry is limited to the prima facie existence of the arbitration clause.
Result: Petitions disposed of with the appointment of an arbitrator.
| Table of Content |
|---|
| 1. existence of a valid arbitration clause. (Para 2 , 3) |
| 2. allegations of fraud and time-bar against claims. (Para 4 , 5 , 10) |
| 3. opposition to claims of fraud, time-bar issues. (Para 6) |
| 4. scope of inquiry under section 11 of the arbitration act. (Para 7 , 8 , 9 , 11) |
| 5. differentiated roles of court and arbitrator. (Para 12 , 13) |
| 6. appointment of arbitrator and disposal of petitions. (Para 14 , 15 , 18) |
| 7. disposal of petitions with arbitration appointment. (Para 19) |
2. Mr. Ritesh Khatri, learned counsel appearing for the petitioner contends that in view of two agreements dated 01.09.2016 and 29.03.2022, there exists a valid arbitration clause and if any dispute arises between the parties, the same is amenable to be adjudicated by the Arbitrator.
3. According to him, under the agreement, certain services were to be discharged/ rendered by the petitioner to the respondent as a consultant. He, therefore, contends that in lieu of the services having been rendered to the respondent, the petitioner is entitled for appropriate sum. According to him, as of now, a claim of Rs. 5.25 Crores is outstanding against the respondent which has not been paid.
4. The aforesaid submissions are vehemently opposed by Mr. Tamradhwaj Sharma, learned counsel appearing for the respondent.
5. Mr. Sharma points out that the instant is a case where a fraud has been committed by the petitioner. He submits that Manjeet Singh with whom the first agreement was executed had expired on 15.06.2021 and the agreement dated 01.09.2016 has only seen the light of the day after around eight years. According to him, even the second agreement has suddenly crept up after three years. He, therefore, contends that the claim raised in the petition is hopelessly time barred. According to him, firstly, there exists no valid agreement and secondly, there arise no question of any payment to the petitioner when the petitioner has not been able to satisfy as to what services have been rendered by the petitioner. He contends that there has to be some contemporaneous record to establish such a position.
6. He further submits that even the original agreements have not been produced before this Court.
7. Reliance is placed on paragraph no. 52 of the decision of the Supreme Court in the case of N. Radhakrishnan vs. M/S. Maestro Engineers and Ors. 1
8. Per contra, Mr. Khatri places reliance on the decision of the Supreme Court in the case of Interplay Between Arbitration Agreements under Arbitration Act, 1996 & Stamp Act, 1899, In re2.
9. Having considered the submissions made by learned counsel appearing for the parties and on perusal of the record, the Court finds that the clauses in the agreement dated 01.09.2016 and 29.03.2022 do contain an arbitration mechanism. The relevant clauses are extracted as under:-
“Primary Agreement dtd 01.09.2016
Dispute resolution clause-
Dispute Resolution
Any dispute or difference whatsoever arising between the parties out of or relating to the operation or effect of this contract or the validity or the breach thereof shall be settled by arbitration in accordance with the Indian Arbitration and Conciliation Act, 1996 .”
“Secondary Agreement dtd 29.03.2022
Dispute resolution clause-
Dispute Resolution:
Any dispute or difference 1vhatsoever arising benveen the parties out of or relating to the operation or effect of ARB.P.-150-2025 27 this contract or the validity or the breach thereof shall be settled by arbitration in accordance with the Indian Arbitration and Conciliation Act, 1996 .”
10. With respect to the submissions of Mr. Sharma, who contends that on account of the fraud and the claim being time-barred, the Court should not appoint the arbitrator, the legal position has been enunciated by this Court in the case of Axis Finance Limited v. Mr. Agam Ishwar Trimbak 3.
11. In Axis Finance Limited, the Court, while considering the decision of the Constitution bench of the Supreme Court in the case of Interplay has held as under:
31. From the dis
