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Alone No Ground To Reject Plea For Arbitrator Appointment:
The has delivered a significant ruling clarifying the threshold for rejecting a Section 11 application under the when faced with an allegation that the is forged. Justice Amit Borkar held that merely raising a forgery claim does not automatically warrant rejection of the plea for appointment of an arbitrator; rather, the court must examine whether independent materials provide a basis for the existence of the . The decision underscores the limited scope of judicial scrutiny at the referral stage and reaffirms that serious factual disputes, including forgery, are best left to the .
The judgment arose out of a redevelopment dispute concerning Patkar House in Mumbai. The applicant, Kiran Narendra Patkar, claimed that a development agreement executed in granted him exclusive and irrevocable redevelopment rights over the property. After the co-owner, Narendra Dattaram Patkar, died in , the respondent Milan Patkar allegedly executed a gift deed in in favour of Sujal Shantinath Mangudkar. Kiran contended that this gift deed breached the development agreement and affected his redevelopment rights, leading him to invoke arbitration in . The respondents opposed the appointment, asserting that the development agreement—and therefore the arbitration clause—was forged.
The Parties’ Submissions
Appearing for the applicant, argued that the was unsupported by evidence and was raised solely to obstruct the redevelopment. He relied on two independent documents: a registered will of Narendra Patkar dated , which expressly referred to the development agreement and the redevelopment of Patkar House, and a recital in the gift deed that referred to the registered will. These documents, he submitted, provided sufficient material to demonstrate the existence of the .
On the other hand, , representing the respondents, contended that Milan Patkar and her late husband had never signed the development agreement. He argued that Narendra Patkar was around 90 years old, bedridden, seriously ill, and unable to understand the English document at the time of its alleged execution. Relying on the ’s decision in , the respondents submitted that an allegation of a forged raises a jurisdictional and issue that the court must decide before making a reference. Additionally, Mangudkar claimed independent ownership of two shops under an earlier registered gift deed of and argued that, as a non-signatory to the development agreement, she could not be compelled to arbitrate.
Court’s Findings on the
Justice Borkar carefully examined the competing submissions and the legal framework governing Section 11 applications. The court acknowledged that an allegation of forgery touches upon the very existence of the and is therefore a . However, the court drew a critical distinction: the mere raising of such an allegation does not, by itself, require the court to reject the application. The real test, as the court articulated, is “whether the material makes the non-existence of the so clear that arbitration cannot be allowed to start.”
In the present case, the court found that the registered will and the subsequent gift deed—both independent documents—referred to the redevelopment transaction. These documents provided sufficient material to permit the arbitration to proceed. The court observed: “The submission based upon Rajia Begum succeeds only to a limited extent. I accept that where the is alleged to be forged, the Court has to consider that objection as a . However, I do not accept that merely raising such an allegation requires rejection of the Section 11 Application.”
The court further held that a should not conduct a full trial into signatures, medical condition, witnesses, and execution where these matters require evidence. Such factual disputes are appropriately resolved by the after both sides have had an opportunity to present evidence. Accordingly, Justice Borkar appointed as the sole arbitrator to adjudicate the Patkar House redevelopment dispute, leaving all objections concerning the agreement’s execution, genuineness, and enforceability open for the arbitrator to decide.
Implications for Non-Signatories
A notable aspect of the judgment is its treatment of the non-signatory respondent, Sujal Shantinath Mangudkar. The court declined to decide at this stage whether Mangudkar, who was not a party to the development agreement, is bound by the arbitration clause. The court also left open the question of what effect her earlier gift deed () might have on the redevelopment rights. These issues, the court held, are matters for the arbitrator to determine based on the evidence and the applicable law.
The court also converted Kiran Patkar’s pending Section 9 petition (for interim relief) into an application under Section 17 of the Act, to be considered by the arbitrator. This procedural streamlining ensures that the tribunal can pass appropriate interim orders without delay.
Legal Analysis: The Correct Standard for Section 11
The judgment reinforces the principle that the referral stage under Section 11 is not the forum for a . The has consistently held that the court’s role at this stage is to examine whether an “exists” in a sense. The decision in Rajia Begum () did not lower that threshold; it only clarified that when the very existence of the agreement is challenged on grounds like forgery, the court must apply a more rigorous test—but not a full adjudication.
Justice Borkar’s approach aligns with the dominant view in Indian arbitration jurisprudence: as long as the applicant can point to some credible material supporting the agreement’s existence, the arbitration should be allowed to commence. The respondents remain free to prove the forgery before the tribunal, which is better equipped to assess witness credibility and documentary evidence.
Impact on Legal Practice
This ruling will have immediate practical consequences for real estate and commercial disputes where forgery allegations are frequently raised to stall arbitration. Litigants can no longer expect an automatic stay of the referral process merely by leveling a forgery charge. Instead, they must satisfy the court that the non-existence of the agreement is “so clear” that arbitration cannot start. This places a higher evidentiary burden on the objector.
For advocates handling Section 11 applications, the judgment provides a clear roadmap: gather independent documents—such as registered wills, gift deeds, board resolutions, or correspondence—that cross-refer to the disputed . Such documents can serve as proof to overcome a forgery objection. Conversely, respondents must present concrete evidence of forgery at the earliest stage, rather than relying on bare allegations.
The judgment also highlights the court’s reluctance to decide non-signatory issues at the referral stage, reinforcing the of letting the tribunal determine the scope of the arbitration clause.
Conclusion
The ’s decision in strikes a careful balance between protecting parties from being dragged into arbitration based on forged documents and preventing forgery allegations from being used as a tactical tool to delay legitimate dispute resolution. By appointing an arbitrator and leaving all factual disputes to the tribunal, the court has upheld the core objectives of the : speed, efficiency, and minimal judicial interference. Legal practitioners will find this judgment a valuable precedent when dealing with similar jurisdictional challenges at the Section 11 stage.
