Indian Premier League and XIX Commonwealth Games take arbitrability of fraud in India by storm

Abstract

Allegations of fraud by a party have proven to be a troublesome question for enforcement of arbitration agreements in India. No statutory provision of the Indian Arbitration and Conciliation Act, 1996 expressly prohibits arbitrability of fraud claims in India. However, judicial precedents had steered this issue in a direction where even a hint of any fraudulent action by one of the parties would make the disputes non-arbitrable. This article attempts to provide an in-depth analysis of arbitrability of fraud claims in India. It deals with both kinds of fraud—fraud while entering into the arbitration agreement, and fraud while performing obligations under the agreement. In pursuance of this endeavour, the authors highlight some key provisions of the Arbitration and Conciliation Act, 1996. Thereafter, the authors critically analyse the effect of the recent judgments of the Supreme Court of India in World Sports Group (Mauritius) Ltd v MSM Satellite (Singapore) Private Limited and Swiss Timing Limited v Organizing Committee, Commonwealth Games on arbitrability of disputes pertaining to fraud in India. The authors conclude by enumerating additional reasons for permitting arbitrability of disputes pertaining to fraud in India.