Fraud allegations do not automatically block arbitration; the tribunal may decide fraud issues and its own jurisdiction.

Allegations of fraud did not, by themselves, bar reference of disputes to arbitration where the parties had an arbitration agreement. The Court held that whether the contract was vitiated by fraud could be examined by the arbitrator, and that the arbitral tribunal could also decide its own jurisdiction. On that basis, and since the arbitration was to be held at Bombay, the Court appointed a sole arbitrator under Section 11(6) of the Arbitration and Conciliation Act, 1996 and referred the disputes to arbitration.

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Issues: Whether the existence of allegations of fraud prevented appointment of an arbitrator under the arbitration clause; and whether the arbitral tribunal could determine its own jurisdiction.

Analysis: The parties had an arbitration agreement, and the respondent had already approached the Bombay High Court for appointment of an arbitrator. The Court held that allegations of fraud in the counter affidavit did not bar reference to arbitration, because the question whether the contract was vitiated by fraud could be examined by the arbitrator. It further held that the issue of the arbitrator's jurisdiction could also be decided by the arbitral tribunal itself. As the arbitration was to be held at Bombay, the Court found it appropriate to appoint an arbitrator in exercise of power under Section 11(6) of the Arbitration and Conciliation Act, 1996.

Conclusion: The request for appointment of an arbitrator was accepted and the disputes were referred to arbitration.

Final Conclusion: Allegations of fraud did not defeat the arbitration clause, and the dispute was directed to be resolved through arbitration by a sole arbitrator.

Ratio Decidendi: Allegations of fraud do not by themselves oust arbitration where the dispute arises from an arbitration agreement, and questions relating to fraud and the tribunal's jurisdiction may be decided by the arbitral tribunal.

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