Arbitration and Conciliation Act, 1996: s. 11 – Appointment
of arbitrator – Partnership deed between the parties – Partnership
dispute – FIR by one of the partners alleging siphoning of funds
and various business improprieties – Application u/s. 11 for
appointment of arbitrator under the arbitration clause – Dismissal
of the application – On appeal, held: There is distinction between
serious allegations of forgery/fabrication in support of the plea of
fraud as opposed to “simple allegations” – Two working tests are
whether the plea permeate the entire contract and above all, the
agreement of arbitration, rendering it void, or whether the
allegations of fraud touch upon the internal affairs of the parties
inter se having no implication in the public domain – In view thereof,
in the instant case there are simple allegations since there is no
allegation of fraud which would vitiate the partnership deed as a
whole or, in particular, the arbitration clause concerned in the said
deed – All the allegations pertain to the affairs of the partnership
and siphoning of funds therefrom and not to any matter in the public
domain – Thus, the disputes raised between the parties are arbitrable
and, hence, s. 11 application is maintainable.