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04 June 2021 | IMZ Corporate Pvt. Ltd. v. MSD Telematics Pvt. Ltd. | Sanjeev Narula J | 2021 SCC OnLine Del 3016
Four objections to an application for appointing an arbitrator were rejected by Narula J.
On the argument that the agreement was forged and fabricated and a criminal court had observed as such while deciding an application for anticipatory bail, Narula J said they were “prima facie observations” in a context. Thus, the mere allegation of fraud was not enough unless the document appeared fabricated.
He found that argument on non-compliance of the pre-arbitral mechanism inconsistent with the plea of fraud and irreconcilable with the fact that parties had initiated criminal cases against each other. Thus, the pre-arbitral negotiation would be an “empty formality.”
On the objection of insufficiency of stamp duty, he said that the matter is settled by NN Global Mercantile Pvt. Ltd. v. Indo Unique Flame Ltd., 2021 SCC OnLine SC 13 (until the 5-judge bench reconsiders the decision). Accordingly, an arbitration agreement survives independently of the underlying contract.
Lastly, Narula J also said that the contractual disputes did not become inarbitrable merely because a petition had been filed in the NCLT on the grounds of oppression and mismanagement.
Access the judgment here.
Categories: Appointment of Arbitrators | Arbitrability of Fraud | Arbitrability of Oppression and Mismanagement | Empty Formality | Forgery | Fraud | Global Mercantile | Pre Arbitral Mechanism | Pre Arbitral Procedure | Section 11 ACA | Stamping of Arbitration Agreement | Stamping of Main Agreement | Unstamped Agreement