2nd SURANA AND SURANA & KLE LAW COLLEGE NATIONAL CONSTITUTIONAL LAW MOOT COURT

COMPETITION-2018I CODE: 17-58

CLINIC-II (INTERNATIONAL COMMERCIAL ARBITRATION)

COMPULSORY MOOT, 2020

BEFORE THE HON’BLE BOMBAY HIGH COURT

PETITION (Civil) NO: _________ OF 2020

UNDER SECTION 47 OF THE ARBITRATION & CONCILIATION ACT, 1996

IN THE MATTER OF:

GARRISON & TOUBRO INDIA PVT. LTD……………...…...[PETITIONER]

V.

MARTINIUM ELECTRONICS PTE LTD……….……….....[RESPONDENT]

UPON SUBMISSION TO THE HON’BLE CHIEF JUSTICE AND HIS COMPANION

JUSTICES OF THE BOMBAY HIGH COURT

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TABLE OF CONTENTS

TABLE OF CONTENTS .............................................................................................................. I

LIST OF ABBREVIATIONS ........................................................................................................ I

INDEX OF AUTHORITIES ....................................................................................................... II

STATEMENT OF FACTS .......................................................................................................... V

STATEMENT OF ISSUES ........................................................................................................ VI

SUMMARY OF ARGUMENTS.............................................................................................. VII

ARGUMENTS ADVANCED ................................................................................................... XII

I. THE UNILATERAL INVOCATION OF ARBITRATION CLAUSE BY G&T INDIA PVT. LTD. IS NOT

MAINTAINABLE. ................................................................................................................................... XII

A. UNILATERAL INVOCATION OF ARBITRATION CLAUSE IS INVALID AS PER INDIAN LAW. .......................XII

B. THE AWARD, IF ENFORCEABLE IS AGAINST THE ‘PUBLIC POLICY’ OF INDIA. ...................................... XV

II. THE ALLEGATION OF FORGERY AND FRAUD PUT FORTH BY G&T PVT. LTD. AMOUNTS TO

SERIOUS FRAUD ,RENDERING THE ISSUE, NON-ARBITRABLE ........................................................... XVI

A. THE DIFFERENCE BETWEEN SIMPLE AND COMPLEX FRAUD BY TRIALABILITY ................................... XVII

B. THE QUESTION OF ARBITRABILITY : FRAUD SIMPLICITOR V. SERIOUS FRAUD ................................. XVIII

PRAYER ................................................................................................................................... XXI

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LIST OF ABBREVIATIONS
ABBREVIATION EXPANDED FORM
& and
¶ paragraph
Act The Arbitration & Conciliation Act, 1996
AIR All India Report
Anr. Another
Co. Company
Comm. Commercial
Del. Delhi
DRJ Delhi Reported Journal
ER England Reporter
EWHC High Court of England and Wales
Hon’ble Honourable
ILR Indian Law Review
LR Ch. D Law Reports, Chancery Division
LW Law Weekly
Ltd. Limited
Mad. Madras High Court
Ors. Others
S. Section
SC Supreme Court
SCC Supreme Court Cases
SCR Supreme Court Reporter
SGCA Singapore Court of Appeal
SS. Sections
u/A under Article
u/s under section
UOI Union of India
US United States
v versus

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INDEX OF AUTHORITIES
STATUES REFERRED:

1. THE ARBITRATION AND CONCILIATION ACT, 1996

2. INDIAN CONTRACT ACT, 1872
CONSTITUTION REFERRED:

1. THE CONSTITUTION OF INDIA, 1950.

INTERNATIONAL TREATIES

1. CONVENTION ON THE RECOGNITION AND ENFORCEMENT OF FOREIGN ARBITRAL AWARDS,

1959
2. THE ICC ARBITRATION RULES, 2017.
BOOKS:

1. ALAN REDFERN AND MARTN HUNTER, REDFERN AND HUNTER ON INTERNATIONAL ARBITRATION,

OXFORD UNIVERSITY PRESS (5TH ED., 2014).

2. ANIRBAN CHAKRABORTY, LAW & PRACTICE OF ALTERNATIVE DISPUTE RESOLUTION IN INDIA: A

DETAILED ANALYSIS, LEXIS NEXIS (2015).

ARTICLES AND ONLINE RESOURCES:

1. Dispute Settlement, International Commercial Arbitration, United Nations Conference on

Trade and Development, 2005
2. Journal of International Arbitration, Wolters Kluwers, Kluwer Law International, ISSN
0255-8106, 2008
3. Iurii Ustinov, “UNILATERAL ARBITRATION CLAUSE; LEGAL VALIDITY”, Master’s Thesis,
Tilburg University.
REPORTS:

1. Law Commission of India, 246th report- Amendment to the A&C Act, 1996 (2014).
DATABASES USED:

1. JStor
2. Kluwer Arbitration
3. Lexis Nexis Legal
4. SCC Online

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CASES REFERRED:

A. Ayyasamy v. Paramasivam & Ors., (2016) 10 SCC 386. ................................................................... XVII

Abdul Kadir Shamsuddin Bubere v. Madhav Prabhakar Oak, 1962 AIR 406. .................................... XVIII
AT&T Mobility LLC v. Conception, 563 U.S. 333 (2011). ...................................................................... XIV
Barclays Bank plc. v Ente Nazionale di Previdenza, (2015) EWHC 2857 Comm .................................. XIII
Bhartia Cutler Hammer v. AVN Tubes, 1995 (33) DRJ 672. .....................................................................XII
Booz Allen & Hamilton Inc. v. SBI Home Finance Ltd. & Ors., (2011) 5 SCC 532 ............................ XVIII
Castrol India Ltd. v. M/S Apex Tooling Solutions and Ors., 2015 (1) LW 961. ...................................... XIII
D.K Gupta & Anr. v. Renu Munjal, (2017) SCC OnLine Del. 12385. .................................................... XIV
Emmsons International Ltd. v. Metal Distributors, 2005 (80) DRJ 256. ................................................. XIII
KK Modi v. KN Modi, 1998 AIR SC 1297. .............................................................................................. XIV
N. Radhakrishnan v. Maestro Engineers & Ors., (2010) 1 SCC 72. .................................................... XVIII
Perkins Eastman Architects DPC & Anr. V. HSCC (India) Ltd., Arbitration Application No. 32 of 2019.
.............................................................................................................................................................. XIV
Phulchand Exports Ltd. v. O.O.O. Patriot, (2011) 10 SCC 300. .............................................................. XV
Rashid Raza v. sadaf Akhtar, (2019) 8 SCC 710. ..................................................................................... XX
Renusagar Power Co. Ltd. v. General Electric Co., 1994 AIR 860. ........................................................ XV
Russel v. Russel, (1880) LR 14 Ch. D 471. ........................................................................................... XVIII
Swiss Timings Ltd. v. Commonwealth Games 2010 Organizing Committee, (2014) 6 SCC 677. ........... XIX
Trf Ltd. v. Energo Engineering Projects Ltd., (2017) 9 SCC 377 ........................................................... XIV
Wilson Taylor Asia Pacific Pte. Ltd. v. Dyna-Jet Pte. Ltd., (2017) SGCA 32......................................... XIII

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STATEMENT OF JURISDICTION

THE RESPONDENT HUMBLY SUBMITS TO THE JURISDICTION OF THE

HON’BLE HIGH COURT OF BOMBAY UNDER SECTION 47* OF THE

ARBITRATION & CONCILIATION ACT, 1996 IN PURSUANCE OF APPLICATION

FILED BY THE PETITIONER AND RESERVES THE RIGHT TO REBUT.

*
Section 47 of the Arbitration & Conciliation Act, 1996:
“Evidence.—
(1) The party applying for the enforcement of a foreign award shall, at the time of the application, produce before the
court—
(a) the original award or a copy thereof, duly authenticated in the manner required by the law of the country in which
it was made;
(b) the original agreement for arbitration or a duly certified copy thereof; and
(c) such evidence as may be necessary to prove that the award is a foreign award.
(2) If the award or agreement to be produced under sub-section (1) is in a foreign language, the party seeking to
enforce the award shall produce a translation into English certified as correct by a diplomatic or consular agent of
the country to which that party belongs or certified as correct in such other manner as may be sufficient according to
the law in force in India. Explanation.—In this section and all the following sections of this Chapter, “Court” means
the principal Civil Court of original jurisdiction in a district, and includes the High Court in exercise of its ordinary
original civil jurisdiction, having jurisdiction over the subject-matter of the award if the same had been the subject-
matter of a suit, but does not include any civil court of a grade inferior to such principal Civil Court, or any Court of
Small Causes”.

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STATEMENT OF FACTS

It is most humbly submitted before this Hon’ble High Court of Judicature at Indraprastha:
1. That the government of Sikkim on 2 October 2018 awarded a contract to Garrison &
Toubro India Private Limited (hereinafter G&T & subsidiary of the UK headquartered
Garrison & Toubro Limited. Registerd in Mumbai) for building a state-of-the art
hydroelectric power plant channeling water from the Teesta river.
2. That, on 4 January 2019, G&T entered into a contract with Martinium Electronics Pte Ltd
(hereinagter Maritnium, Singapore incorporated subsidiary of German electronics
corporation) for procuring turbines for the power project (hereinafter Turbines Contract).
G&T and Martinium added an arbitration clause to their contract which stated that G&T
had rights to refer any dispute in connection with this contract for arbitration seated in
Singapore.
3. That the first batch of turbines was delivered to G&T’s project site in Sikkim on 1 April
2019 which failed G&T’s quality control test. Being dismayed by this, G&T’s CEO, Mr
Jim Daniels engaged a forensic investigations company, Cosmopolitan Investigations LLP
to conduct an investigation into the affairs of Martinium. The investigative report submitted
by Cosmpolitan to G&T on 1 May 2019 noted that Martinium had deliberately
misrepresented and forged all documents. Mr. Daniels became very aggrieved by this
report given that G&T had entered into the Turbines Contract solely on the basis of
Martinium’s representation about the quality of its turbines and the reliability of its
production process.
4. That, pursuant to the unanimous decision taken at an emergent board meeting on 10 May
2019, G&T initiated arbitration under the ICC Rules. This arbitration was seated in
Singapore and an award on jurisdiction and merits was passed by the tribunal on 31
December 2019 (hereinafter Award). Maritinium never participated in the arbitral process
out of protest.
5. That, on 25 March 2020, G&T filed a petition before the Bombay High Court for enforcing
the above award and notice was issued to Martinium on that day itself.

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STATEMENT OF ISSUES

I.

WHETHER THE UNILATERAL INVOCATION OF ARBITRATION CLAUSE BY G&T

INDIA PVT. LTD. IS MAINTAINABLE?

II.

WHETHER THE ALLEGATION OF FORGERY AND FRAUD PUT FORTH BY G&T

INDIA PVT. LTD. AMOUNTS TO SERIOUS FRAUD, RENDERING THE ISSUE, NON

ARBITRABLE?

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SUMMARY OF ARGUMENTS
I.
The petition preferred by the petitioner under Section 47 of the Arbitration & Conciliation Act,
1996 should not stand maintainable for firstly, the respondent has violated the agreed upon method
of dispute resolution through arbitration by acting arbitrarily without being in consultation with
the respondent as was originally agreed upon between the parties, hence undermining the value of
the respondent in the dispute resolution approach; secondly, the invocation of arbitration clause
unilaterally obtained by the petitioner is a gross violation of natural justice, which stands against
the right of ‘Audi Alterem Partem’ which is the primitive and essential feature of justice systems
across the globe; thirdly, there exist no ‘Good Practical Reason’ on the side of the petitioner that
the arbitration clause was invoked unilaterally without the consultation with the respondent, hence
it is evident that there exist malice in the intention of the petitioner aiming to undermine the duty
owed towards the respondent. Thus, the Hon’ble High Court should not entertain petitioner’s
application under the garb of this jurisdiction.

II.
The award obtained by the petitioner against the respondent by the Singapore Arbitral Tribunal is
unenforceable as it is evident that the allegation of forgery and fraud put forth by the petitioner
against the respondent is not a case of simple fraud, the arbitral tribunal based its decision on the
assertion that the investigation report provided by the petitioner through a private investigation
company possess merits for it to considered for the award to be passed, hence becoming a vital
document while granting the award in favor of the respondent, whereas the Hon’ble Supreme Court
time and again has cleared the stance of law through judicial pronouncements that there is
distinction in the type of fraud which is alleged by the parties, on one hand, simple fraud being
arbitrable, on the other hand, complex fraud which shakes the conscience of the court and id
deemed to be against the public policy of the country required judicial intervention by the court
examining the merits of the case, rendering the award passed as unenforceable as the matter of
complex fraud is non-arbitrable. Thus, the Hon’ble High Court should not honor the foreign award
passed and examine the intricate details of the allegation of fraud by the petitioner.

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ARGUMENTS ADVANCED

It is most respectfully submitted before the Hon’ble High Court of Bombay:

I. THE UNILATERAL INVOCATION OF ARBITRATION CLAUSE BY G&T INDIA PVT. LTD. IS

NOT MAINTAINABLE.
1. That, the intention of the petitioner has been curtailed with doubt in respecting the mutual
agreement reached between him and the respondent by the virtue of agreement signed by both
the parties on 4th January 2019 as the decision to opt for arbitration as unilaterally undertaken
by the petitioner, which is considered to be bad in context of Indian Law, as it violates the
principles of natural justice.
2. That, the petition under question before this Court has found its way through shaky assertions
on behalf of the petitioner. The petition aspires to call for the interference of this Hon’ble Court
in a matter that strives to enforce a foreign award which has been obtained by unfair means
without involving the respondent during the course of the arbitral proceeding, despite
respondent’s persistent protest from the beginning. The petitioner through his petition aims to
strike at a point of law that is rather a mirage. The petition should not be held maintainable for
the undermentioned reasons and must be done away with at this Court’s behest.
A. UNILATERAL INVOCATION OF ARBITRATION CLAUSE IS INVALID AS PER INDIAN LAW.
3. That, the Indian courts have time and again clarified their stance with regards to the
concentration of power in the hands of a single party being unconscionable in nature, the Delhi
High Court in its judgment has clarified that a party cannot have an exclusive right to initiate
arbitration as per the provisions of the Arbitration & Conciliation Act as arbitration should be
invoked with the mutual consent of both the parties involved, invocation of proceeding must
be done bilaterally and not unilaterally.1
4. That, the same court after ten years has upheld the validity, decided in the Bhartia Cutler
Hammer case2, arriving at same conclusion adopting a different approach, the court was of the
view that unilateral invocation of arbitration clause is void as it restrains the other party in

1
Bhartia Cutler Hammer v. AVN Tubes, 1995 (33) DRJ 672.
2
Ibid.

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exercising its right of recourse to legal proceedings, which is in contravention to Section 28 of

the Indian Contract Act, 1872, hence rendering such exercise against the ‘Public Policy’ of
India.3
5. That, recourse has been taken time and again by proponents making it seemingly difficult to
understand the Indian courts’ stance about deciding whether unilateral invocation of
arbitration clause is valid or not, the judgment passed by the Hon’ble Madras High Court in
20154 has become one such epiphany of confusion, but the court has respected and upheld the
validity of unilateral invocation only in cases where there was no protest from the other party
involved in the matter, where the party holding the sole option has exercised its option and the
other party has participated in the initial stages of proceeding after invocation, in the matter at
hand it is clearly seen that the respondent has been a persistent objector to the arbitration seated
at Singapore and did not expressed its willingness to be the part of the arbitration proceeding5,
rendering it, invalid.
6. That, the countries which uphold unilateral invocation of arbitration clause as valid, don’t
apply it blanketly and have certain riders attached while allowing them. One such case
depicting the principle was decided by the English court in the year 20156, the court allowed
for unilateral invocation of arbitration by the applicant as it saw ‘good practical reason’ for the
clause to exist as unilateral, the interest of the parties were not hindered, hence the court
accepted the invocation of arbitration clause which was done unilaterally by the appellant.
7. That, in the recent judgement passed by the Singapore court of Appeals7, the court held the
asymmetrical construction of the arbitration clause as valid, the reasoning given by the court
indicates that when the imbalance or power lies within one party and is suited for the interest
of both the parties, making the imbalance of the arbitration clause being irrelevant to both the
parties involved, then unilateral invocation of arbitration agreement stands on the valid ground,
which is clearly not the case in the matter at hand as the interest of respondent has been largely
hindered as it created a vacuum of participation for the respondent restraining him from
exercising his right to be heard and contest his claims.

3
Emmsons International Ltd. v. Metal Distributors, 2005 (80) DRJ 256.
4
Castrol India Ltd. v. M/S Apex Tooling Solutions and Ors., 2015 (1) LW 961.
5
Factual Matrix.
6
Barclays Bank plc. v Ente Nazionale di Previdenza, (2015) EWHC 2857 Comm.
7
Wilson Taylor Asia Pacific Pte. Ltd. v. Dyna-Jet Pte. Ltd., (2017) SGCA 32.

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8. That, it becomes pertinent to take into account the judicial pronouncement passed by the
American Court, which honored the procedure of unilaterally invoking the arbitration clause,
as it has become a common practice in the area of financial transactions but the court has also
concluded that duress, fraud or unconscionability are the grounds that can set aside the
unilateral exercise of invoking an arbitration clause as it is against the rule established by law.8
9. That, the Indian Courts have always given primacy to mutuality, the KK Modi case9 decided
by the Hon’ble Supreme Court has cleared this stance that mutuality is of utmost concern in
case of an agreement between the parties, this reasoning has been further elaborated by the
Apex Court in the Coca Cola case is indicative that when it becomes absolutely necessary for
a party to either accept or reject the whole clause attached to an agreement, then there exist no
agreement to arbitrate, even though the party has consented to be bound by the award as there
was no element of choice which remained in the hand of the party.
10. Arguendo, the Hon’ble Supreme Court has cleared its stance regarding the option given to one
party in case of appointment of arbitrator u/s 11 of the Act, if the decision lies in the ballpark
of one party and the other party involved has no say in case of his appointment, then such
clause will be deemed invalid10 as it is perceived to be against the policy of law, this was
further enhances by the Delhi High Court11 which further clarified that the option of appointing
the arbitrator who is a crucial figure in deciding the matter concerned must be exercised by
mutual consultation of both the parties, following such analogy it become clear that such
mutuality of deciding the arbitration steps and proceedings was not put forth before the
respondent and the petitioner has exploited its larger rights to undermine the respondent
causing grave injustice.
11. That, The Hon’ble Supreme Court clearing the immense confusion has clarified in the Perkins
case12 that when there lies an exclusivity in determining or charting the course of arbitration,
the outcome of the decision is influenced, hence it becomes indicative that the petitioner in the
given case has appointed the arbitrator of its own choice and has opted for a course of arbitral

8
AT&T Mobility LLC v. Conception, 563 U.S. 333 (2011).
9
KK Modi v. KN Modi, 1998 AIR SC 1297.
10
Trf Ltd. v. Energo Engineering Projects Ltd., (2017) 9 SCC 377.
11
D.K Gupta & Anr. v. Renu Munjal, (2017) SCC OnLine Del. 12385.
12
Perkins Eastman Architects DPC & Anr. V. HSCC (India) Ltd., Arbitration Application No. 32 of 2019.

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proceedings which is likely to fall in favor of the respondent, frustrating the sanctity of
unbiased nature of law.
B. THE AWARD, IF ENFORCEABLE IS AGAINST THE ‘PUBLIC POLICY’ OF INDIA.
12. That, the award granted by the Singapore Arbitral Tribunal in favor of the petitioner violates
the public policy of India enshrined within Sec. 48(2)(b) of the Act as it stands in the violation
of the conditions laid down in the case of Renusagar Power13, which is landmark judgement
in case of enforcement of foreign awards in India, the Apex Court laid down the meaning of
public policy in three categories: (i) Fundamental Policy of Indian Law; (ii) interest if India;
(iii) justice or morality, this judgement concretely cleared the stance of law in India, that what
subjects are considered to be part of the public policy, one important take away from the
court’s decision stands, that it is against the public policy of India, when a foreign award is
against the fundamental policies of Indian law, in the matter at hand the respondent has been
bound by an unequal unilateral clause which give undue advantage to the petitioner by
enabling the access to the option clause to invoke arbitration.
13. That, this unilateral invocation stands against the provision of Sec. 28 of the Indian Contract
Act, 1872, which explicitly denies restraint of legal proceeding to either of the parties involved
in an agreement, in the matter in dispute it is evident that respondent have been restrained by
the terms of the contract to access their right of legal proceedings as the petitioner has
inculcated these terms in the terms of the agreement signed between the parties.
14. That, in the Phulchand Exports case14 the Apex court has clarified that the ambit of the word
‘public policy of india’ used in section 48(2)(b) of the act applicable to the foreign awards has
to be given wider meaning so that to enable the enforcement of the award, but it does not say
that if it shook the conscience of the court then such matter which are not on the lines of
statutory provisions of India must be evaluated accordingly.
15. That, it is clear by the amendment act of 2015 that the courts have been curtailed of their
powers in setting aside the foreign award by looking into the merits of the case but is limited
to decide, if the matter is violative of law, which in the matter presented before this court falls
to be the scenario, as the original terms of the contract put the parties involved at unequal
footings, hence it infringes the provisions of the Contract Act as well as the judicial standpoint

13
Renusagar Power Co. Ltd. v. General Electric Co., 1994 AIR 860.
14
Phulchand Exports Ltd. v. O.O.O. Patriot, (2011) 10 SCC 300.

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for which the Indian legal system’s root has been based, hence the award shall be set aside by
the court observing the gross injustice caused to the respondent, also by the virtue of the
amendment of the act, it recognizes that an award is in conflict with the public policy of India,
if it is in conflict with the rudimentary notions of morality and Justice.
16. That, recently the Hon’ble Supreme court in the Vijay Kataria case15 has held that a foreign
award must only be set aside when its enforcement takes away the basic notion of justice, also
the court exclaimed that the foreign award must be read in entirety, if it defeats the prospects
of law then it is unenforceable, in the matter presented before the court it lies clearly the case
that basic notion of justice which requires an opportunity given to the party to be heard was
not given to the respondent and imposition of the award passed by this court would defeat the
integral justice notions of India.
17. That, the Supreme Court in its recent judgment in the NAFED case16, that if a foreign award
is contrary to and would have violated the Indian Law then it is considered to be against the
public policy of India, the main motive of the courts is to strike a balance in its approach,
Indian courts have time and again confirmed the need of a balancing act as it forms the core
of the principles that the judiciary in India is based upon, following the decision given in
NAFED, the matter present before this court has clearly relied upon imbalance of power in the
hands of the petitioner, if such award would be enforced, then it would defeat the core principle
of Justice.
II. THE ALLEGATION OF FORGERY AND FRAUD PUT FORTH BY G&T PVT. LTD. AMOUNTS TO
SERIOUS FRAUD ,RENDERING THE ISSUE, NON-ARBITRABLE

18. That, Fraud has been defined under the Indian Contract Act, 1872 as the act committed by a
party in order to deceive another party with the presence of requisite intent so as to induce the
other party to enter into contract17 based upon assertions which are false and don’t exist in
reality, fraud is a deliberate act of making assertions over the facts which the party knows to
be untrue, meant to lure in the other party in a contract based upon the agreement that is not
going to be deliberately honored by the party making the said assertion, Arbitrability of fraud
has always remained a question of extensive debate among the legal visionaries as it does not

15
Vijay Karia & Ors. v. Prysmian Cavi E Sistemi SRL & Ors., Civil Appeal No. 1544 of 2020.
16
National Agricultural Cooperative Marketing Federation Ltd. v. Alimenta S.A., Civil Appeal No. 667 of 2012.
17
Section 17 of the Indian Contract Act, 1872.

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find its existence in any statutory provisions of the Arbitration & Conciliation Act, 1996, hence
the courts have time and again made the air clear by judicial pronouncements filling the void
thus created.
19. That, Fraud has been divided into two broad categories, i.e Fraud Simplicitor (Simple Fraud)
that is mere allegation of fraud without having substantial backup of proof, in simple words,
it means mere allegation put forth by one of the parties so as to indicate the commission of
fraud. Then exist complex or serious fraud which involves proper evidence as a proof to
conclude that an act of fraud has been committed, the courts have made their stance clear that
simple fraud is arbitrable, whereas complex fraud involves the scrutiny of courts and hence is
non-arbitrable.
20. That, in light of the aforementioned arguments it becomes clear before the court that the award
obtained by the petitioner should not be enforced by the Hon’ble court as it infringes upon the
notion of public policy in India, moreover if such an award is enforced then it would defeat
the principles of justice upon which the Indian Justice System is based upon and would be bad
as per the rule of law.
A. THE DIFFERENCE BETWEEN SIMPLE AND COMPLEX FRAUD BY TRIALABILITY
21. That, the Hon’ble Supreme Court in its landmark judgement in the Ayyaswamy case18 has
given a considerate reasoning clarifying the difference that what matters can be heard by the
arbitral tribunal and what matters can be put forth before the courts to adjudicate. The bench
came to a conclusion that the Arbitration & Conciliation Act, 1996, which doesn’t specify on
the subject of arbitrability, on the matters presented.
22. That, there exist two rights, firstly, right in rem which is also understood as the right against
whole world. Secondly, right in personam which is a private right which affects an individual
and doesn’t affect the world in general, right in rem involves the need of adjudication of
matters which involve heinous crime or grave allegation of fraud which needs to be diagnosed
by investigation by the appropriate authority and has its effect on the public policy adopted by
the country. Whereas, right in personam involves matter of non-compliance of terms of
contract signed between two parties, which affect the individual rights and does not affect the

18
A. Ayyasamy v. Paramasivam & Ors., (2016) 10 SCC 386.

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society as a whole, hence such matters can be taken up by the arbitral tribunal for dispute
resolution.
23. That, the Apex court relied upon the reasoning given in the Booz Allen case19 which clarified
the distinction, the matter at hand involves the Government of Sikkim which awarded a
hydroelectric power project to the petitioner20, the construction in question involves public
money and hence is a matter of public policy of the country, the allegation put forth by the
petitioner against the respondent is backed by the report of a private forensic agency, which
concluded existence of forgery and fraud on the side of the respondent, which isn’t a mere
allegation but needs further scrutiny, hence rendering it non-arbitrable by the arbitration
tribunal.
B. THE QUESTION OF ARBITRABILITY : FRAUD SIMPLICITOR V. SERIOUS FRAUD
24. That, there exists multiple judicial pronouncements by various courts in the matter
demarcating the line between simple and complex fraud, however the Apex court has given
the much-required clarity by the virtue of its decision given in the 1962 case21, which has stood
the test of time, which made evidently clear that the question involving complex or serious
fraud which needs the intervention of the public authority which are the courts cannot be
subjected to resolution by private adjudication bodies such as the arbitral tribunals, this drove
away the much existing confusion which was laid down in the Russell v. Russell case22 by the
English court which was of the view that fraud is a subject which cannot be brought for
arbitration.
25. That, the Supreme Court in its decision in N. Radhakrishan23 has reasonably explained the
concept of arbitrability of fraud, with the stark changes in law at that time in the country, this
judgment became the landmark case in order to distinguish between the application of
arbitration in case of serious fraud with that of simple fraud, the judgement stated that complex
fraud being layered with evidence needs to be brought under the radar of a public body capable
of adjudication that are the courts, on the other hand the simple allegation put forth by the
parties against each other that some commission of fraud has been done is defined as fraud

19
Booz Allen & Hamilton Inc. v. SBI Home Finance Ltd. & Ors., (2011) 5 SCC 532.
20
Factual Matrix.
21
Abdul Kadir Shamsuddin Bubere v. Madhav Prabhakar Oak, 1962 AIR 406.
22
Russel v. Russel, (1880) LR 14 Ch. D 471.
23
N. Radhakrishnan v. Maestro Engineers & Ors., (2010) 1 SCC 72.

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simplicitor, becoming irrelevant to be investigated upon by the courts, hence making the
matter arbitrable before the tribunal, this judgement proved to be boon clearing the everlasting
confusion created in the minds of the parties bringing the matter for adjudication, the
judgement has proven its metal in the test of time as it was upheld in the Swiss timings case24
after a long period of time, the matter involved in swiss timing was different, but the Apex
Court chose to explain the concept of arbitrability of fraud in vivid details so as to rest the
arguments contesting the difference of opinion while bifurcating the question of fraud
involved.
26. That, the 246th Law Commission took account of all the aforementioned pronouncements and
opined that there exists a difference in the types of fraud involved in the matters brought before
the courts for adjudication, when a matter contains element of simple fraud then it is not be
adjudicated upon by the court, the arbitral tribunal possesses the competence to hear the matter
put forth, thus clearing the long standing dilemma, which was based on the holding of the
Ayyaswamy case, the Supreme Court opined that mere allegation of fraud simplicitor is not
enough to nullify the effect of arbitration agreement between the parties, giving the right of
adjudication to the arbitral tribunal, it is only under the ambit of provisions mentioned in Sec.
8 of the Act, discovers element of fraud which is serious in nature and requires the attention
of the courts to establish the authenticity of the claim, as it might indicate commission of a
serious crime which infringes the right in rem as it stands against the public policy of India, in
such cases the court has the power to set aside the arbitration award by the virtue of exercising
its power under Sec. 8 of the Act, deciding the matter on the basis of merits of the case.
27. Ergo, going forth with the conclusion of the Law Commission and the judicial
pronouncements by the Apex Court, it is evident that serious allegations inclusive of those of
forgery do not fall under the ambit of matter which are arbitrable before the private arbitration
tribunal, as was done by the arbitration tribunal seated at Singapore, the validity of the whole
agreement is threatened by the allegations put forth by the petitioner against the respondent,
thus requiring judicial scrutiny, incapacitating the tribunal of passing award in the given case.
This reasoning has been further strengthened by the recent judgement passed by the Hon’ble

24
Swiss Timings Ltd. v. Commonwealth Games 2010 Organizing Committee, (2014) 6 SCC 677.

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Supreme Court25, which reiterated the holding passed by the supreme court in the Ayyaswamy
case.
28. That, taking in account the legal precedents and the facts of the matter at hand it becomes clear
that the respondent while hiring a private investigating agency which is Cosmopolitan LLP to
look into the matter of fraud committed by the respondent has put in effort to investigate the
allegation of fraud, based upon the conclusion of the report filed, the matter was taken to the
Singapore Arbitration Tribunal which yielded a foreign award in favor of the petitioner, the
allegations involved pounces upon the crux of the contract between the parties hence requiring
further intervention by the judicial authority such as this Hon’ble High court to examine the
veracity of the claim filed by the petitioner which led to the awards, passed by the arbitral
tribunal based in Singapore, as a result the proceedings and the award stand bad in context of
the Indian legal System, hence becoming unenforceable.

25
Rashid Raza v. sadaf Akhtar, (2019) 8 SCC 710.

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PRAYER

It is hereinafter most humbly prayed before the Hon’ble Bombay High Court that, in the

light of the facts stated, issues raised, arguments advanced and authorities cited, the

Hon’ble Court may be pleased to uphold the contention of the Respondent and hold that:

Firstly, the application filed by the petitioner for enforcement of foreign award is not maintainable;

Secondly, the award by the Singapore Arbitral Tribunal is against the public policy of India and

must be set aside; and

Thirdly, the allegation of forgery is a complex fraud, hence is non-arbitrable.

And Pass any other Order or Direction, that it may deem fit in the Best Interest of Justice,

Fairness, Equity and Good Conscience.

For This Act of Kindness, the Respondent Shall Be Duty Bound Forever Pray.

Sd/-

(Counsel for Respondent)

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