Signature Fraud Dispute No Bar to Section 11 Arbitration: Calcutta HC

Uma Devi Kejriwal Vs Rakesh Chowdhury And Anr. (Calcutta High Court)

Summary: The Calcutta High Court allowed a petition under Section 11(6) of the Arbitration and Conciliation Act, 1996 seeking constitution of an Arbitral Tribunal in disputes arising from a Deed of Partnership dated 01.07.2024 concerning M/s CRISPR Biopharma Inc. The petitioner had invoked Clause 25 of the partnership deed through notice dated 20.03.2026 and nominated an arbitrator, but the respondents did not nominate their respective arbitrators. The respondents opposed the petition principally on two grounds: first, that a civil suit challenging the genuineness and validity of the partnership deed was already pending; and secondly, that alleged fabrication of signatures went to the existence of the arbitration agreement itself and rendered the dispute non-arbitrable.

The Court rejected the first objection, holding that even pendency of an application under Section 8 does not bar exercise of Section 11 jurisdiction and, in the present case, no Section 8 application had even been filed in the civil suit. The possibility of parallel proceedings or inconsistent outcomes was not by itself a statutory ground for refusing constitution of the Arbitral Tribunal. On the fraud objection, the Court distinguished Rajia Begum v. Barnali Mukherjee.

The respondents admitted that they themselves had signed the partnership deed and disputed only the genuineness of signatures of the petitioner and Smt. Sita Kejriwal. The petitioner, however, affirmed and relied upon her signature and the deed. Consequently, there was prima facie no case that the arbitration agreement was non-existent between the parties before the Court. The alleged signature fabrication was treated as a disputed factual issue requiring evidence rather than fraud permeating the arbitration clause itself. Relying on SBI General Insurance Co. Ltd. v. Krish Spinning, the Court reiterated that a Section 11 court should not conduct a detailed examination or mini-trial on disputed facts except in cases of manifest and ex facie non-arbitrability.