“It is clear, ‘serious allegations of fraud’ arise only if either of the two tests laid down are satisfied, and not otherwise. The first test is satisfied only when it can be said, the Arbitration Clause or agreement itself cannot be said to exist in a clear case in which Court finds, the party against whom breach is alleged cannot be said to have entered into the agreement relating to Arbitration at all. The second test can be said to have been met in cases in which allegations are made against State or its instrumentalities of arbitrary, fraudulent, or malafide conduct, thus necessitating the hearing of the case by a Writ Court in which questions are raised which are not predominantly questions arising from the contract itself or breach thereof, but questions arising in the public law domain.”

– Hon’ble Justice R.F. Nariman, Avitel Post Studioz Limited v. HSBC PI Holdings (Mauritius) Limited, [Civil Appeal No. 5145 of 2016] decided on 19.08.2020.

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“We have, in Avitel Post Studioz Limited v. HSBC PI Holding (Mauritius) Ltd., Civil Appeal No. 5145 of 2016, laid down the law on invocation of the ‘fraud exception’ in some detail, which reasoning we adopt and follow.”

– Hon’ble Justice R.F. Nariman, Deccan Paper Mills Co. Ltd. v. Regency Mahavir Properties, [Civil Appeal No. 5147 of 2016] decided on 19.08.2020.

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Rashid Raza v. Sadaf Akhtar, (2019) 8 SCC 710 laid down, if an allegation of fraud exists strictly between parties concerned, same will not be termed to be a serious nature of fraud and hence would not be barred for Arbitration.

– Hon’ble Justice Sudhanshu Dhulia, Sushma Shivkumar Daga v. Madhurkumar Ramkrishnaji Baja, [Civil Appeal No. 1854 of 2023] decided on 15.12.2023.

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The curtains have fallen. Courts exercising jurisdictions under Section 11(6) and Section 8 must follow mandate of Sub-Section (6A) and their scrutiny must be confined to examination of the existence of the Arbitration Agreement. It is just as necessary to follow a precedent as it is to make one.

– Hon’ble Justice Pamidighantam Sri Narasimha, Managing Director, Bihar State Food and Civil Supply Corporation Limited v. Sanjay Kumar, [Special Leave Petition (Civil) No. 10455 of 2020] decided on 05.08.2025.