The Indian Supreme Court decision in World Sport Group: fraud allegations referred to arbitration

Speedread

The recent decision of the Indian Supreme Court in World Sport Group (Mauritius) Ltd -v- MSM Satellite (Singapore) Pte Ltd¹ is considered by many as further evidence that India is becoming more arbitration-aware

The case concerned allegations of fraud. The relevant contracts included an arbitration clause referring disputes to arbitration in Singapore under the ICC (International Chamber of Commerce) Rules. The Bombay High Court considered the courts a more appropriate forum to consider allegations of fraud and issues relating to public funds. The Supreme Court overturned the decision. Referring to both the Indian arbitration legislation and the New York Convention, the Court considered that the allegations of fraud did not impact on the validity of the arbitration agreement. Furthermore, the fact that fraud was alleged did not render the agreement inoperative or incapable of being performed. As such, the agreement to arbitrate stood.

The decision is welcomed as providing clarity in this area and, together with other recent decisions (for example Shri Lal Mahal Ltd. -v- Progeto Grano Spa (see our briefing) and Bharat Aluminium Co. -v- Kaiser Aluminium Technical Services Inc. (see our briefing)), provide further evidence that the Indian courts are adopting a more international approach towards international arbitration.

Please click on the links below for the other articles in the April 2014 Arbflash:

• The impact of corruption on the ability to arbitrate
• Procedural fairness when a respondent fails to participate: the English High Court decision in Interprods -v- De La Rue
• Joining a non-signatory to an arbitration: Singapore High Court judgment in The Titan Unity (No.2)
• Spanish court confirms validity of asymmetric dispute resolution clauses
• Intervention by the courts: the Chief Justice of the Supreme Court of Western Australia quashes an award for lack of procedural fairness
• International news
• New JCAA Rules

_{¹ Civil Appeal No. 895 of 2014.}