Award In Which Serious Allegations Of Fraud Are Not Decided Must Be Set Aside On Grounds Of Patent Illegality: Gujarat High Court

The Gujarat High Court ruled that an arbitral award must be set aside if it fails to address serious allegations of fraud. The case involved a lease agreement where the claimants alleged that the arbitration agreement was entered into by fraud and collusion. The arbitrator did not address these allegations in the award, leading the court to find the award patently illegal under Section 34 of the Arbitration Act. The court emphasized that ignoring such serious allegations undermines the integrity of the arbitration process and violates principles of natural justice. This decision underscores the necessity for arbitrators to thoroughly examine and address all significant claims, especially those involving fraud, to ensure fairness and legality in arbitral awards.