Gauhati High Court: Mere Allegations Of Fraud Not Directly Challenging Arbitration Agreement Do Not Render Disputes Non-Arbitrable

The Gauhati High Court addressed whether disputes with allegations of fraud can always be said to be non-arbitrable. The Court held that merely because a party alleges fraud, that does not automatically disqualify the dispute from arbitration if the underlying arbitration agreement is not itself directly attacked. If the fraud is collateral or incidental to the subject matter and does not impugn the arbitration clause itself, the arbitrator is competent to decide fraud issues. Only when there is a direct challenge to the arbitration agreement (e.g., that it is fraudulently induced, or void/voidable) can non-arbitrability be considered. The Court emphasised preserving parties’ autonomy in arbitration, and just because fraud is alleged doesn’t mean the courts must assume non-arbitrability. This helps avoid delay and unnecessary litigation in seeking to avoid arbitration just by inserting fraud allegations.