Supreme Court Rules: Forged Arbitration Agreements Are Non-Arbitrable
- SMG & Co.
- Feb 11
- 3 min read
Barnali Mukherjee v. Rajia Begum
The Supreme Court of India delivered a landmark judgment on February 2, 2026,
Introduction
In a significant ruling reinforcing the foundational principle of consent in arbitration, the Supreme Court of India in Barnali Mukherjee v. Rajia Begum held that disputes alleging forgery of the very document containing an arbitration clause strike at the root of arbitral jurisdiction and cannot be referred to arbitration.
The judgment draws a clear doctrinal boundary: while arbitration law in India strongly favours minimal judicial interference, questions going to the existence of the arbitration agreement itself must be judicially determined at the threshold.
Factual Background
The dispute arose from an “Admission Deed” dated 17 April 2007 concerning the partnership firm M/s RDDHI Gold. The deed allegedly inducted Respondent No. 1 (Rajia Begum) as a partner and recorded the retirement of Respondents Nos. 2 and 3.
The appellant, Barnali Mukherjee, contended that:
• The Admission Deed was forged and fabricated
• It surfaced only in 2016
• There had been no recognition of Respondent No. 1 as a partner in business records for nearly a decade
• The arbitration clause relied upon formed part of the allegedly forged document
Despite these objections, arbitration was invoked under Sections 8 and 11 of the Arbitration and Conciliation Act, 1996, resulting in conflicting High Court decisions—one refusing reference on account of fraud allegations, and another directing the matter to arbitration.
Issues Before the Supreme Court
The central question was:
Whether allegations that the underlying agreement itself is forged render the dispute non-arbitrable at the referral stage under Sections 8 and 11 of the Act
Judicial Analysis
1. Arbitration Is Founded on Consent
Justices P.S. Narasimha and Alok Aradhe emphasised that arbitration derives its legitimacy from mutual consent. Where the existence of the arbitration agreement is itself under serious challenge on grounds of forgery, the arbitral tribunal cannot assume jurisdiction without prior judicial scrutiny.
The Court reaffirmed the principle that kompetenz-kompetenz does not override the court’s duty to examine the foundational existence of an arbitration agreement
2. Distinguishing Fraud Simpliciter from Root-Level Fraud
Relying on earlier precedents including:
the Court reiterated the distinction between:
Fraud simpliciter (which may still be arbitrable), and
Fraud that permeates the entire agreement, including the arbitration clause itself.
Where allegations go to the authenticity of the document containing the arbitration clause, such disputes are non-arbitrable because they challenge the very existence of the arbitration agreement.
In the present case, the Court found that the allegations were not bald or tactical. Documentary inconsistencies, lack of original records, and surrounding circumstances raised serious and credible doubt regarding the deed’s authenticity.
3. Scope of Judicial Review at Referral Stage
The Court clarified that while referral courts conduct only a prima facie examination, this does not mean mechanical reference.
Where credible material suggests that the arbitration agreement itself may be forged, courts must first determine that issue before exercising power under Sections 8 or 11.
Additionally, the Court held that the High Court, while exercising jurisdiction under Article 227 of the Constitution, had exceeded its supervisory limits by re-appreciating evidence and directing reference.
Decision
The Supreme Court:
Quashed the High Court’s order dated 24 September 2021 referring the matter to arbitration
Upheld the earlier order dated 11 March 2021 refusing appointment of an arbitrator
Held that disputes involving alleged forgery of the arbitration agreement are non-arbitrable
The case is reported as Barnali Mukherjee v. Rajia Begum, 2026 SCC OnLine SC 135.
Significance of the Judgment
This ruling reinforces three critical principles for arbitration practice in India:
Judicial gatekeeping remains vital at the threshold stage
The pro-arbitration policy does not extend to validating potentially forged agreements
Courts must distinguish between ordinary contractual disputes and challenges to the existence of the arbitration clause itself
The judgment strengthens doctrinal clarity around Sections 8 and 11 proceedings and ensures that arbitration cannot be invoked as a shield where consent is fundamentally disputed.
Conclusion
While India continues to consolidate its pro-arbitration jurisprudence, this decision reaffirms a foundational truth: arbitration cannot exist without consent.
Where the very document containing the arbitration clause is alleged to be forged, the matter must first pass judicial scrutiny. Only a valid arbitration agreement can confer jurisdiction on an arbitral tribunal.
Author:
Adv. Saloni M. Ghule
Founder & Senior Partner
SMG & Co.
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