Abdul Kadir Shamsuddin Bubere Vs.
Madhav Prabhakar Oak  INSC 274 (20 September 1961)
GUPTA, K.C. DAS SHAH, J.C.
CITATION: 1962 AIR 406 1962 SCR Supl. (3) 702
Arbitration All persons interested in the subject
matter of dispute not made parties-If dispute could be referred to
arbitration-Asking for accounts-If amounts to allegation of fraud-Arbitration
Act, 1940 (X of 1940), s. 20.
An agreement with regard to a forest was
entered into between B the appellant and 0 and A the respondents. Apart from 0
and A another person was also interested in the said forest. The said agreement
mentioned other earlier agreements entered into with, regard to the said
forest. The operative part of the agreement was in these terms:-Should there be
a dispute between the parties in connection with this agreement or in
connection with the agreements dated 22.10.1948 and 5.5. 1952 or regarding Khan
Babadur Divakar's money or the jungle cutting or export or in 'any other way,
the same should be got decided in accordance with the current 'law by
appointing arbitrators and through them." Disputes arose between B the
appellant and respondents 0 and A. The respondents filed an application under
s. 20 of the Arbitration Act for reliefs including accounts and appointment of
The application was opposed by B the
appellant on the grounds inter alia that as one of the person who bad an
interest in the forest was not party to the application there could be no
reference to. the arbitration, as the whole dispute, as to the forest would not
be before the arbitrator and further, as there were allegations of fraud that
was a ground for not referring the dispute to arbitration.
Held, that where parties entered into an
arbitration agreement, knowing fully well that there was another person who was
interested, but leaving, him out, then the court should send the parties to the
forum chosen by them, even if the other person who might be interested, and
whose share was not in dispute, could not be made party before the arbitrator.
Where the share of a person, not a party
before the arbitrator, was not in dispute, there could not be any bar to
referring the dispute to arbitration on the ground that the whole dispute was
not before the arbitrator. The arbitrator would decide the dispute between the
parties before him and 703 give an award leaving out the share of the person
who was not a party before him.
Held, further, that when serious allegations
of fraud were made against a party and the party who was charged with fraud
desired that the matter should be tried in open court, that would be a
sufficient cause for the court not to order an arbitration agreement to be
filed and not to make a reference. But it was not every allegation imputing
some kind of dishonesty particularly in matters of accounts alleging that they
were not correct or certain items were exaggerated or allegations tending to
suggest or imply moral dishonesty or moral misconduct in the matter of keeping
accounts that would amount to such serious allegations of fraud as would impel
a court to refuse to order the arbitration agreement to be filed and refuse to
make a reference and to take the matter out of the forum which the parties
themselves had chosen.
In the present case, it cannot be said that
the reference desired was piecemeal and split up the cause of action. The
dispute raised was covered by the arbitration clause, and there was no such
serious allegation of fraud as would be sufficient for the court to say that
there was sufficient cause for not referring the dispute to arbitration.
Obiter. The pleadings in Mufassil courts
could not be considered too strictly.
Russel v. Russel,  14 Ch. 'D. 471,
Charles Osention and company v. Johnston, 
A. C. 130, Maharajah Sir Manindra Chandra Nandy v. H. V. Low & Co. Ltd. A.
I.R. 1924 Cal. 796, Narsingh Prasad Boobna v. Dhanraj Mills, I.L.R. (1942) 21
Pat. 544, Union of India v. Pirm Vishvadha Ghee Vyopar Mandal, 1. L. R. (1953)
423, Sudhangsu Bhattacharjee v. Ruplekha
Pictures, A I.R.
1954 Cal. 281 aid Manifia v. The Railway
Passengers Assurance Co. (1881) 44 L. T. 552, referred to.
CIVIL APPELLATE JURISDICTION : Civil Appeal
No. 305 of 1958.
Appeal from the judgment and decree dated
April 14/15,1955 of the Bombay High Court in Appeal from Order No. 28 of 1955.
S. B. Sukhthankar, S. N. Andley, Rameshwar
Nath and P. L. Vohra, for the appellant.
A. V. Viswanatha Sastri and Ganpat Rai, for
704 1961. September 20. The Judgment of the
Court was delivered by WANCHOO, J. This is an appeal on a certificate granted
by the Bombay High Court. An application was filed under s. 20 of the
Arbitration Act, No. X of 1940. (hereinafter referred to as the Act) by the two
respondents against the appellant praying that the arbitration agreement dated
February 27, 1953 may be filed in court, arbitration be made accordingly, and
thereafter a decree in terms of the award made by the arbitrator be passed.
The circumstances in which the application
was made were these. There is a forest in village Done, which belonged to three
persons, namely, Madhav Prabhakar Oak, respondent No. 1, (hereinafter referred
to as Oak), Babaji Chandrarao Rane, uncle of the second respondent (hereinafter
referred to as Babaji), Gajanan Babaji Rane (hereinafter called Gajanan).
Oka had six annas share in the forest, Babaji
eight annas share and Gajanan two annas share. It may be mentioned that
Gajanan's share was purchased by the appellant in November 1944. On October 22,
1948, a partnership agreement was arrived at between Babaji, Oak and the
appellant for cutting the forest. The value of the forest for the three owners
was fixed at Rs. 60,000/which was to be divided amongst them according to their
shares. The work of cutting was to be done by the appellant who appears to be
an experienced forest contractor. Any income over and above the expenditure
incurred in the cutting and the value of the forest was to be divided equally
amongst the three partners;
if there was any loss that was also to be
borne equally by them. It appears,. however, that nothing was done in pursuance
of this agreement, apparently because a suit had been filed by two persons with
whom there was an earlier agreement of 1939 about the cutting of this very
forest. It appears also that in March 1951 Gajanan and the appellant executed
another 705 document in which the price of Gajanan's share to be paid by the
appellant was raised. In May 1951 Babaji died.
Consequently in May 1952 another agreement
was executed between the appellant and the heirs of Babaji, namely, Anant
Yeshwant Rane respondent No. 2 (hereinafter referred to as Anant), Ambikabai,
widow of Babaji, Gajanan and his mother Devubai and Oak. This agreement
referred to the earlier agreement of 1948 and was obviously necessitated on
account of the death of Babaji. It confirmed that agreement and stated that it
was drawn up because of the necessity of Anant, Ambikabai and Devubai being
made parties to the settlement in the agreement of 1948. The consideration of
Rs. 60,000/was divided between the owners, and Rs 51,000/was to go to Oak,
Anant and Ambikabai and the rest represented the price for which the appellant
had purchased the share of Gajanan and his mother Devubai. Nothing seems to
have been done in pursuance of this agreement either. In October 1952, another
agreement was entered into between the appellant the two respondents and one
Khan Bahadur Divkar by which the cutting of the forest was assigned to Divkar
for a sum of Rs. 1,00,000/-. This amount was to be divided between the
appellant and the respondents; Anant was to get Rs. 44,800/-, Oak Rs. 35,700/and
the appellant Rs.
19,500/-. Divkar was unable to carry out his
part of this agreement. Eventually on February 27, 1953, an agreement was
entered into between the appellant and the two respondents as Divkar had not
carried out his agreement. It was agreed between the parties that the dispute
with Divkar be got decided and the forest be cut in accordance with the
agreements of October 22, 1948 and May 5, 1952. The operative part of this
agreement also contained a term for arbitration in al. 6(4), which in these
terms:-"Should there be a dispute between the parties in connection with
this agreement or in connection with the agreements 706 dated 22.10.1948 and
5.5.1952 or regarding Khan Bahadur Divkar's money or the jungle cutting or
export or in any other way, the same should be got decided in accordance with
the current law by appointing arbitrators and through them." It appears
that thereafter the forest was cut by the appellant ; but disputes appear to
have arisen between the parties to the last agreement of 1953; consequently
respondents Nos. 1 and 2 filed the application under s. 20 of the Act in August
The case put forward by the respondents in
the application was that the appellant, though he carried on the work of
cutting the forest, did not carry out the terms of the agreement of 1953 and
showed the statements of accounts intermittently to the respondents. It was
alleged that the accounts were not made up to date, and inspite of the
respondents' demand that the accounts should be made up to date, the appellant
did not do so. The respondents also demanded that the goods remaining to be
sold should be disposed of with the consent of all; but this was also not
agreed to by the appellant. The statement of accounts shown to the respondent
was not complete and correct. The whole stock of goods was not to be found in
the statement of accounts and the debit items seemed to have been exaggerated
and were not correct; and consequently it was not possible to carry on the
business of partnership with the appellant and it was necessary to dissolve the
partnership and take accounts of the partnership. It was also said that the appointment
of a receiver had become necessary in order to protect the interest of the
respondents and that an injunction should be granted restraining the appellant
from removing the stock in balance so as to avoid misappropriation thereof
pending the appointment of a receiver. The respondents prayed that the
agreement of February 1953 for referring the 707 dispute in connection with the
agreements dated October 22, 1948 and February 27, 1953 between them and the
appellant should be filed in court and necessary directions made by the court.
The application was opposed by the appellant.
The agreement of February 27, 1953 was admitted by the appellant; but it was
contended that no reference should be made to the arbitrator and a number of
grounds were urged in that connection.' It is not necessary for purposes of
this appeal to refer to all the grounds in reply to the application of the
respondents. We shall only refer to those grounds which have been urged before
us and they are as below :(1) Ambikabai, widow of Babaji, admittedly had a
share in the forest and as she was not a party to the application there could
be no reference to arbitration as the whole dispute as to the forest would not
be before the arbitrators.
(2) The respondents only desired in their
application that the disputes arising out of the agreements of October 22, 1948
and February 27, 1953 be referred to arbitration but did not include the
agreement of May 5, 1952, and therefore no reference should be made as it would
be a piecemeal reference resulting in splitting up the cause of action.
(3) The dispute sought to be referred was not
covered by the arbitration clause.
(4) The respondents had made allegations of
fraud against the appellant in their application and that was also a ground for
not referring the dispute to arbitration.
It may be mentioned that the respondents
later applied for the appointment of a receiver, and that application was
allowed. Eventually, however, the trial court dismissed the application under
s.20 on two main grounds namely, (1) that all the 708 parties who were
necessary in the, matter of accounting were not parties to the application
under s. 20, and (ii) that there were allegations of fraud against the
appellant and therefore this was not a fit case to be, referred to arbitration.
This was followed by an appeal to the High
Court by the present respondents. The High Court held that even though
Ambikabai had a share in the forest and was not a party to the application
under a. 20 her interest was sufficiently represented by Anant and therefore it
could not be said that all the parties interested in accounting would not be
before the arbitrator. On the question of fraud, the High Court took the view
that the allegations made in this case were not allegations of fraud at all and
in any case were not such allegations of fraud as would make it incumbent on
the court to exercise its discretion in favour of the appellant and refuse to
refer the dispute to arbitration. An argument was also raised before the High
Court that the appellant was challenging the very existence of partnership
between the parties and this question could not be referred to arbitration. The
High Court, however, repelled this contention and held that the existence of
the arbitration agreement was never challenged by the appellant. It therefore
allowed the appeal and ordered that the arbitration agreement be filed in court
and consequent proceedings be taken thereafter. As the judgment was of
reversal, the amount involved was more than Rs. 20,000/and the order was a
final order, the High Court granted a certificate; and that is how the matter
has come up before us.
Learned counsel for the appellant has urged
four points before us, which we have already indicated earlier. We propose to
deal with these points one by one.
Re.(1). It is urged that Ambikabai admittedly
has a share in this forest and as she is no party to the, application under s.
20 no reference should be made, as the entire dispute arising out of the 709
agreements of October 22, 1948 and May 5, 1952 would not be before the
arbitrator. This argument found favour with the trial court but the High Court
repelled it holding that Ambikabai's interest was sufficiently represented in
arbitration proceedings by Anant. If that is so, there could be no objection on
this ground to the filing of the arbitration agreement ; but even if that is
not so, we are of opinion that is no ground in the circumstances of this case
for not referring the dispute to arbitration in accordance with the arbitration
clause in the agreement of February 27, 1953. Babaji had a brother Yeshwant and
Anant is his son. It is not disputed that Babaji was holding eight annas share
in the forest on behalf of the joint family consisting of himself and his
nephew Anant, and his personal share in it was half, i.e., four annas. On his
death his personal share would go to his widow Ambikabai while Anant would have
the remaining half Anant appears to be the eldest male member of the family now
Therefore, in a sense the High Court was
right in holding that Anant would represent the entire interest of the joint
family which consisted of eight annas share in this forest.
But even if this was not so because at one
stage at any rate Ambikabai was also a party to the agreement of May 5, 1952,
we can see no reason why the dispute as between the appellant and the
respondents should not be referred to arbitration. The share of Ambikabai as we
have already stated above is not in dispute. Ambikabai was not a party to the
agreement of February 27, 1953, though she was a party to the agreement dated
May 5, 1952. The appellant was also a party to the earlier agreement of May
1952 and knew that Ambikabai had a share in this forest. Even so, he entered
into the agreement of February 27, 1953, with the two respondents and agreed to
the disputes between him and the respondents being referred to arbitration. We
fail to see how he can now say that the disputes between him and the 710
respondents should not be referred to arbitration because Ambikabai was not a
party to the agreement of February 1953.
The reason why Ambikabai did not join in the
application under s.20 was that she was not a party to the agreement of
February 1953 and could not therefore apply under s. 20; but that is no reason
why the dispute between the appellant and the two respondents should not be
referred to arbitration, particularly when there is no dispute as to the share
of Ambikabai in this forest. All that would happen would be that the arbitrator
would decide the dispute between the appellant and the respondents and give an
award leaving out the share of Ambikabai, the extent of which is not in
dispute. The matter might have been different if the share of Ambikabai was in
dispute; but as the share of Ambikabai and its extent are not in dispute, the
arbitrator can go into accounts and give an award with respect to the parties
before him, leaving out the four annas share of Ambikabai.
We see no reason why where parties entered
into an arbitration agreement of this nature knowing fully well that there was
another person who was interested but leaving her out, the court should not
send the parties to the forum chosen by them, even if the other person who
right be interested and whose share is not in dispute cannot be made party
before the arbitrator. Weare therefore of opinion that even if Anant may not be
able to represent the interest of Ambikabai in the arbitration proceedings that
will follow in this case, that is no reason for not giving effect to the
arbitration clause in the agreement of February 27, 1953 as between the parties
to that agreement The contention therefore of the appellant on this point must
Re.(2). It is true that in the application
under s. 20 the respondents have asked for the agreement of February 27, 1953
to be filed in court and the dispute in connection with that agreement and the
agreement of October 22, 1948 to be referred to 711 arbitration, and have not
specifically asked for reference of the agreement of May 5, 1952, even though
it was included in the agreement of February 1953. But as already indicated,
the agreement of May 1952 is merely in confirmation of the agreement of 1948
and when the arbitrator goes into the dispute between the parties he will
necessarily have to refer to the agreement of May 1952, so far as it is
relevant. The agreement of May 1952 had to be entered into because of the death
of Babaji. It is merely supplementary to the main agreement which is of October
22, 1948. In the circumstances when the dispute is referred to the arbitrator
under the agreement of February 1953 with respect to the agreement of October
1948, the arbitrator will be entitled to look into the confirmatory agreement
of 1952, for the main agreement was that of October 1948. We agree with the
view of the trial court in this connection that the pleadings in muffasil
courts cannot be considered too strictly; even the trial court was prepared in
case the matter should be referred to arbitrator to ask the arbitrator to
consider also the agreement of May 1952. The agreement of May 1952 would have
to be considered by any arbitrator who is going into the dispute arising out of
the agreement of October 1948. In the circumstances we are of opinion that it
cannot be ,said that the reference desired in this case is piecemeal and split
up the case of action.
The contention of the appellant on this score
must also fail.
Be,. (3). The contention under this head is
that the dispute sought to be referred was not covered by the arbitration
clause. We have already set out the arbitration clause and as we read it we
find it is of very wide import.
It provides for reference to arbitration of
all disputes arising out of agreements of October 22, 1948, May 5,1952 and
February 27, 1953. It also provides for reference of all disputes arising out
of the jungle 712 cutting or export or in any other way. In view of this wide
language of the arbitration clause it cannot be possibly said that the dispute
which has been raised in the present case is outside the terms of the arbitration
Reliance in this connection was however
placed on the opening words of cl. 6 of the agreement of February 1953, which
say that the agreement was arrived at "without prejudice to the contents
of the letter sent by the first party (namel y, the appellant) to the second
and third parties (namely, the respondents) on the date 7th of February, 1953,
and without the first party (namely, the appellant) withdrawing the said
letter". This letter contained certain contentions of the appellant based
on the agreements between the parties. Those words do not in our opinion in any
way out down the wide amplitude of the arbitration clause; at the best they can
only mean that the appellant was free to raise the contentions which he had
raised in this letter for the decision of the arbitrator.
Nor do these words confine the agreement of
February 1953 only to the dispute arising out of the agreement with Divkar as
contended for on behalf of the appellant. We are therefore of opinion that the
dispute raised in this case is covered by the arbitration clause, and the
contention of the appellant in this behalf must also fail.
Re(4). We now turn to the question of fraud.
The contention on behalf of the appellant in this connection is that serious
allegations of fraud have been made against him and therefore this is not a
case which should be referred to arbitration. Sub-section (4) of s. 20 lays
down that where no sufficient cause is shown, the court shall order the
agreement to be filed and make an order of reference to the arbitrator. It is
therefore open to a court under this subsection, where sufficient cause is
shown not to order the agreement to be filed and not to make a reference to the
arbitrator. The words of this sub-section leave a wide discretion in the court
to consider whether an order for 713 filing the agreement should be made and a
reference made accordingly. It is neither necessary nor desirable to lay down
in general terms what would be sufficient cause which would entitle a court to
refuse to order the agreement to be filed and thus refuse to make an order of
reference. The court will have to decide on the facts of each case whether
sufficient cause has been made out for not ordering the agreement to be filed
and not making the order of reference.
Learned counsel for the appellant, however,
contends that serious allegation of fraud has been generally held by courts to
be a sufficient ground for not ordering the agreement to be filed and not
making the reference'. He relies in this connection on the leading case of
Russel v. Russel (1). That was a case of partnership between two brothers
containing an arbitration clause. One of the brothers gave notice to the other
for dissolving the 'Partnership. The other brother thereupon brought an action
alleging various charges of fraud and claiming that the notice should be
declared void and no announcement of the dissolution of partnership should be
allowed. Thereupon the brother who was charged with fraud moved that the matter
be referred to arbitration under the arbitration clause. That was resisted and
the court held that "in a case where fraud is charged, the court will in
general refuse to send the dispute to arbitration if the party charged with
the, fraud desires a public inquiry. But where to arbitration is by the party
charging the fraud, the court, will not necessarily accede to it, and will
never do so unless a prima facie case of fraud is proved." This case
certainly lays down that where allegations of fraud are made, the party against
whom such allegations are made may successfully resist the reference to
(1)  14 Ch.D. 471.
714 The principle of this case was followed
in Charles Osenton and Company v. Johnston (1). In that case a firm of estate
agents and surveyors resisted the reference to an official referee under s. 89
of the Judicature Act of 1925. The decision of in official referee could not be
called in question by appeal or otherwise except on a point of law as provided
by s. 1 of the Administration of Justice Act, 1932. The firm therefore
contended that as their professional reputation was involved the matter should
not be referred to the official referee and the House of Lords held that as the
professional reputation of the appellants was involved, that question should not
be left to the final decision without appeal of an official referee but should
be tried before the normal tribunal of a High Court with a jury.
The principal of these cases has also been
followed in India with reference to cases coming under ss. 20 and 34 of the
Act. (See, Maharaja Sir Mahindra Chandra Nandy v. H. V. Low & Co., Ltd.
(2), Narsingh Prasad Boobna v. Dhanraj Mills(3), Union of India v. Firm
Vishvadha Ghee Vyopar Mandal Sudhangsu Bhattacharjee v. Ruplekha Pictures(5).
There is no doubt that where serious
allegations of fraud are made against a party and the party who is charged with
fraud desires that the matter should be tried in open court, that would be a
sufficient cause for the court not to order an arbitration agreement to be
filed and not to make the reference. But it is not every allegation imputing
some kind of dishonesty, particularly in matters of accounts, which would be
enough to dispose a court to take the matter out of the forum which the parties
themselves have chosen.
This to our mind is clear even from the
decision in Bussel's case (6). In that case there were allegations of
constructive and (1)  A. C. 130.
(2) A. I. R. 1924 Cal. 796.
(3) I. L. R. (1942) 21 Patna 544.
(4) I.L. R. (1953) 1 All. 423.
(5) A.I.R.1954. cal. 281.
(6)  14 Ch. D. 471.
715 actual fraud by one brother against the
other and it was in those circumstances that the court made the observations to
which we have referred above. Even so, the learned master of the Rolls also
observed in the course of the judgment at p. 476 as follows :
",Why should it be necessarily beyond
the purview of this contract to refer to an arbitrator questions of account,
even when those questions do involve misconduct amounting even to dishonesty on
the party of some partner ? I do not see it. I do not say that in many cases
which I will come to in the second branch of the case before the Court, the
Court may not, in the exercise of its discretion, refuse to interfere; but it
does not appear to me to follow of necessity that this clause was not intended
to apply to all questions, even including questions either imputing moral
dishonesty or moral misconduct to one or other of the parties." We are
clearly of opinion that merely because some allegations have been made that
accounts are not correct or that certain items are exaggerated and so on that
is not enough to induce the court to refuse to make a reference to arbitration.
It is only in cases of allegations of fraud of a serious nature that the court
will refuse as decided in Bussel's case (1) to order an arbitration agreement
to be filed and will not make a reference. We may in this connection refer to
Minifie v. The Railway Passengers Assurance Company (2). There the question was
whether certain proceedings should be stayed; and it was held that not withstanding
the fact that the issue and the evidence in support of it might bear upon the
conduct of a certain persons and of those who attended him and so might involve
a question similar to that of fraud or no fraud, that was no ground for
refusing stay. It is (1)  14 Ch. D. 471.
(2) (1881) 44 L.T. 552.
716 only when serious allegations of fraud
are made which it is desirable should be tried in open court that a court would
be justified in refusing to order the arbitration agreement to be filed and in
refusing to make a reference.
Let us therefore turn to the allegations in
this case to see what their nature is. These allegations are that (i) the
accounts were not made up to date, and even on demand by the respondents, the
appellant did not bring them up to date; (ii) the statements of accounts which
were shown by the appellant were not complete and did not appear to be correct;
and (iii) the whole stock of goods was not to be found therein and the debit
items appeared to be exaggerated and incorrect. These were the only allegations
with respect to the accounts in the application and they do not in our opinion
amount to serious allegations of fraud against the appellant which would
necessitate that there should be a trial in open court. Such allegation as to
the correctness or otherwise of entries in the accounts are often made in
accounts suits; but they in our opinion are not such serious allegations of
fraud as to induce a court to order that the arbitration agreement should not
be filed and no reference should be made. Besides these allegations as to
accounts the respondents also said that an injunction should be granted
restraining the appellant from removing the stock so as to avoid
misappropriation thereof pending the appointment of a receiver. That was not an
actual allegation of misappropriation; it merely said that the respondents were
afraid that there might be misappropriation in future unless an injunction was
issued and a receiver appointed. Further in the affidavit in support of the
application for appointment of receiver after referring to their own
conclusions from the state of accounts, the respondents said that they had not
received the true and complete account of the felling of the jungle, ready
goods, the goods sold and the goods in balance from the appellant.
717 They also said that they suspected that
on their conclusions from the accounts supplied to them, there might be
misappropriation of the goods and of money. They further alleged that in the
accounts shown to them, the sale of charcoal was shown at a rate much lower
than the prevailing market rate and under these circumstances the respondents
apprehended that if the work of the sale of goods remained in the hands of the
appellant, the real price of the goods would not be realised. There is no
allegation, however, that in actual fact the appellant had made secret profits
by selling goods at a higher price and showing a lower price in the account.
The respondents pointed to the entries in the account which showed the lower
rate of the sale price in support of their apprehension that if the work of
sale of goods remained in the hand of the appellant the real price would not in
future be realised. A perusal therefore of the application under s. 20 and the
affidavit filed in support of the application for appointment of receiver does
not disclose any serious allegations of fraud against the appellant. What it
discloses is that the respondents were not satisfied with the accounts
submitted to them and were suspicious that they did not disclose the true and
complete state of affairs. Such allegations, as we have already remarked are
often made in account suits and if they were to be sufficient ground for not
referring an account suit to arbitration on the ground of fraud, hardly any
arbitration agreement in a matter in which accounting would be necessary could
be referred to arbitration. That is why we emphasise that even in the leading
case of Russel, (1) the learned Master of the Rolls was at pains to point out
that it could not necessarily be said in a case of accounts that no reference
to arbitration should be made, even though questions relating to accounts which
might involve misconduct amounting even to dishonesty on the part of some partner
might arise in the arbitration proceedings and even cases where moral
dishonesty or moral misconduct is attributed to one party or the other might be
718 referred to arbitration. It seems to us that every allegation tending
suggest or imply moral dishonesty or moral misconduct in the matter of keeping
accounts would not amount to such serious allegation of fraud as would impel a
court to refuse to order the arbitration agreement to be filed and refuse to
make a reference. Looking to the allegations which have made in this case we
are of opinion that there are no such serious allegations of fraud in this case
as would be sufficient for the court to say that there is sufficient cause for
not referring the dispute to arbitration. This contention of the appellant must
also therefore fail.
The appeal therefore fails and is hereby
dismissed with costs.