Bombay High Court
Ise Securities & Services Ltd vs Power Flow Securities Co on 19 December, 2012
Author: Anoop V. Mohta
Bench: Anoop V. Mohta
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
ARBITRATION PETITION NO. 1317 OF 2010
ISE SECURITIES & SERVICES LTD.,
International Infotech Park, Tower No.7,
5th Floor, Sector-30, Vashi,
Navi Mumbai-400 703 ... PETITIONER.
V/s.
POWER FLOW SECURITIES CO.
Through its proprietress Bina Shah
336, Marshal House, 3rd floor,
Kolkata-700 001 ... RESPONDENT.
---
Mr. Shailesh Naidu i/by R.R. Legal for the Petitioner.
Mr. Krishna Raja a/with Mrityunjay Barai i/by LJ Law for the
Respondent.
---
CORAM : ANOOP V. MOHTA, J.
DATE : 19 DECEMBER, 2012.
ORAL JUDGEMNT :
Heard finally.
2 The Petitioner has invoked Section 34 of the Arbitration
and Conciliation Act, 1996. The Petitioner challenges Award dated 3 rd
May, 2010 passed by the sole Arbitrator at Calcutta; because as per
the agreement as well as the rules, bye-laws and regulations of
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National Stock Exchange of India Limited Rules, the parties agreed to
have their place of arbitration at Calcutta.
3 The learned counsel appearing for the Respondent has
raised a preliminary objection that this court has no jurisdiction to
entertain section 34 petition in view of the rules.
4
There is an agreement between trade member broker and
sub-broker. There is a separate tripartite agreement also between
trade member broker/stock-broker, sub-broker and client. Xerox
copies of which are on record. There is no denial to the binding
agreements where the jurisdiction of courts with regard to the all
trades, transactions and contracts is subject to the clauses 60 and
61 which read as under :
"60. Jurisdiction of Courts : All trades, transactions and
contracts are subject to the Rules, Bye-laws and Regulations of
the Stock Exchange on which the trades have been executed
and the parties to such trade shall be deemed to have submitted
themselves to the jurisdiction of courts in Mumbai for the
purpose of giving effect to the provisions of the Rules, Bye-laws
and Regulations of the Stock Exchange.
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61. The parties to this agreement agree that any
dispute/claim/ difference arising out of any transaction done or
entered into between the Client, Sub-broker and the Stock
Broker shall be subject to the exclusive jurisdiction of courts in
Mumbai to the exclusion of all other courts."
5
Merely because arbitration took place at Calcutta in view
of the specific rules, that itself may not be the reason to accept the
contention so raised by the learned counsel appearing for the
Respondent that this court has no jurisdiction. The place of the
arbitration is a different concept than court's jurisdiction in dealing
with section 34 application/petition. The concept "court" is defined
under the Arbitration Act. The aspects of jurisdiction of courts are
well known and settled.
6 The agreement dated 18th May, 2000 executed between
the Petitioner and Respondent shows that the agreement took place
at Mumbai on 18th May, 2000. The learned counsel appearing for the
Respondent has denied even the execution of the agreement at
Mumbai by placing on record a xerox copy of the first page of the
alleged agreement dated 28th January, 2000 for the first time
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executed at Calcutta between the Petitioner and Respondent No.1.
Therefore, there is a dispute even with regard to the place of signing
of this agreement so also its date. Even otherwise, considering the
scope and purpose of Section 34 of the Arbitration Act, it is not
possible for the court to consider any document for the first time in
such fashion, specifically when there was no such issue and or
dispute raised before the Tribunal with regard to the date and/ or
place of execution of the agreement between the parties.
7 This Court as well as the Hon'ble Supreme Court have
already held that the parties are bound by the clause of jurisdiction
specifically when out of two available court's jurisdiction, if a part of
the cause of action arose in either of any court's jurisdiction, a party
may waive and or accept a jurisdiction of a particular court. This is
permissible in the law. In the present case, the parties at the time
of entering into its commercial document selected jurisdiction of the
court in Mumbai as exclusive courts for settlement of their dispute
between the client, sub-broker and stock broker. This acceptance of
exclusive jurisdiction of Mumbai courts, in my view, goes to the root
of the matter and that itself is sufficient for rejection of the
preliminary objection so raised. Even otherwise, there is a part of
cause of action arose and in the present case, the involvement of
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national stock exchange, considering the nature of business and their
transactions just cannot be overlooked. I am inclined to observe that
this court has jurisdiction to entertain the present petition under
section 34 of the Arbitration Act. The banking documents also
support the same case of the Petitioner.
8 So far as the merits of the arbitration Award in question
is concerned, I am inclined to set aside the Award solely on the
ground of non availability of any reason on record though the
learned Arbitrator has mentioned the rival submissions of the
parties and the nature of dispute, yet before arriving at any
conclusion no respective supportive reasons whatsoever have been
provided. I am inclined to observe that mere noting of submissions
of both the parties and or issues itself is not sufficient. If reasons
are missing, I am inclined to observe that any order and or operative
part of the order and or conclusions so arrieved losses its
importance. The reasons, as contended under S. 31 read with
principle of natural justice, goes to the root of the matter. The
judicial propriety, apart from the principles of natural justice
requires that the party should be in a position to know and
understand on what ground the learned court/ arbitrator has
decided and or has passed the award for and or against the party.
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9 In my view section 34 of the Act, permits the court to
remand the matter. There is no bar basically when on the material
available on record including the original evidence and or
documents, the learned Arbitrator will be in a position to dispose of
the matter, on all the issues. There is no reason that the court
cannot remand the matter for reconsideration. In the present case,
as there are no reason given, it is necessary to remand the matter for
reconsideration.
10 All points are kept open. It is made clear that the present
arbitration proceedings initiated as per the rule, therefore, the
concerned National Stock Exchange Authority will take appropriate
steps to set up the tribunal and or place the matter before the same
learned arbitral Tribunal. The parties to take steps accordingly.
11 It is made clear that the parties are at liberty to take
appropriate steps and/ or proceedings for refund of the amount if
paid pursuant to the Award in question. Once the Award is
quashed and set aside, all the consequential reliefs/benefits or
actions also goes. The parties are at liberty to take steps in
accordance with the law. Hence, the following order :
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ORDER
(a) Award dated 3rd May, 2010 is quashed and set aside.
(b) The matter is remanded back for re-hearing on all points.
(c) The parties to take steps in accordance with law.
(d) The liberty is granted to settle the matter.
(e) The Arbitration Petition is disposed of in the above terms.
(ANOOP V. MOHTA, J) .....
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