2010 Supreme(Bom) 106

High Court of Judicature at Bombay
THE HONOURABLE MR. JUSTICE ANOOP V. MOHTA
M/S. Narayan Securities Ltd.
Versus
Pramod Kumar Aneja
ARBITRATION PETITION NO. 183 OF 2009
Decided on : 21-01-2010

Headnote:Arbitration & Conciliation Act, 1996 - Section 34 - Arbitral award - Challenged by petitioner under Section 34 of Act - Award passed by sole arbitrator in arbitration reference under rules of national stock exchange (NSEIL Bye-laws) - Jurisdiction - Application for arbitration before National stock Exchange filed about 19 months after filing of original one, not in proper form - Arbitrator passed award against petitioner overruling plea of limitation - On review application filed under Section 33 of Arbitration Act, Arbitrator maintained award - Held - Petitioner, a constituent member of exchange - Doing online trading from Hansi (Haryana State) with his office address of Delhi - Mumbai Regional Office have no jurisdiction to deal with disputes - Only Delhi Regional Office has jurisdiction - Arbitral Tribunal has no jurisdiction to pass award at Mumbai - Impugned award set aside - Arbitration petition allowed. - From the plain reading of above provisions and in the present facts and circumstances, admittedly, the petitioner/trading member and the respondent/the Constituent, after execution of the agreement had executed all the transactions through online trading connectivity provided by the petitioner at Hansi (Haryana). The petitioner has its registered office and dealing office having address of New Delhi. The Mumbai Regional Arbitration Centre, in view of above clauses/regulations has no jurisdiction to register the arbitration application and to proceed with the same as done in the present case. The Delhi Regional Arbitration Centre has jurisdiction as the differences/disputes arose between the parties arising out of the said online transaction. The dealing office of the trading member from which the dealing was carried out in the present case was at Delhi as per Clause 5.3, the Seat of Arbitration, Regional Arbitration Centre, therefore, as per Clause 5.2 would fall within the jurisdiction of Delhi and not Mumbai.

       Even as per clause 5.3-A, in case of any claims, disputes and differences arising out of internet trading between the constituent and the Trading Member, the Seat of Arbitration shall be the Regional Arbitration Centre within the area in which the Constituent ordinarily reside at the time of relevant trading.

       The respondent, therefore, at the relevant time was in Hansi during the period in which he traded through the petitioner. The respondent at the time of filing of this petition and/or presently residing in Pune that itself, is not sufficient to hold that the present application/such application is maintainable within the jurisdiction of the present Arbitral Forum as the respondent now/presently residing in Pune. The constituent’s ordinary residence at the time of relevant trading is important and not the subsequent response and/or the residence at the time of filing of application. The fact that the business was transacted at the relevant time at Hansi, as per the agreement and he was residing there at the time of relevant trading the Seat of Arbitration shall be the RAC in which area the respondent resided i.e. at Delhi as per Clause 5.2 covering the Haryana State.

       The Bye-laws/Regulations so framed are mandatory. The parties are bound by the agreements and also, bye-laws and the regulations. Therefore, all the concerned parties need to file application and the arbitrator also need to proceed with the same considering the Seat of Arbitration and respective jurisdiction considering the Criteria for selection of the Seat of Arbitration. There is nothing on record to show that the parties have waived this clause of jurisdiction and, accordingly, proceeded. There was preliminary objection raised at the time of hearing before the Tribunal and the Tribunal has also dealt with the same. The submission, therefore, on the basis of preliminary objection as raised, in view of above clauses and the facts and circumstances of the case just cannot be overlooked, after noticing the agreement between the parties including the relevant bye-laws and regulations and in view of the fact that at the relevant time, the respondent had traded at Hansi in Haryana.

       Resultantly, the petition is allowed without observing anything on the merits of the matter, but only for want of jurisdiction. The arbitral tribunal has no jurisdiction to pass the award at Mumbai as the dispute/difference between the parties falls within the ambit of RAC, Delhi and not RAC, Mumbai.