1. The present Notice of Motion is taken out by the Applicant/Defendant (“the Defendant”) in the above Suit under the provisions of Section 8 of the Arbitration and Conciliation Act, 1996 (“the Act”), seeking to refer the parties to the above Suit to arbitration as contemplated under the Arbitration Agreement between the Plaintiff and the Defendant contained in Clause 3.1.2 and Clause 15.4 of the Bye-Laws of the Defendant Exchange (“Byelaws”), as also Clause 11.11 of the Undertaking for Internet Based Trading (“UIBT”) given by the Plaintiff to the Defendant Exchange.

2. The Plaintiff is a private limited company incorporated under the provisions of the Companies Act, 1956, and is inter alia engaged in the business of manufacturing and selling edible oils. The Defendant is an unlisted public company incorporated under the provisions of the Companies Act, 1956, and is the national level institution that carries on business as a trading exchange providing for an electronic trading platform for spot contracts in various commodities on a compulsory delivery basis.

3. According to the Plaintiff, in or around March, 2012, the Plaintiff sought to participate in the Defendant Exchange based on the representations made by the officials of the Defendant and with an understanding that the Defendant is duly constituted under Indian laws and that the Defendant is authorized to offer various types of contracts on the Exchange under the supervision and control of the Forward Markets Commission (“FMC”).

4. The Plaintiff commenced trading on the Exchange under its Membership ID No. 14180 on 5th March, 2012. At the time of taking membership of the Defendant, the Plaintiff was verbally informed by the representatives of the Defendant that the documentation for membership would be completed subsequently and accordingly, the Plaintiff was only provided with Membership ID No. 14180.

5. On 5th March, 2012, the Plaintiff entered into various agreements and addendums (each valid for a period of 11 months viz. until 4th February, 2013) with the Defendant to avail the warehousing services provided by the Defendant at various locations. In terms of the said agreements and addendums (“Warehouse Agreements”), the Defendant offered its warehouse management services at the charges specified therein.

6. On 22nd August, 2012 and 3rd September, 2012, vide emails of even dates, the representatives of the Defendant requested the Plaintiff to execute and provide (a) the Membership Agreement in the format provided therein; (b) a postdated cheque (PDC) as per Clause 9 of the said Agreement; and (c) a postdated cheque declaration (PDC Declaration) in the format provided therein. The Defendant refers to the Membership Agreement as the “Exchange-Member Agreement”.

7. On 25th March, 2013, the Plaintiff by hand delivery, delivered a blank cheque bearing No. 635423 along with the PDC Declaration to the Defendant, the receipt of which was acknowledged by the Defendant. The said cheque was issued by the Plaintiff under the advice of the Defendant as the Plaintiff did not have any predetermined trading exposure contemplated under Clause 9 of the said Agreement. On 17th April, 2013, the Plaintiff executed and sent the said Agreement to the Defendant.

8. As a matter of practice, whenever the members/participants of the Exchange were allowed to commence trading in any commodity, the Defendant would issue a circular setting out (i) the contract specifications; (ii) the quality and quantity parameters; (iii) the charges relating to trading settlement and delivery; (iv) the procedures, norms, conditions of delivery, quality check and withdrawal process, (v) the auction procedure; and (vi) other terms and conditions applicable to such trades.

9. Every trade conducted by the members on the Defendant Exchange was intended to be an independent trade with an obligation cast on the seller that each contract entered into by it should result in compulsory delivery. As a matter of illu