Case Note & Summary
The petitioner, ISE Securities & Services Ltd., filed a petition under Section 34 of the Arbitration and Conciliation Act, 1996, challenging an arbitral award dated 3rd May 2010 passed by a sole arbitrator at Calcutta. The respondent, Power Flow Securities Co., raised a preliminary objection that the Bombay High Court lacked jurisdiction because the arbitration was held at Calcutta. The court examined the agreements between the parties, including a tripartite agreement, which contained clauses 60 and 61. Clause 60 stated that all trades, transactions, and contracts are subject to the Rules, Byelaws, and Regulations of the National Stock Exchange of India Limited, and parties submit to the jurisdiction of courts in Mumbai. Clause 61 provided that any dispute arising out of transactions between client, sub-broker, and stock broker shall be subject to the exclusive jurisdiction of courts in Mumbai. The court noted that the arbitration was held at Calcutta only because the rules of the exchange required arbitration at that venue, but the exclusive jurisdiction clauses in the agreement were binding. The court held that the mere fact that arbitration took place at Calcutta does not divest the Bombay High Court of its jurisdiction to entertain a Section 34 petition, as the parties had agreed to the exclusive jurisdiction of Mumbai courts. The court overruled the preliminary objection and directed that the petition be heard on merits.
Headnote
A) Arbitration Law - Jurisdiction under Section 34 - Exclusive Jurisdiction Clause - Section 34 of the Arbitration and Conciliation Act, 1996 - The court held that where the agreement between parties contains clauses conferring exclusive jurisdiction on courts in Mumbai for all disputes, the mere fact that arbitration proceedings were held at Calcutta does not oust the jurisdiction of the Bombay High Court to hear a Section 34 petition. The parties are bound by the exclusive jurisdiction clauses (Paras 2-6).
Issue of Consideration
Whether the Bombay High Court has jurisdiction to entertain a petition under Section 34 of the Arbitration and Conciliation Act, 1996, when the arbitration was held at Calcutta but the agreement confers exclusive jurisdiction on courts in Mumbai.
Final Decision
The court overruled the preliminary objection regarding jurisdiction and directed that the Section 34 petition be heard on merits.
Law Points
- Jurisdiction under Section 34 of Arbitration and Conciliation Act
- 1996
- Exclusive jurisdiction clauses
- Place of arbitration vs. court jurisdiction
- Rules of National Stock Exchange of India Limited
