Case Note & Summary
The petitioner, Kantilal Chhaganlal Securities Private Limited, a stock broker, challenged an arbitral award dated 29 April 2010 passed by a panel of arbitrators of the National Stock Exchange of India Limited (NSEIL). The respondent, Ms. Shilpa Pareek, a client, raised a preliminary objection regarding the jurisdiction of the Bombay High Court to entertain the petition under Section 34 of the Arbitration and Conciliation Act, 1996. The parties had entered into an Agreement between Stock Broker and Client at Mumbai on 14 October 2008. Clause 19 of the agreement stated that transactions on the exchange are subject to the Rules, Byelaws, and Regulations of the exchange, and parties submit to the jurisdiction of such court as may be specified by the Byelaws. The relevant Byelaw, Regulation 5.2 (Part A - Capital Market Segment), provided that the seat of arbitration for different regions shall be as specified, and for Rajasthan, the seat was Delhi. The court noted that the respondent resides in Jaipur, Rajasthan, and the seat of arbitration was Delhi. The court held that the jurisdiction under Section 34 is determined by the seat of arbitration, not by the general jurisdiction clause in the agreement. Since the seat was Delhi, the Bombay High Court had no jurisdiction. The petition was dismissed with no order as to costs.
Headnote
A) Arbitration - Jurisdiction - Seat of Arbitration - Section 34, Arbitration and Conciliation Act, 1996 - NSEIL Byelaws - The court held that the seat of arbitration is determined by the Byelaws of the National Stock Exchange of India Limited, which designated Delhi as the seat for Rajasthan. The general jurisdiction clause in the agreement did not confer jurisdiction on the Bombay High Court. The petition was dismissed for lack of jurisdiction. (Paras 2-4)
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 seat of arbitration is in Delhi as per NSEIL Byelaws.
Final Decision
The petition is dismissed for lack of jurisdiction. No order as to costs.
Law Points
- Jurisdiction of court under Section 34 of Arbitration and Conciliation Act
- 1996 is determined by seat of arbitration
- which is governed by NSEIL Byelaws
- not by general jurisdiction clause in agreement.
Case Details
2013 LawText (BOM) (01) 63
Arbitration Petition No. 956 of 2011
Mr. Rajesh Khandelwal for the Petitioner, Mr. Karan Shroff with Ms. Devika Nigade i/by M/s. Divya Shah Associates for the Respondent
Kantilal Chhaganlal Securities Private Limited
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Nature of Litigation
Challenge to arbitral award under Section 34 of the Arbitration and Conciliation Act, 1996.
Remedy Sought
Petitioner sought to set aside the arbitral award dated 29 April 2010.
Filing Reason
Petitioner challenged the award passed by the panel of Arbitrator of National Stock Exchange of India Limited.
Previous Decisions
Arbitral award dated 29 April 2010 passed by NSEIL arbitrators.
Issues
Whether the Bombay High Court has jurisdiction to entertain the petition under Section 34 of the Arbitration and Conciliation Act, 1996, given the seat of arbitration is Delhi as per NSEIL Byelaws.
Submissions/Arguments
Respondent raised preliminary objection that the court lacks jurisdiction because the seat of arbitration is Delhi as per NSEIL Byelaws.
Petitioner argued based on Clause 19 of the agreement that the court has jurisdiction.
Ratio Decidendi
The jurisdiction of a court under Section 34 of the Arbitration and Conciliation Act, 1996 is determined by the seat of arbitration. The seat of arbitration is governed by the Byelaws of the National Stock Exchange of India Limited, which designated Delhi as the seat for Rajasthan. The general jurisdiction clause in the agreement does not override the specific Byelaw provisions.
Judgment Excerpts
The learned counsel appearing for the Respondent has raised preliminary objection with regard to the jurisdiction of this Court to entertain the present Petition under Section 34 of the Arbitration and Conciliation Act, 1996.
Clause 19 of the said agreement is as under: ...
Here it is therefore, necessary to read and refer the relevant provisions of the byelaws of NSEIL.
Procedural History
The petitioner filed Arbitration Petition No. 956 of 2011 under Section 34 of the Arbitration and Conciliation Act, 1996, challenging an arbitral award dated 29 April 2010. The respondent raised a preliminary objection regarding jurisdiction. The court heard arguments and dismissed the petition on 3 January 2013.
Acts & Sections
- Arbitration and Conciliation Act, 1996: Section 34
