Case Note & Summary
The petitioner, SPS Share Brokers Private Limited, filed a petition under Section 34 of the Arbitration and Conciliation Act, 1996, challenging an arbitral award dated 24 March 2009 passed by a Sole Arbitrator under the National Stock Exchange of India Ltd. (NSEI). The arbitration was conducted in Delhi as per the NSEI bye-laws. The respondent raised a preliminary objection regarding the jurisdiction of the Bombay High Court to entertain the petition. The court examined Clause 23 of the Member-Client Agreement, which provided that all trades and transactions shall be deemed to be made in Mumbai and that the courts at Mumbai shall have exclusive jurisdiction. Additionally, Clause 17 of the NSEI bye-laws also conferred jurisdiction on courts in Mumbai. The court noted that the petitioner was a member of both NSE and BSE, both situated in Mumbai, and that the transactions involved F&O segment governed by NSEI, with collateral shares sold through BSE. The court held that part cause of action arose in Mumbai, and the exclusive jurisdiction clause was valid and sufficient to confer jurisdiction on the Bombay High Court. Consequently, the court dismissed the preliminary objection and proceeded to hear the petition on merits.
Headnote
A) Arbitration - Jurisdiction - Section 34 of Arbitration and Conciliation Act, 1996 - Exclusive Jurisdiction Clause - The court considered whether it had jurisdiction to hear a petition challenging an arbitral award when the arbitration was conducted in Delhi but the Member-Client Agreement contained an exclusive jurisdiction clause in favor of Mumbai courts. The court held that the exclusive jurisdiction clause was valid and binding, and part cause of action arose in Mumbai, thus the Bombay High Court had jurisdiction. (Paras 1-5)
Issue of Consideration
Whether the Bombay High Court has jurisdiction to entertain a petition under Section 34 of the Arbitration and Conciliation Act, 1996 challenging an arbitral award where the arbitration was held in Delhi but the agreement between the parties contains an exclusive jurisdiction clause in favor of Mumbai courts.
Final Decision
The court dismissed the preliminary objection regarding jurisdiction and held that the Bombay High Court has jurisdiction to entertain the petition.
Law Points
- Jurisdiction under Section 34 of Arbitration and Conciliation Act
- 1996
- Exclusive jurisdiction clause
- Part cause of action
- Bye-laws of National Stock Exchange
Case Details
2013 LawText (BOM) (04) 71
Arbitration Petition No. 815 of 2009
Mr. Simil Purohit a/w Mr. Rohan Undale i/by Markand Gandhi & Co. for the Petitioner, Mr. B. K. Rai i/by S. S. Ravi for the respondent
SPS Share Brokers Private Limited
Nishit Nirmal Doshi, The National Stock Exchange of India Ltd.
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Nature of Litigation
Petition under Section 34 of the Arbitration and Conciliation Act, 1996 challenging an arbitral award.
Remedy Sought
The petitioner sought to challenge the arbitral award dated 24 March 2009.
Filing Reason
The petitioner challenged the award passed by the Sole Arbitrator under NSEI.
Previous Decisions
The arbitral award was passed on 24 March 2009.
Issues
Whether the Bombay High Court has jurisdiction to entertain the petition under Section 34 of the Arbitration and Conciliation Act, 1996 when the arbitration was held in Delhi but the agreement contains an exclusive jurisdiction clause in favor of Mumbai courts.
Submissions/Arguments
The respondent raised a preliminary objection that the Bombay High Court lacks jurisdiction as the arbitration was held in Delhi.
The petitioner relied on Clause 23 of the Member-Client Agreement and Clause 17 of the NSEI bye-laws to argue that Mumbai courts have exclusive jurisdiction.
Ratio Decidendi
The exclusive jurisdiction clause in the Member-Client Agreement conferring jurisdiction on Mumbai courts is valid and binding. Part cause of action arose in Mumbai, and the agreement itself provides for exclusive jurisdiction of Mumbai courts, which is sufficient to confer jurisdiction on the Bombay High Court.
Judgment Excerpts
This petition is under Section 34 of the Arbitration and Conciliation Act, (for short “Arbitration Act”).
The learned counsel, appearing for Respondent No.1 has raised preliminary objection with regard to the jurisdiction of this Court at Mumbai to entertain this petition.
In view of agreement itself, I am inclined to observe that the part of cause of action arose in Mumbai and that is sufficient for the parties to agree for such jurisdiction clause, as done in the present case.
Procedural History
The petitioner filed Arbitration Petition No. 815 of 2009 under Section 34 of the Arbitration and Conciliation Act, 1996 challenging an arbitral award dated 24 March 2009. The respondent raised a preliminary objection on jurisdiction. The court heard the preliminary objection and passed the present order.
Acts & Sections
- Arbitration and Conciliation Act, 1996: Section 34
