- (1.) This is an application to set aside an award made under the Arbitration and Conciliation Act, 1996. It was made in Mumbai on 28th May, 2001 by the Arbitral Tribunal comprising of three arbitrators. It was constituted under the Rules, By-laws and Regulations of the Mumbai Stock Exchange. Although, an arbitral award is under challenge, this Court cannot straight away go into the merits of the award. The jurisdiction of this Court to try this application is challenged. The point has to be decided. This arbitration took place without the intervention of the Court. An execution application was taken out by the respondent-award holder in this Court, but subsequently withdrawn. At the date of consideration of this application, there is no other application pending in this Court.
(2.) If one goes by the framing of the parties and the cause of action, on the face of it, this Court appears to have jurisdiction to entertain this application. This is so because the respondent is within jurisdiction. But, the respondent relies on Regulation 226C of the Rules, By-laws and Regulations of Mumbai Stock Exchange. It is in the following terms: In case of all claims (whether admitted or not), differences and disputes arising out of or in relation to all contracts referred to in sub-clause (a) the parties concerned shall be deemed to have agreed and acknowledged that such contracts have been entered into and are to be performed within the city of Bombay, that they are subject to arbitration in accordance with the provisions relating to arbitration other than between members contained in these Bye-Laws and Regulations and that they are subject to the jurisdiction of the Courts in Bombay. Regulation 248, being the arbitration clause is also relevant and is in the following terms: 248. (a) All claims (whether admitted or not) difference and disputes between a member and a non-member or non-members (the terms 'non-member' and 'nonmembers' shall include a remisier, authorised clerk, a sub-broker who is registered with SEBI as affiliated with that member or employee or any other person with whom the member shares brokerage) arising out of or in relation to dealings, transactions and contracts made subject to the Rules, Bye-laws and Regulations of the Exchange or with reference to anything incidental thereto or in pursuance thereof or relating to their construction, fulfillment or validity or in relation to the rights obligations and liabilities of remisiers, authorised clerks, sub-brokers, constituents, employees or any other persons with whom the member shares brokerage in relation to such dealings, transactions and contracts shall be referred to and decided by arbitration as provided in the Rules, Bye-laws and Regulations of the Exchange. (b) (c) If any claim (whether admitted or not), difference or dispute arises between a sub-broker who is registered with SEBI as affiliated with a member and his constituent arising out of or in relation to dealings, transactions and contracts between the constituent and the sub-broker made subject to the Rules, Bye-laws and Regulations of the Exchange or with reference to anything incidental thereto or in pursuance thereof or relating to their construction fulfillment or validity or in relation to the rights, obligations and liabilities of the constituent, the sub-broker or the member in connection therewith, then such claim, difference or dispute shall be brought to the notice of the member by the constituent in writing within six months from the date of the claim, difference or dispute arising and the same shall as far as possible be settled with the help of the member failing which it shall be brought to the notice of the Exchange for resolution. If a claim, dispute or difference persists, the same shall be referred to and decided by arbitration as provided in the Rules, Bye-laws and Regulations.
(3.) The preliminary submission of the learned Counsel for the petitioner is that although they entered into a contract for sale and purchase of shares with the respondent, they did not agree with them to be bound by the regulations of the Mumbai Stock Exchange. Consequently, neither the arbitration clause nor the forum selection clause applies.;