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2012 DIGILAW 496 (BOM)

India Infoline v. Jani Clancey & Richards

2012-03-05

ANOOP V.MOHTA

body2012
Judgment 1. The Petitioner is registered Trading Member of the National Stock Exchange of India Ltd. (for short “NSE”). The Respondent is a client/constituent in view of the agreement dated 3rd September, 2007. The regular trading in the securities market were entered into by the parties. The Petitioner has challenged the interim order dated 29.9.2011 passed by the arbitral tribunal constituted under the NSE bye-laws. The Petitioners’ objection to counter claim of the Respondent was rejected and it is held that the counter claim is within limitation. The parties directed to proceed with the matter. 2. There arose dispute, the Petitioner invoked arbitration proceedings on 12.8.2008. By order dated 16.8.2010 the Petitioners’ claims as well as the Respondents’ counter claim were rejected, therefore challenge was made to the award. The matter was remanded. 3. The fresh arbitration proceedings were initiated by the Petitioner on 21.10.2010. The Respondents filed its written statement and counter claim on 22.2.2011. The learned arbitrator after hearing both the parties dismissed Petitioners’ objection on 8.8.2011 and held that the Petitioners’ claim is within limitation, however, by the order dated 29.9.2011 the tribunal held that the Respondents’ counter claim is also within limitation. The main matter is still pending. 4. Learned counsel appearing for the Respondents has raised preliminary objection that against the interim order the petition under section 34 is not maintainable. It cannot be treated as interim award. He also contended that even if it is so the petitioner has remedy under section 34(6) of the Arbitration and Conciliation Act, 1996 (for short “Arbitration Act”), therefore, the petition so filed should be dismissed on the sole ground. He also contended that the findings so arrived at by the arbitrator at this stage causes no prejudice to the parties as same can be agitated during the course of final hearing again. The arbitral award is defined under section 16(1) which also includes interim award. The arbitral award reads thus : “16. He also contended that the findings so arrived at by the arbitrator at this stage causes no prejudice to the parties as same can be agitated during the course of final hearing again. The arbitral award is defined under section 16(1) which also includes interim award. The arbitral award reads thus : “16. Competence of arbitral tribunal to rule on its jurisdiction.- (1) The arbitral tribunal may rule on its own jurisdiction, including ruling on any objections with respect to the existence or validity of the arbitration agreement, and for that purpose, (a) an arbitration clause which forms part of a contract shall be treated as an agreement independent of the other terms of the contract; and (b) a decision by the arbitral tribunal that the contract is null and void shall not entail ipso jure the invalidity of the arbitration clause. (6) A party aggrieved by such an arbitral award may make an application for setting aside such an arbitral award in accordance with section 34. ” 5. First of all, the rejection of application of the Petitioner and the finding that the counter claim is within limitation and further direction to proceed with the main matter at the preliminary stage where parties have not even led the evidence, in my view, cannot be stated and/or treated to be interim award so as to file section 34 petition to challenge the same. There is no counter claim either rejected and/or granted. In view of this the petition under section 34 so filed challenging the interim order, which is not an interim award, is unsustainable. Conceptually an interim order is different than interim award. 6. Section 16 empowers the arbitral tribunal to rule on its own jurisdiction including any objection with regard to the validity of the arbitration agreement. The objection to maintainability of counter claim basically on the ground of limitation is required to be adjudicated as it is question of law and facts. The conclusion that the counter claim is time barred cannot be stated to be final decision by the arbitrator on its own jurisdiction. 7. The objection to maintainability of counter claim basically on the ground of limitation is required to be adjudicated as it is question of law and facts. The conclusion that the counter claim is time barred cannot be stated to be final decision by the arbitrator on its own jurisdiction. 7. Even if the decision is taken by the arbitral tribunal at this interlocutory stage and decided to continue with the arbitration proceedings, the Petitioner has remedy to challenge the same in view of section 16(6) of the Arbitration Act, while challenging final arbitral award, therefore, also the petition so filed is unsustainable (Jain Studios Ltd. v. Maitry Exports Pvt. Ltd. 145 (2007) Delhi Law Times 490). 8. In view of above I am of the view that keeping all points open it is desirable that the arbitral tribunal to consider the submissions of both the parties on limitation after considering the evidence and material placed on record by the parties, therefore, the following order is passed: The petition is disposed of accordingly. No orders as to costs.