1995 (7) TMI 313 - HC - Companies Law

Summary

Issues:
The petition seeks a declaration regarding the validity of the arbitration agreement, appointment of arbitrators, and the legality of the award.

Arbitration Agreement and Appointment of Arbitrators:
The petitioner, a former clerk of the 6th Respondent, applied for membership in the Bombay Stock Exchange with the 6th Respondent's support. Disputes arose, leading to arbitration under the Exchange's Rules. The initial arbitrator, Mr. G.V. Desai, resigned and was replaced by Mr. Ashok Khandwalla. Subsequently, the 5th Respondent was appointed as an arbitrator. The petitioner challenged these appointments, claiming the arbitration agreement was not valid. However, a consent order and minutes showed the parties had appointed arbitrators and agreed to arbitration under the Exchange's Rules.

Time-Barred Claims and Arbitration Proceedings:
The petitioner argued that the claims and arbitration proceedings were time-barred, citing Bye-laws 254 and 261, which set time limits for making awards. Additionally, the petitioner contended that the Arbitration Act's provisions on limitation applied to the proceedings. However, the Court found that the governing body could extend the time for making the award, and section 37 did not apply to arbitration under the Exchange's Rules.

Applicability of Rules, Bye-laws, and Regulations:
The petitioner disputed the applicability of the Exchange's Rules, Bye-laws, and Regulations to the arbitration due to the absence of contract notes between the parties. However, Bye-laws 226(a) and 226(c) stipulated that all contracts made by a member with a non-member on the Exchange were subject to the Rules, Bye-laws, and Regulations, regardless of the presence of contract notes. These provisions confirmed that such contracts and dealings fell under the governance of the Exchange's Rules.

In conclusion, the Court dismissed the petition, upholding the validity of the arbitration agreement, the appointments of arbitrators, and the applicability of the Exchange's Rules, Bye-laws, and Regulations to the dispute.