2003 (1) TMI 551 - HC - Companies Law

Summary

Issues Involved:
1. Existence of an arbitration agreement.
2. Limitation period for filing the claim.
3. Specification of the claim amount in the statement of case.
4. Non-joinder of a necessary party.
5. Consideration of the Petitioner's defense.

Detailed Analysis:

1. Existence of an Arbitration Agreement:
The Petitioner challenged the existence of an arbitration agreement between the parties. The Arbitral Tribunal found that the Ledger Account and the Minutes of Meeting, both signed by the Petitioner, indicated that a contract existed between the parties. Furthermore, each contract note issued contained an arbitration agreement and a provision for reference to arbitration. The Tribunal also noted that the Petitioner's signature on the Ledger Account and the Minutes of Meeting showed acknowledgment of the dealings and transactions. The Court upheld this finding, referencing Bye-law 1 of Chapter X of the National Stock Exchange (NSE) which deems all contracts made by a trading member to be subject to the Bye-laws, Rules, and Regulations of the Exchange. The Court also cited previous judgments affirming that contract notes executed in accordance with NSE regulations constitute a valid arbitration agreement.

2. Limitation Period for Filing the Claim:
The Petitioner argued that the claim was barred by limitation as it was not preferred within the six-month period prescribed by Bye-law 3. The Arbitral Tribunal noted that there was a running account between the parties from December 1999 to August 2000, and a demand notice was sent in March 2001. The reference to arbitration was made on 31st March 2001. The Court referenced a judgment which held that the cause of action for referring a matter to arbitration arises when a demand is made and not paid. Given that the demand was made in March 2001 and the reference to arbitration followed shortly after, the Court found no error in the Tribunal's view that the claim was within the limitation period.

3. Specification of the Claim Amount in the Statement of Case:
The Petitioner contended that the statement of case did not specify the claim amount in arbitration. The Court dismissed this argument, noting that the claim had been quantified in Form 1 appended to the statement of case.

4. Non-joinder of a Necessary Party:
The Petitioner argued that J.P. Goenka, who had signed some of the contract notes/bills, was a necessary party to the proceedings. The Arbitral Tribunal found that J.P. Goenka was authorized by the Petitioner to accept documents on his behalf, and thus there was no need to implead him as a party to the reference. The Court upheld this finding, stating that parties to the arbitration could only be those who were parties to the arbitration agreement.

5. Consideration of the Petitioner's Defense:
The Petitioner claimed that his defense was not duly considered. The Arbitral Tribunal had rejected the Petitioner's defense, which included the argument that the transactions were a "purely and a transitory parking arrangement" and that there was no dealing between the parties. The Tribunal found that the Petitioner's signature on the Ledger Account and the Minutes of Meeting indicated acknowledgment of the transactions. The Court found that the Arbitral Award had duly considered the Petitioner's defense before accepting the Respondent's claim.

Conclusion:
The Court emphasized the limited scope of judicial review under the Arbitration and Conciliation Act, 1996, and found no grounds for interference with the arbitral award. The Arbitration Petition was accordingly rejected.