2003 (7) TMI 589 - SC - Companies Law

Whether the appellant being a non-member is not required to seek arbitration? - Held that - Appeal dismissed. Since the appellant is neither a remisier or authorised clerk or employee or shares any brokerage with the member, he cannot be covered by the said definition and, therefore, the said rules, definition and bye-laws do not apply to him. In fact, the argument is that the words any other person should take colour from the preceding words, namely, remisier, authorised clerk or employee and since the appellant is not one of those mentioned, he does not fall within the expression any other person .

Summary

Issues:
Interpretation of arbitration clause in relation to non-members' rights and obligations.

Analysis:
The appellant, engaged in share trading, filed a suit against the respondents for recovery. The respondents sought a stay on the proceedings, invoking an arbitration clause under the Indian Arbitration Act, 1940. The High Court granted the stay, which the appellant challenged in a special leave petition before the Supreme Court.

The appellant contended that as a non-member, he was not bound by the arbitration clause mentioned in the bills. The clause covered disputes between members and non-members, including remisiers, authorized clerks, or employees. The appellant argued that since he did not fall under these categories, the arbitration clause did not apply to him. However, the Supreme Court disagreed, noting that the clause was broad enough to encompass various individuals, including those not specifically mentioned. The inclusion of unauthorized clerks and employees expanded the definition of a non-member, indicating a comprehensive scope.

The Court emphasized that the clause's language was wide and inclusive, extending to persons like the appellant. Additionally, another clause in the bill reinforced the requirement for arbitration in Bombay as per the Stock Exchange's rules and regulations. This clause further supported the applicability of the arbitration provision to individuals involved in the transactions, including non-members like the appellant.

Ultimately, the Supreme Court found no merit in the appellant's arguments and dismissed the appeal. The Court upheld the High Court's decision to stay the proceedings, emphasizing the comprehensive nature of the arbitration clause and its applicability to individuals beyond specific categories. The appeal was rejected, with no costs imposed on either party.