2006 (11) TMI 332 - HC - Companies Law

Issues Involved:
1. Alleged collusion and bias of the arbitrator.
2. Denial of opportunity due to refusal to change the venue.
3. Arbitrator's application of mind.
4. Validity of arbitration agreement and jurisdiction.
5. Limitation period for filing the arbitration claim.

Issue-wise Detailed Analysis:

1. Alleged Collusion and Bias of the Arbitrator:
The petitioner contended that the first respondent allowed an office bearer of the third respondent to act as an arbitrator, implying collusion to pass an adverse award. However, the court found no merit in this argument. The arbitrator was appointed in accordance with the contract and bye-laws of the third respondent, and he was not an officer of the third respondent but an independent arbitrator. The court upheld the arbitrator's independence and dismissed the claim of bias.

2. Denial of Opportunity Due to Refusal to Change the Venue:
The petitioner argued that the refusal to change the arbitration venue from Mumbai to Chennai denied him the opportunity to present his defense effectively. The court observed that the petitioner had agreed to the contract stipulating that arbitration would be governed by the by-laws of the third respondent, which included the venue clause. Therefore, the petitioner could not later insist on a different venue. The court found no denial of opportunity as the petitioner had the option to participate but chose not to.

3. Arbitrator's Application of Mind:
The petitioner claimed that the arbitrator did not apply his mind and simply accepted the first respondent's claim. The court reviewed the arbitrator's award and found that the arbitrator had meticulously considered all the facts, documents, and submissions. The arbitrator had framed specific issues and provided detailed reasons for his findings, demonstrating a thorough application of mind. The court rejected the petitioner's claim of lack of application of mind.

4. Validity of Arbitration Agreement and Jurisdiction:
The petitioner questioned the arbitrator's jurisdiction, asserting that there was no valid arbitration agreement. The arbitrator examined the contract notes and found that they included a clause for arbitration as per the rules and regulations of the National Stock Exchange of India Ltd. (NSEIL). The court agreed with the arbitrator's finding that an arbitration agreement existed and that the arbitrator had jurisdiction. The court referenced the Bombay High Court's decision in Viraj Holdings v. Motilal Oswal Securities (P.) Ltd., which supported the validity of arbitration agreements in contract notes.

5. Limitation Period for Filing the Arbitration Claim:
The petitioner argued that the arbitration claim was barred by limitation. The arbitrator considered the relevant dates and concluded that the claim was filed within the 90-day limitation period. The court reviewed the arbitrator's reasoning and found it to be sound. The court noted that the first respondent's notice dated 8-11-1996 and subsequent actions were within the limitation period, thus rejecting the petitioner's claim of time-barred arbitration.

Conclusion:
The court dismissed the petitioner's claims on all grounds, affirming the arbitrator's award. The court found that the arbitrator had acted independently, applied his mind, and adhered to the contractual and legal framework. The petitioner's failure to participate in the arbitration proceedings and subsequent attempt to challenge the award was not substantiated. The original petition was dismissed with no costs.

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