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TMI Blog2015 (4) TMI 62X X X X Extracts X X X X X X X X Extracts X X X X ..... ng settlement by arbitration. Under S.9(2)(n) the National Stock Exchange has framed Bye-Laws which have been approved by SEBI. Section 9(4) provides that the Bye-Laws made under Section 9 shall be subject to conditions with regard to previous publication, and the same shall be published in the Gazette of India, and also in the Official Gazette of the State in which the principal office of the recognized Stock Exchange is situated, and shall have effect as from the date of publication in the Gazette of India. - arbitration under the National Stock Exchange Bye-Laws are Statutory Arbitrations would be covered under Section 2(4) of the Arbitration and Conciliation Act, 1996. In the written statement filed a specific prayer has not been made to refer the parties to arbitration, but we have highlighted hereinabove that in the written statement filed a preliminary objection has been taken that the suit is barred in view of the arbitration agreement. The written statement filed is with strings attached by challenging the maintainability of the suit in view of the arbitration clause and therefore in such circumstance the said objection taken by Edelweiss contained in the written statem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fee filed the summons could not be issued. On filing of process fee fresh summons returnable for February 24, 2012 were issued. Before the date fixed a written statement was filed which was signed and verified on December 15, 2011. 3. In the written statement filed apart from refuting the pleadings and affirming that all transactions were carried out under the instructions of Sharad P. Jagtiani it was pleaded in the third preliminary objection as under:- That this Hon'ble Court lacks the necessary jurisdiction to entertain and decide the present Suit in view of Clause 13 of Part A of the Agreements dated 23.05.2008 entered into between the parties, wherein the parties have agreed to refer any claims/disputes arisen between the parties to be resolved by the mode of Arbitration, as per the Rules, Regulations and bye-laws envisaged by the respective stock exchange. The contents of Clause 13 are reproduced herein for the ready reference of this Hon'ble Court. '.......... 13 The Client and the Stock Broker agree to refer any claims and/or disputes to arbitration as per the Rules, Bye-laws and Regulations of the Exchange and Circulars issued there under as may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xisted an arbitration clause in the contract between the parties and that the subject matter of the suit i.e. the action brought was the subject of the arbitration agreement. To which response of Edelweiss, Sharad P. Jagtiani responded by taking a stand that in the written statement filed, except for drawing the attention of the Court to the existence of an arbitration agreement between the parties no prayer was made that the parties should be referred to arbitration and while so responding Sharad P. Jagtiani made it clear that said plea was in the alternative to his main argument of an application being required to be filed under Section 8 of the Arbitration and Conciliation Act, 1996. 8. The view taken by the learned Single Judge is that the requirement of law i.e. Section 8 of the Arbitration and Conciliation Act, 1996 is for a party relying upon an arbitration agreement to apply to the Court praying that parties be referred to arbitration not later than when submitting the first statement on the substance of the dispute. The learned Single Judge has held that the first statement on the substance of the dispute by the defendant could be the written statement. 9. Section 9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e provisions of the Arbitration and Conciliation Act, 1996 to the extent not provided for in the Bye-Laws and Regulations. 13. Section 8 of the Arbitration and Conciliation Act, 1996 reads as under:- 8. Power to refer parties to arbitration where there is an arbitration agreement - (1) A judicial authority before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party so applies not later than when submitting his first statement on the substance of the dispute, refer the parties to arbitration. (2) The application referred to in sub-section (1) shall not be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof. (3) Notwithstanding that an application has been made under sub-section (1) and that the issue is pending before the judicial authority, an arbitration may be commenced or continued and an arbitral award made. 14. We simply need to highlight the phrase 'not later than when submitting his first statement on the substance of the dispute' in sub-Section (1) of Section 8. The requirement is to bring to the notice of the Court at a point not later th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed for referring the matter to arbitration at the time of entering into the contract itself. 19. Before dismissing the appeal we would be failing not to note a preliminary objection filed by the respondent to the very maintainability of the appeal. With reference to Section 37 of the Arbitration and Conciliation Act, 1996 wherein such orders as are appealable are listed, it was urged that an order under Section 8 of the Arbitration and Conciliation Act, 1996 was not made appealable. We have chosen to decide on merits to interpret the law correctly for the reason we find that a few learned Single Judges of this Court have taken a view that unless an application is filed under Section 8 of the Arbitration and Conciliation Act, 1996, mere raising a plea in the written statement that there exists an arbitration agreement between the parties which embraces the subject matter of the dispute raised in the suit, would be useless. One objection raised by Sharad P. Jagtiani is that judicial discipline demanded the learned Single Judge to follow the view taken by learned Single Judges and if he did not agree the matter ought to have been referred to a larger Bench. We thought it advisable ..... X X X X Extracts X X X X X X X X Extracts X X X X
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