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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 ..... es of Edelweiss met him with a request to open a brokerage account with the firm and to trade in the financial market through Edelweiss. He was assured 40% profit on trading. He opened a trading account and transferred Rs. 48,00,000/- (Rupees Forty Eight Lacs only) in the account. He pleaded that he did not invest the money under any portfolio management scheme. Account No.NDS00S078 was opened in his name. He signed certain blank forms on the assurance that once filled up copies thereof would be sent to him. He pleaded that Edelweiss was bound by the rules of the National Stock Exchange requiring trading members to ensure that confirmed order instructions were obtained from the members. That he placed 121 trading orders with Edelweiss. Sudd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 be in force from time to time....'" 4. In response to the averments made in para 20 of the plaint wherein Sharad P. Jagtiani had pleaded that the Delhi High Court had jurisdiction to entertain the suit, it was pleaded in the written statement as under:- "20. That the contents of the para No.20 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e parties. 7. What was argued before the learned Single Judge was the effect of an application not being filed under Section 8 of the Arbitration and Conciliation Act, 1996 by Edelweiss. Whereas Sharad P. Jagtiani pleaded that filing of an application under Section 8 of the Arbitration and Conciliation Act, 1996 was the condition for the parties to be referred to arbitration, Edelweiss took the stand that the requirement of the law was to bring it to the notice of the judicial authority in the first statement on the substance of the disputes filed by the defendant that there existed 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 ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... BI. 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. 10. Chapter XI of the Bye-Laws of the National Stock Exchange of India Limited specifically provides for reference to Arbitration. Sub-Section 4 of Section 2 of the Arbitration and Conciliation Act, 1996 reads as under:- "This Part except sub-Section (1) of Section 40, Sections 41 and 43 shall apply to every arbitration under any other enactment for the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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' i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch circumstance the said objection taken by Edelweiss contained in the written statement could be treated as an application under Section 8 of the Arbitration and Conciliation Act, 1996. 17. It is trite that it is the substance of a matter contained in a document which matters and not the form thereof. 18. For three reasons, the appeal has to be dismissed. Firstly the arbitration agreement in the instant case being the result of a statute, there being no estoppel against the statute, required by law to be held; secondly the view taken by us hereinabove relating to the interpretation of Section 8 of the Arbitration and Conciliation Act, 1996; and thirdly Section 89 of the Code of Civil Procedure, 1908 which empowers a Court to refer the p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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