The question as to whether an arbitral award passed by the Arbitral Tribunal is set aside bydivision bench of Bombay high court can be challenged by the appellant, was examined by THE HIGH COURT OF BOMBAY, consisting of Justice J.P Devadhar in the matter of Mr. Harinarayan G. Bajaj v. The Bombay Stock Exchange Limited [Appeal No. 182 /2015] on 28.10.15.
Facts of the case were that respondent no. 2, a member of BSE initiated Arbitration Proceedings against the appellant claiming an amount of ` 1,58,39,459.57. In the said Arbitration Proceedings the appellant filed a counter claim amounting to ` 27,62,427.27. The Arbitral Tribunal of the BSE allowed the claim of the respondent no. 2 and rejected counter claim of the appellant on the ground that the said amount of ` 27,62,427.27 was adjusted against the purchase transactions of the appellant with the respondent no. 2’s broking entity, which transactions were found to be valid and subsisting by the Arbitral Tribunal. Challenging the aforesaid Award, appellant filed Arbitration Petition under Section 34 of the Arbitration and Conciliation Act, 1996 before the Bombay High Court. Bombay High Court dismissed the Arbitration Petition filed by the appellant under Section 34 of the 1996 Act. Challenging the aforesaid order, appellant filed an appeal in the Bombay High Court.
The learned Counsel of the the appellant Mr. Sailesh Bajaj submitted that under Bye Law 260(2) of the Bye Laws framed by BSE it was obligatory on part of the Stock Exchange to entertain the application filed by the appellant especially when the Award made by the Arbitral Tribunal is set aside by the Bombay High Court. Since the Apex Court has not stayed operation of the Division Bench decision of the Bombay High Court, it is submitted on behalf of the appellant that the Arbitration Application ought to have been accepted subject to decision of the Apex Court in the SLP Filed by the respondent no.
The learned counsel of the respondents contended that BSE is seeking re-adjudication of the same arbitration reference which was subject matter of earlier arbitration reference. However, since the Bombay High Court while setting aside the Award passed by the Arbitral Tribunal has held that the dispute could be referred back to arbitration only if the respondent no. 2 agrees to such reference and since respondent no. 2 has not accepted arbitration and filed SLP, BSE has deemed it fit to reject the application. The counsel also submitted that in the memorandum of appeal, appellant had not taken a ground that the counter claim has been 6 wrongly rejected. Moreover, Division Bench decision of the Bombay High Court reveals that no argument was advanced relating to the rejection of the counter claim by the Arbitral Tribunal as well as the Learned Single Judge of the Bombay High Court.
The High Court Of Bombay set the order aside and contended that once the Division Bench of the Bombay High Court has set aside the Award passed by the Arbitral Tribunal, in its entirety it is not open to the respondent no. 2 to contend that the Award is partially set aside and that the Award stands confirmed to the extent it rejects the counter claim of the appellant. In other words, when a Division Bench of the Bombay High Court allows the appeal filed by the appellant and sets aside the Award passed by the Arbitral Tribunal completely, respondent no. 2 is not justified in contending that the Award to the extent it rejects the counter claim stands confirmed even after the Division Bench of the Bombay High Court has set aside the Award. Once the Division Bench of the Bombay High Court has set aside the Award and allowed the appeal filed by the appellant, there is no reason as to why the Division Bench of the Bombay High Court would allow only the respondent no. 2 to reagitate his claim and disallow the appellant to reagitate his counter claim.
By Reetasa Samal