M/S EMKAY GLOBAL FINANCIAL SERVICES LTD. versus GIRDHAR SONDHI

Citation: [2018] 10 S.C.R. 937 · Decided: 20-08-2018 · Supreme Court of India · Bench: R.F. NARIMAN · Disposal: Appeal(s) allowed

Cited by 4 judgment(s) · cites 3 · see the full citation network in Lexace

Judgment (excerpt)

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M/S EMKAY GLOBAL FINANCIAL SERVICES LTD.
v.
GIRDHAR SONDHI
(Civil Appeal No. 8367 of 2018)
AUGUST 20, 2018
[R.F. NARIMAN AND INDU MALHOTRA, JJ.]
Arbitration and Conciliation Act, 1996: s.34 – Territorial
jurisdiction – Dispute arose between the registered broker of the
National Stock Exchange (NSE) and its client regarding certain
transactions in securities and shares – Agreement between the
parties contained a jurisdiction clause whereby the parties were to
submit to the exclusive jurisdiction of the courts in Mumbai – Matter
was referred by the NSE to the arbitrator having sittings at Delhi –
Respondent’s claim was rejected by the sole arbitrator – Respondent
then filed s.34 application before Delhi District Court – District
Court dismissed s.34 application referring to the exclusive
jurisdiction clause in the agreement – By impugned order, High
Court remitted the matter to the Delhi District Court to decide the
disputed questions of fact as regards the existence of territorial
jurisdiction of the courts at Delhi after framing issue to that effect
and permitting the parties thereafter to lead evidence on the same –
On appeal, Held: Once courts in Mumbai have exclusive jurisdiction
in terms of agreement read with the NSE bye-laws then it is the
Mumbai courts alone, before which s.34 application was to be filed
– High Court erred in remanding the matter for a full-dressed hearing
on what he referred to as a ‘disputed question of fact’ relating to
jurisdiction – The object of enactment of 1996 Act is speedy
resolution of arbitral disputes – However, if issues are to be framed
and oral evidence taken in a summary proceeding under s.34, this
object will be defeated – An application for setting aside an arbitral
award will not ordinarily require anything beyond the record that
was before the Arbitrator – However, if there are matters not
contained in such record, and are relevant to the determination of
issues arising under s.34(2)(a), they may be brought to the notice
of the Court by way of affidavits filed by both parties – Cross-
examination of persons swearing to the affidavits should not be
937
[2018] 10 S.C.R. 937
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938
SUPREME COURT REPORTS
[2018] 10 S.C.R.
allowed unless absolutely necessary, as the truth will emerge on a
reading of the affidavits filed by both parties – High Court erred in
referring back the parties to the District Court to first frame an
issue and then decide on evidence including the opportunity to cross
examine witnesses who give depositions – Order of High Court is
set aside and that of District Court is restored – Jurisdiction.
Allowing the appeal, the Court
HELD: 1. The Arbitration and Conciliation (Amendment)
Bill of 2018, being Bill No.100 of 2018, contains an amendment
to Section 34(2)(a) of the principal Act, which states that in section
34 of the principal Act, in sub-section (2), in clause (a), for the
words “furnishes proof that”, the words “establishes on the basis
of the record of the arbitral tribunal that” shall be substituted.
The object of enactment of 1996 Act was speedy resolution of
arbitral disputes and it continues to be the reason for adding
amendments to the said Act to strengthen this object. However,
if issues are to be framed and oral evidence taken in a summary
proceeding under Section 34, this object will be defeated. It is
also on the cards that if Bill No.100 of 2018 is passed, then
evidence at the stage of a Section 34 application will be dispensed
with altogether. [Paras 19, 22]  [950-B-C; 951-E-F]
Fiza Developers & Inter-Trade Pvt. Ltd. v. AMCI (India)
Pvt. Ltd. and Anr. (2009) 17 SCC 796 : [2009] 12 SCR
1 – relied on.
M/s Punjab State Industrial Development Corporation
v. Mr. Sunil K. Kansal 2012 SCC OnLine P&H 19641
– overruled.
WEB Techniques and Net Solutions Pvt. Ltd. v. M/s. Gati
Ltd. and Anr. 2012 SCC OnLine Cal 4271 – approved.
Sandeep Kumar v. Dr. Ashok Hans (2004) 3 Arb LR
306; Sial Bioenergie v. SBEC Systems  AIR 2005 Del
95; Cochin Shipyard Ltd. v. Apeejay Shipping Ltd.
(2015) 15 SCC 522 : [2009] 12 SCR 1;  State of Bihar
and Ors. v. Bihar Rajya Bhumi Vikas Bank Samiti 2018
(9) SCALE 291 – referred to.
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2. An application for setting aside an arbitral award will not
ordinarily require anything beyond the record that was before
the Arbitrator. However, if there are matters not contained in
such record, and are relevant to the determination of issues
arising under Section 34(2)(a), they may be broug

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