IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Arb. Case No. 18 of 2008 Date of decision 7.4.2011 Kundan Rice Mills ……petitioner Vs. National Commodities Derivative Exchange Ltd. ……respondent CORAM: - HON’BLE MR. JUSTICE HEMANT GUPTA Present: - Mr. John Kumar, Advocate for the petitioner. Mr. Adarsh B. Dial, Sr. Advocate with Ms. Ananya Datta Majumdar, Advocate and Mr. Aditya Sanghi, Advocate for respondent. Hemant Gupta, J Present is the petition for appointment of an Arbitration under Section 11 of the Arbitration and Conciliation Act, 1996 (for short the ‘Act’). Petitioner claims to be a member of the respondent-National Commodity & Derivatives Exchange Limited (for short the ‘NCDEX’) an online multi commodity exchange promoted by a consortium of ICICI Bank Limited and others. Learned counsel for the petitioner has relied upon the following Arbitration Clause for referring the dispute to an Arbitrator: - Disputes between the members of the Exchange inter-se and between members and constituents, arising out of or pertaining to trades done on INCDEX shall be settled through arbitration. The arbitration proceedings and appointment of arbitrators shall be as governed by the Bye- laws and Regulations of the Exchange. Arb Case No. 18 of 2008 It is the case of the petitioner that in the first week of April, 2007, the petitioner imported 111 M.T. of Polyvinyl Chloride (for short the ‘PVC’), SG-V Grade from China and sold the said PVC to NCDEX @ 46.50P. per kg. This was forward sale from the date of contract as on 18.5.2007 with physical delivery to the warehouse as per the rules and regulations of NCDEX. But the warehouse namely Total Logistic India Pvt Limited informed petitioner that it is not authorized to take delivery. The dispute is in respect of the storage of the said PVC was sought to be resolved by way of an Arbitrator in terms of the above said Agreement. Earlier, the petitioner filed a petition under Section 9 of the Act before the learned Additional District Judge, Panipat. The said application was withdrawn with liberty to avail the remedy to file the present petition i.e. for appointment of an Arbitrator. In reply filed on behalf of the respondent, it is pleaded that the dispute raised by the petitioner is a dispute between the member and respondent-exchange and that there is no provision in the regulations or the Bye-Laws of the exchange which provide arbitration of such disputes. It is pleaded that in case of disputes between a member of the Exchange and the Exchange, the Civil Courts have jurisdiction. It is also averred that respondent is an association under Section 6 of the Forward Contracts (Regulation) Act, 1952 and is regulated by the Forward Markets Commission (for short the ‘FMC’) constituted under the said Act. All members of the respondent are bound and governed by the provisions of the said Act; the rules and regulations framed there under with the approval of the Central Government and the FMC. It is pointed out that in terms of the Bye-Law 6.1 of and regulation 21.3, the jurisdiction is that of Civil Court at Mumbai. It is thus pleaded that neither the dispute between the member and the exchange is referable to an Arbitrator and that this Court does not have the territorial jurisdiction to entertain the present petition. 2 Arb Case No. 18 of 2008 After hearing learned counsel for the parties, I am of the opinion that in terms of the Bye-Laws and the Regulations of NCDEX, the reference to which is made in the Arbitration Clause referred to by the petitioner; the jurisdiction is restricted to that of Mumbai Courts. The respondent carries on online transaction, therefore, in terms of Section 13 of the Information Technology Act 2000, an electronic record is deemed to be despatched at the place where the originator has his place of business, and is deemed to be received at the place where the addressee has his place of business. The principal place of business of the originator or the addressee is the place of business. Thus the contract is fictionally executed at Mumbai and thus the jurisdiction has been restricted to that of the Civil Court at Mumbai. In view of the said fact, I am of the opinion that this Court does not have the territorial jurisdiction to entertain the dispute sought to be raised by the petitioner. Dismissed. [HEMANT GUPTA] JUDGE 7.4.2011 preeti 3