Arbitration Case No. 136 of 2008 [1] IN THE HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH Arbitration Case No. 136 of 2008 Date of Decision: 11.09.2009 Gautam Jindal ..Petitioner Versus Ludhiana Stock Exchange (LSE) Ltd. Ludhiana ..Respondent CORAM: HON'BLE MR. JUSTICE T.S.THAKUR,CHIEF JUSTICE 1.Whether Reporters of local papers may be allowed to see the judgment ? 2. Whether to be referred to the Reporters or not ? 3. Whether the judgment should be reported in the Digest? Present : Mr. Gourave Bhayyia, Advocate, for the petitioner. Mr. O.P.Goyal, Sr. Advocate with Mr. Varun Sharma, Advocate for the respondent. ***** T.S.Thakur, C.J. (Oral) The petitioner was at the relevant point of time a member of Ludhiana Stock Exchange Limited. Aggrieved by an order passed by the said Exchange forbidding his entry into the Exchange for conduct of his business, the petitioner filed Civil Writ Petition No. 6919 of 2008 which was disposed of by a Division Bench of this Court on 12.05.2008 holding that the petitioner could take resort to arbitration for Arbitration Case No. 136 of 2008 [2] adjudication of the disputes raised by him in accordance with the provisions of Chapter XVII of the Bye-laws and Regulations of the Ludhiana Stock Exchange Securities Limited. Chapter XVII of the said Bye-laws & Regulations provides for adjudication of all the disputes by way of arbitration. Bye-Law 270 of the said Bye-Laws reads as under:- “ 270(a) All disputes shall be referred to and decided by arbitration in accordance with the provisions of this Chapter. No member or party to Dispute shall initiate judicial proceedings in relation to a Dispute without proceeding for arbitration under the terms of these bye laws.” The term “ Dispute” referred to in Bye-law 270 has also been defined in Bye-Law 271 as under:- “In this Chapter the term “ Dispute” shall include all claims, complaints, differences and disputes between members or between members and non-members (the term “ non-member” shall include a client of the member, an underwriter and any person with whom the member shares brokerage including, but not limited to, a remisier, authorised clerk, sub-broker or employee) arising out of or in relation to any bargains, dealings, transactions or contracts made subject to the Rules, Bye-Laws, Circulars, Orders and Regulations of the Exchange as well as instructions/guidelines/directions/rules/regulations issued by Securities & Exchange Board of India/Central Government from time to time or with reference to anything incidental thereto.” Arbitration Case No. 136 of 2008 [3] Bye Laws 272 to 288 of the Regulations deal with different aspects of arbitration such as constitution of the Arbitration Panel; Appointment of Arbitrators; Substitution of Arbitrators; Arbitration Assistants, Commencement of Arbitral proceedings; set off counter claims; Exparte Decisions, award, payment of interest, modification of the Awards; the effect and enforcement of the award, arbitration fee and costs etc. It is not disputed by learned counsel for the respondent- Exchange that Chapter XVII is a complete code for adjudication of any dispute falling within the meaning of the said expression as defined in Bye-law 271 (supra). The only question is whether the Exchange can make an appointment of an Arbitrator for adjudication of the disputes which the petitioner has raised even after the filing of this petition. The petitioner's case in this regard is that consequent upon disposal of his writ petition on 12.05.2008, the petitioner wrote a letter dated 24.5.2008 to the respondent-Exchange asking for arbitration of the disputes between the parties. In response to the said communication, the respondent-Exchange issued him a letter dated 27.11.2008 Annexure R-4 asking the petitioner to appear in person before the Arbitration Committee of the Exchange on 6.12.2008 at 12.30 P.M. The petitioner accordingly complied and appeared before the Arbitration Committee of the Exchange on 6.12.2008, when the Committee appears to have gone through the available material and come to a conclusion that no dispute had been articulated by the petitioner for arbitration. The Committee accordingly appears to have asked the petitioner to submit within a week's time his dispute in writing to the Arbitration Arbitration Case No. 136 of 2008 [4] Committee. The petitioner in response sent a communication dated 13.12.2008 in which he indicated that he was aggrieved of the order passed by the Stock Exchange dated 8.11.2007 vide which he was denied access to his own office premises and other restrictions were imposed upon his business activities. This was according to the petitioner a dispute that required to be adjudicated upon by way of arbitration. That the dispute which the petitioner indicated in terms of the above communication was understood by the Committee to be dispute within the meaning of Bye-Law 271 is evident from the averments made by the Exchange in para No.5 of its reply which reads as under:- “That the petitioner submitted his dispute in writing vide letter dated 13.12.2008 and sought the quashment and permanent injunction against the order dated 8.11.2007 passed by the LSE. Copy of the communication/dispute details made by the petitioner dated 13.12.2008 is attached as Annexure R-6. There is no prayer for arbitration of the dispute by the petitioner even by Annexure R-6.” The petitioner's case now is that although a request in terms of the Bye-Laws mentioned earlier was made pursuant to the order passed by this Court seeking arbitration and although petitioner had complied with the requirement stipulated by the Committee and identified the dispute between the parties and although the Ludhiana Stock Exchange and its Arbitration Committee had the opportunity to appoint an Arbitrator for adjudication of the dispute, it had not done so leaving no option for the petitioner except to seek an appointment from Arbitration Case No. 136 of 2008 [5] this Court in the present proceedings. On behalf of the respondent it was on the other hand contended that the present petition had been filed on 15.09.2008 i.e. much before the petitioner appeared before the Arbitration Committee on 6.12.2008 and identified the dispute requiring arbitration on 13.12.2008. It is submitted that since the present petition was filed even before identification of the dispute, the Committee still had the jurisdiction to make a nomination. I have given careful consideration to the submissions made at the bar. It is true that the present petition had been filed on 15.9.2008 and a notice of motion issued for 16.1.2009 but it is equally true that the said notice was served on 28.11.2008. The petitioner had in the meantime been summoned by the Arbitration Committee on 6.12.2008 and asked to identify the dispute which identification/articulation he had done in terms of his letter dated 13.12.2008. This implies that the Arbitration Committee clearly knew as on 13.12.2008 that there was a dispute that called for adjudication by way of arbitration. The pendency of the present petition notwithstanding the Arbitration Committee or the Exchange could have and indeed ought to have appointed an Arbitrator within 30 days from the said communication or within a reasonable period thereof. Nothing of this kind was, however, done by the Arbitration Committee or the Exchange even when the Exchange had appeared in these proceedings on 16.1.2009 and continued to appear thereafter till date. No explanation has been offered much less a cogent one by learned counsel Arbitration Case No. 136 of 2008 [6] for the respondent for the failure of the Arbitration Committee or the Exchange to act upon the request made by the petitioner for appointment of an Arbitrator. The only argument urged is that Ludhiana Stock Exchange Management is not familiar with the legal position as to its obligations. I have no hesitation in repelling that submission. The fact that there is an arbitration clause as also the fact that a demand for arbitration was made on 13.12.2008 i.e. much before the appearance of the respondent-Exchange in this Court, which demand remained pending leading in delay in the start of the proceedings is in my opinion sufficient for me to intervene and appoint an Arbitrator. I accordingly allow this application and refer the dispute between the parties to the sole arbitration of Justice N.C.Jain, former Chief Justice of High Court of Assam at Gauhati. The parties are directed to appear before the Arbitrator for directions on 26.10.2009 at 10.00 A.M.. The Arbitrator shall be entitled to a fee of Rs. 11,000/- per hearing subject to a maximum of Rs. 1,00,000/- (Rs. One lac only) to be paid in the manner and at the intervals to be determined by the Arbitrator. No costs. (T.S.THAKUR) CHIEF JUSTICE 11.09.2009 'ravinder'