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2015 (3) TMI 112 - HC - Indian LawsArbitration & Conciliation Act, 1996 - Suspension of membership - Held that:- The suggestion that the arbitration clauses ceases to operate altogether the moment a member is suspended is unsustainable. It would defeat the rights of the suspended or expelled member's constituent's/client's right to have the disputes between them referred to and decided by arbitration. The right of the non-member (i.e. the suspended member's client) cannot be defeated for the default or wrong doing of the suspended or expelled member. The consequences of accepting Mr.Dwarkadas' submission would be to prevent the non-member such as the suspended member's client being denied the right of having the disputes between himself and the suspended or expelled member referred to and decided by arbitration for no fault of his and indeed only on account of the fault of such member. This would, in many cases, put a premium on the default of the suspended member. In our view, therefore, the disputes and differences can be referred to and decided by arbitration as provided in the rules, bye-laws and the regulations of the exchange even where a member has been suspended or expelled or where the persons membership has been terminated. The provisions in the rules, bye-laws and regulations of the BSE relating to arbitration remain unaffected upon a member being suspended or expelled or his membership being terminated. We are however, unable to agree that mere refusal to permit the appellant to cross examine the respondent would not be a ground for setting aside the award. Nor does it establish that there has been a breach of the rules of natural justice. The respondent was not bound to examine himself. The appellant was not entitled as a matter of right to cross examine him. It was always open for the appellant to contend that his evidence, if any, on affidavit ought not to be taken into consideration or that an adverse inference ought to be drawn on account of respondent not having examined himself or made himself available for cross examination. In these circumstances, the appeal is allowed. The impugned order and judgment is set aside. The Award is set aside. It is however declared and clarified that the arbitration agreement remains unaffected even assuming that the respondents membership was suspended or cancelled and even if the respondent was expelled by the BSE. - Appeal allowed and award is set aside.
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