TMI Blog2002 (6) TMI 560X X X X Extracts X X X X X X X X Extracts X X X X ..... er agreement was executed between the parties. Admittedly, none of these two agreements has been executed between the parties. There is no dispute on behalf of the respondent that the statement of claim is not made on the basis of the aforesaid two agreements. However, according to learned counsel for the petitioner, the subject matter of the dispute was not capable of arbitration since the claim was made by the respondent in respect of transactions for which even contract notes were not executed. According to learned counsel for the petitioner, even if such contract notes were executed in respect of the transactions, the arbitrator never got jurisdiction. In order to appreciate the contention of learned counsel for the petitioner, it is necessary to set out the provisions pertaining to the issue of a contract. Regulation 3.5 of the regulations framed by the National Stock Exchange reads as follows : "3.5 Contract note : 3.5.1 Every trading member shall issue a contract note to his constituents for trades executed in such format as specified in annexure 2 with all relevant details as required therein to be filled in, and issued in such manner and within such time as prescri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l analysis in exhibits Nos. 4 and 5. (2)The petitioner has accepted some transactions for a scrip while not accepting the other transaction executed at the same time i.e. trade log or valan Nos. 1 and 2. (3)The petitioner accepts certain trades executed from the same order number and does not accept other trades from the same order number as can be seen from the trade log valan Nos. 1 and 2. (4)On the same day, the petitioner accepted certain transactions and denied certain others. Having regard to the above, the learned arbitrator has eventually found that the petitioner has accepted certain subsequent contracts and bills and, however, declined to accept earlier contracts and bills. The aforesaid findings of the learned arbitrator are challenged by learned counsel for the petitioner on the ground that it is based on improper appreciation of evidence and on the ground that the arbitrator has failed to take into account certain evidence such as books of account, trade logs, etc. which were produced by the petitioner. It is not possible to accept this contention on behalf of the petitioner since what the petitioner really invited this court to do is to embark upon apprais ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a; ( b )in international commercial arbitration, ( iii ) failing any designation of the law under clause ( a ) by the parties, the arbitral Tribunal shall apply the rules of law it considers to be appropriate given all the circumstances surrounding the dispute." It is difficult to appreciate how section 28(1) is violated when a certain piece of evidence is not adverted to or ignored by the arbitrator. Mr. Kamdar relied on an unreported judgment of this court in Arbitration Petition No. 374 of 1999 ( S.N. Agarwal HUF v. Rajkumar Keshardev decided on September 11, 2001), where this court took the view that by relying on one entry in the documents and ignoring other documents, the award was made by non-application of mind and, therefore, such a finding is no finding in the eye of law and, therefore, such an award is in violation of section 34 of the Act. As far as this court is concerned, I am of the view that the contention on behalf of the petitioner must be rejected in view of the Division Bench judgment of this court in Vijaya Bank v. Maker Development Services [2001] 3 Bom. C.R. 652, wherein a Division Bench of this court observed that the jurisdiction of this c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in writing ; ( k ) the regulation of the entering into, making, performance, recession and termination of contracts, including contracts between members or between a member and his constituent or between a member and a person who is not a member, and the consequences of default or insolvency on the part of a seller or buyer or intermediary, the consequences of a breach or omission by a seller or buyer, and the responsibility of members who are not parties to such contract; . ( n ) the method and procedure for the settlement of claims or disputes, including settlement by arbitration;" The National Stock Exchange of India has in addition to the regulations framed bye-laws. Bye-law No. 1 of Chapter X reads as follows : "All contracts subject to bye-laws, rules and regulations, (1) All contracts relating to dealings permitted on the exchange made by a trading member shall in all cases be deemed made subject to the bye-laws, rules and regulations of the exchange. This shall be a part of the terms and conditions of all such contracts and shall be subject to the exercise by the relevant authority of the powers with respect thereto vested in it by the bye-laws, rules and regu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the writing is not signed by both the parties. The legislative competence to enact a provision prescribing a specific mode of execution of contract is not questioned. Thus, on a harmonius construction of the provisions of the Arbitration Act and the regulations framed under the Securities Contracts (Regulation) Act, 1956, both enacted by Parliament, I am of the view that contract note executed in accordance with regulation No. 3.5 signed only by the registered broker and containing a stipulation that the contract would be subject to rules, bye-laws and regulations, which in turn provide for arbitration can constitute a valid arbitration agreement even though it is signed by the trader member. Mr. Kamdar, however, referred to the SEBI (Stock Brokers) and Sub-brokers) Regulations, 1992, which prescribe certain "Precautions to be exercised by the member-brokers". One of the mandatory precautions is as follows : "( viii ) Member-brokers should insist on clients to return the duplicate copy of contract notes duly signed by them in token of their having received the contract notes." It is clear from the introductory para. containing the aforesaid guidelines that it is meant for p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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