Summary
A client challenged an NSE arbitral award in Delhi despite an exclusive Mumbai jurisdiction agreement. The Supreme Court held that Delhi was only a convenient hearing venue and Mumbai courts alone had jurisdiction. It also clarified the summary procedure for Section 34 challenges, ordinarily confined to the arbitral record, and reversed the High Court’s remand for a full evidentiary inquiry.
Issues
- Whether conducting arbitration sittings in Delhi displaced exclusive Mumbai jurisdiction under the agreement and NSE bye-laws.
- What proof and evidentiary procedure were ordinarily required in a Section 34 application.
Provisions considered
- Section 34(2)(a), (5) and (6), Arbitration and Conciliation Act, 1996The then-applicable requirement to furnish proof was construed consistently with summary, expeditious adjudication: ordinarily the arbitral record sufficed, with relevant additional matters addressed by affidavits and cross-examination only if absolutely necessary. (¶¶ 8, 12, 14, 20, 21, 22)
Held
- The agreement read with the NSE bye-laws conferred exclusive jurisdiction on Mumbai courts. The Delhi sittings were at a convenient venue designated by the Exchange and did not confer jurisdiction on Delhi courts to entertain the Section 34 application. (¶¶ 3, 4, 5, 9, 10)
- Section 34 proceedings are summary and do not require framing issues as in a suit. Ordinarily no material beyond the arbitral record is needed; relevant matters outside that record may be presented through affidavits from both parties. Cross-examination is permissible only where absolutely necessary. (¶¶ 14, 22)
- The contrary Punjab and Haryana High Court procedure in Punjab State Industrial Development Corporation v Sunil K. Kansal was overruled. Fiza Developers was to be read in light of Sections 34(5) and (6), retaining its conclusion that issues need not be framed. (¶¶ 15, 20, 21, 22)
Result
Appeal allowed; the Delhi High Court’s remand order was set aside and the Additional District Judge’s rejection of the Delhi Section 34 application for want of jurisdiction reinstated. No costs.