Exchange bye-laws governed securities arbitration, extending time, permitting arbitrator substitution, and sustaining arbitrability without contract notes.

Arbitration under Bombay Stock Exchange bye-laws was treated as continuing within the exchange framework despite the expiry of the original award period, because the bye-laws allowed extension of time by the governing body or President and section 37 of the Arbitration Act, 1940 did not apply. The consent order did not displace the exchange regime, and substitution of a resigned arbitrator was valid under that framework. Deemed contract and arbitration provisions in bye-law 226 applied to securities dealings even without contract notes and despite the petitioner's non-member status during the relevant period, so the disputes remained arbitrable.

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Issues: (i) whether the arbitration proceedings under the Bombay Stock Exchange bye-laws were barred by limitation or by expiry of the time for making the award, (ii) whether the arbitration remained governed by the Bombay Stock Exchange rules and bye-laws despite the consent order under the Arbitration Act, and (iii) whether, in the absence of contract notes and despite the petitioner not being a member during the relevant period, the disputes could still be referred to arbitration under the exchange bye-laws.

Issue (i): whether the arbitration proceedings under the Bombay Stock Exchange bye-laws were barred by limitation or by expiry of the time for making the award.

Analysis: The bye-laws expressly allowed the governing body or the President to extend the time for making the award, even after the original period had expired. The Court held that, in such a statutory arbitration framework, there was no substance in the contention that the proceedings or the adjudication had become time-barred. The Court also held that section 37 of the Arbitration Act, 1940 did not apply to arbitration under the Bombay Stock Exchange rules and bye-laws.

Conclusion: The plea of limitation and expiry of time failed and was decided against the petitioner.

Issue (ii): whether the arbitration remained governed by the Bombay Stock Exchange rules and bye-laws despite the consent order under the Arbitration Act.

Analysis: The consent minutes showed that the parties submitted their disputes to arbitration in accordance with the Bombay Stock Exchange rules, bye-laws and regulations. The Court held that the arbitration was therefore one under the exchange framework, and that the governing body or President could appoint another arbitrator when one arbitrator resigned. The Court treated the earlier binding decision on the statutory character of the exchange arbitration as covering the point raised.

Conclusion: The arbitration continued to be governed by the Bombay Stock Exchange rules and bye-laws, and the replacement of the resigned arbitrator was valid.

Issue (iii): whether, in the absence of contract notes and despite the petitioner not being a member during the relevant period, the disputes could still be referred to arbitration under the exchange bye-laws.

Analysis: Bye-law 226(a) deemed contracts by a member with a non-member for securities dealings to be subject to the exchange rules, bye-laws, regulations and usage. Bye-law 226(c) further deemed claims, disputes and differences arising out of such dealings to be subject to arbitration under the exchange bye-laws. On that basis, the absence of contract notes did not defeat the applicability of the arbitration clause embedded in the exchange regime.

Conclusion: The disputes were arbitrable under the Bombay Stock Exchange bye-laws notwithstanding the absence of contract notes and the petitioner's status during the relevant period.

Final Conclusion: The challenge to the continuation and validity of the exchange arbitration was rejected, and the petition was dismissed.

Ratio Decidendi: Where exchange bye-laws deem securities dealings to be subject to arbitration and authorise extension of time and substitution of arbitrators, the arbitration continues validly under the exchange framework and is not defeated by the absence of contract notes or by the lapse of the original award period.

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