Arbitration rights of a defaulting trading member survive for pre-default disputes under NSE bye-laws.

A trading member of the NSE declared a defaulter is not, on the stated bye-laws, deprived of the contractual right to invoke arbitration for disputes arising before default. Rule 33 governs lapsing and forfeiture of membership rights, but it does not expressly extinguish the arbitration agreement or transfer that right to the Defaulters' Committee. Chapter XI creates a separate arbitration regime, and Bye-law 1C preserves pre-default disputes. The Defaulters' Committee has limited powers and no express authority to substitute the defaulter or itself refer such disputes to arbitration. The challenge to maintainability therefore fails.

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Issues: Whether a trading member of the National Stock Exchange, after being declared a defaulter, could still initiate arbitration proceedings in respect of pre-default transactions.

Analysis: Rule 33 of the NSE Rules deals with the lapsing and forfeiture of membership rights, but it does not expressly provide that the contractual right to invoke arbitration against a constituent is extinguished or transferred to the Defaulters' Committee. Chapter XI of the Bye-laws creates a separate arbitration regime, and Bye-law 1C specifically preserves disputes arising from transactions entered into before default, expulsion, or surrender of membership. The trading member remains a party to the arbitration agreement under the Bye-laws and Section 2(h) of the Arbitration and Conciliation Act, 1996. The Defaulters' Committee has limited powers under Bye-law 11 and is separately empowered under Bye-law 28 to initiate court proceedings, but there is no provision authorising it to substitute the defaulter in arbitration or to refer such disputes itself. The principle of expressio unius est exclusio alterius supports the exclusion of powers not expressly conferred.

Conclusion: A defaulter trading member is not barred from initiating arbitration for pre-default disputes, and the challenge to the maintainability of the reference fails.

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