Arbitration interim protection and special-court exclusivity barred jurisdiction against a notified person in a securities dispute.

Interim protection may be granted in aid of arbitration where a prima facie case shows possible non-delivery of shares and the claimant needs preservation of its position pending invocation of arbitral proceedings. The Court also held that, for disputes involving a notified person under the Special Courts Act, the special statutory scheme prevails over the general jurisdiction under the Arbitration and Conciliation Act, 1996. Section 9B of the Special Courts Act was treated as conferring exclusive special-court powers, and the general arbitration jurisdiction clause did not displace that exclusivity. Relief was therefore confined to the first respondent, and the petition against the notified respondent was not maintainable.

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Issues: (i) Whether, on the facts, interim protection should be granted against the first respondent for securing the petitioner's claim arising from the alleged non-delivery of shares; (ii) Whether the Court had jurisdiction under the Arbitration and Conciliation Act, 1996 to entertain the petition against a notified person in view of the Special Courts (Trial of Offences Relating to Transactions in Securities) Act, 1992.

Issue (i): Whether, on the facts, interim protection should be granted against the first respondent for securing the petitioner's claim arising from the alleged non-delivery of shares.

Analysis: The petition was founded on an arbitration agreement and a claim that the respondents had failed to deliver shares despite receipt of the consideration. The Court found the respondents' assertion of delivery to be prima facie doubtful and considered that the petitioner required protection pending invocation of arbitration. The relief was confined to securing the claim if arbitration was initiated within the stated period.

Conclusion: Interim protection was granted against the first respondent.

Issue (ii): Whether the Court had jurisdiction under the Arbitration and Conciliation Act, 1996 to entertain the petition against a notified person in view of the Special Courts (Trial of Offences Relating to Transactions in Securities) Act, 1992.

Analysis: The Court held that section 9B of the Special Courts Act conferred on the special court the powers of a court under the earlier arbitration law for matters falling within section 9A. It further held that section 42 of the Arbitration and Conciliation Act, 1996 did not override that scheme, since section 8 of the General Clauses Act, 1897 required the reference to the repealed Arbitration Act, 1940 to be construed as a reference to the re-enacted 1996 Act. The Special Courts Act was treated as a self-contained code with overriding effect, and a court under section 2(e) of the 1996 Act could not assume jurisdiction over arbitration proceedings involving a notified person.

Conclusion: The petition was not maintainable against the notified person before the High Court.

Final Conclusion: Relief was granted only against the first respondent, while the challenge against the notified second respondent failed for want of jurisdiction under the special statutory scheme.

Ratio Decidendi: Where a special statute confers exclusive jurisdiction on a special court for disputes involving notified persons, a later general arbitration jurisdiction clause does not displace that exclusivity, and references to the repealed arbitration law are construed as references to the re-enacted law unless a different intention appears.

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