MPD ASSOCIATES PVT. LTD. v. ANGEL BROKING LTD. AND 2 ORS.

Arbitration - Objection to Jurisdiction: Failure to Raise Issue Before Arbitral Tribunal Precludes Challenge Under Section 34; Upholding Arbitral Award.

Court: Bombay High Court
Citation: 2025:BHC-OS:23107
Decision Date: 02-12-2025

List of Laws

The Arbitration & Conciliation Act, 1996; The Companies Act, 1956; Bombay Stock Exchange (BSE) Rules and Regulations; Section 34 of the Arbitration & Conciliation Act, 1996; Section 16 of the Arbitration & Conciliation Act, 1996; Principles of Natural Justice

Case Brief

Facts: MPD Associates Pvt. Ltd. (Petitioner) challenged an arbitral award dated March 27, 2008, passed by an Arbitral Tribunal of the Bombay Stock Exchange (BSE). The dispute arose from transactions conducted by the Petitioner through Angel Broking Ltd. (Respondent), a corporate member-broker of BSE. The Petitioner alleged that it was lured into doing business with the Angel Group of Companies by a representative, and that the Tribunal was constituted ex-parte without proper notice or consultation.
Procedural Posture: The Petitioner filed Arbitration Petition No. 1634 of 2014 under Section 34 of the Arbitration & Conciliation Act, 1996, seeking to set aside the arbitral award. The Respondent argued that the petition was not maintainable due to the Petitioner's failure to file an appeal memo within the stipulated 15-day limitation period as per BSE Regulations, and that the Petitioner had not objected to the Tribunal's constitution during the arbitral proceedings.
Issue: (1) Can a plea of lack of jurisdiction be raised for the first time under Section 34 of the Arbitration & Conciliation Act, 1996, if no such objection was taken before the Arbitral Tribunal? (2) Does the award suffer from patent illegality and/or incorrect interpretation to warrant interference under Section 34 of the Act?
Holding: The Bombay High Court dismissed the Arbitration Petition, upholding the arbitral award. The Court held that the Petitioner could not raise the plea of lack of jurisdiction for the first time under Section 34, as it had failed to object to the Tribunal's constitution during the arbitral proceedings. The Court also found no patent illegality or procedural infirmity in the award.
Reasoning: The Court relied on the Supreme Court's decisions in Union of India v. Pam Development (P) Ltd. and Gas Authority of India Ltd. v. Keti Constructions (I) Ltd., which established that a party waives its right to object to the jurisdiction of the Arbitral Tribunal if it fails to raise the objection during the arbitral proceedings. The Court noted that the Petitioner had participated in the arbitration by filing a written statement and raising a counterclaim, without objecting to the Tribunal's jurisdiction. The Court also found that the Tribunal had dealt with the Petitioner's contentions and that the counterclaim was rejected because it pertained to transactions outside the scope of the BSE. The Court concluded that the Petitioner was given sufficient opportunity to present its case and that there was no basis to set aside the award under Section 34 of the Act.