Authority: Madras High Court, Chennai (Original Side Appeal)

Order Date: 12-10-2026

Case Overview

  • Parties: Appellant (claimant) – senior citizen doctor from Thrissur, Kerala (deceased A.V. Vijayakumar and heirs); Respondent – Sharekhan Limited, a depository participant.
  • Background: Claimant opened a depository account with Sharekhan for dematerialisation of his shares. He alleged that Sharekhan sold his shares without his consent and without duly signed contract notes.
  • Arbitration: Initial arbitration by arbitrators (Paul V Das, A.V. Haridasan, K.K. Balu) dismissed the claim. The Panel of Appellate Arbitrators later awarded the claimant Rs.12,50,053 with 18% interest from the date of award.
  • Section 34 Appeal: Claimant filed an appeal under Section 34 of the Arbitration and Conciliation Act, 1996, seeking to set aside the award. The Learned Single Judge of this Court held it lacked jurisdiction and directed the claimant to approach the Bombay High Court.
  • Current Appeal (OSA No. 283 of 2021): The appellant challenged the Single Judge’s jurisdictional finding, arguing that the depository agreement, NSE trading regulations, and NSE bye‑laws designate the court nearest the claimant’s KYC address as the competent forum.
  • Key Contractual Provisions:
  • Depository agreement dated 13‑02‑2006 – Clause 1.7.13 mandates arbitration per NSE rules; Clause 22 states courts in Mumbai have exclusive jurisdiction, subject to Clause 1.7.18.
  • Clause 1.7.18: Parties submit to jurisdiction of courts specified by exchange bye‑laws and regulations.
  • NSE Trading Regulations – Clause 5.3 requires Section 34 applications to be filed in the court nearest the regional centre where appellate arbitration was conducted.
  • NSE Bye‑law 17 (Chapter XI) specifies arbitration and appellate arbitration to be conducted at the regional centre nearest the constituent’s KYC address; Section 34 applications must be filed in the court nearest that address.
  • Application of Clauses: The claimant’s KYC address is Deepa Clinic, Thiruvilwamala, Thrissur (Kerala). The nearest NSE regional centre is Chennai, where the appellate arbitration was held. Hence, the competent court for the Section 34 application is the Madras High Court.
  • Section 42 of the Arbitration Act: Stipulates that once an application under the Act is made to a particular court, that court alone has jurisdiction over subsequent applications, unless the court is not the one designated by the arbitration agreement. The Court held that the Bombay High Court was not the jurisdiction‑specified court, so Section 42 does not confer jurisdiction to it.
  • Conclusion: The Madras High Court has exclusive jurisdiction to entertain the Section 34 application; the earlier Single Judge’s order directing the claimant to the Bombay High Court is erroneous.

Final Outcome

  • The judgment of the Learned Single Judge is set aside in its entirety.
  • The appeal is allowed; the matter is remanded to the Learned Single Judge for consideration of the Section 34 application on its merits.
  • Each party is directed to bear its own costs.

Topics: Arbitration Jurisdiction, Depository Dispute