The appellant is M/s Emkay Global Financial Services Ltd and the Respondent was Mr.Girdhar Sondhi, who was a registered broker with the National Stock Exchange. In this case the Appellant was one of the Respondent’s clients. The Respondent had initiated the arbitral proceedings against the Appellant and claimed for an amount of Rs.7, 36,620. The arbitration proceeding took place in accordance to the arbitration agreement dated 3rd July, 2008. The agreement provided exclusive jurisdiction to the courts in Mumbai. In this case the National Stock Exchange presented the case to a sole arbitrator who conducted the proceedings in Delhi and passed an award dated 8th December, 2009 rejecting the claims of the respondent. Further the Respondent failed a claim under Section 34 of the Arbitration and Conciliation Act for setting aside the award. The District Court dismissed the claim of the Respondent, on the ground that it does not have the jurisdiction on the basis of the exclusive jurisdiction clause in the agreement. Further, on an appeal to the Delhi High Court, the court held that the issue of jurisdiction was a question of fact and the parties were not allowed to lead evidence on it. The High Court directed the District Court to frame the issue, and then decide on evidence, and also give the opportunity to cross-examine witnesses who give depositions.
Section 34(2)(a) of the Act speaks of a party making an application who ‘furnishes proof’ of one of the grounds in the sub-section, such proof should only be by way of affidavit of facts not already contained in the record of proceeding before the arbitrator. The Respondent argued that the arbitral proceedings took place in Delhi and hence the Delhi Hugh Court will have jurisdiction over the issue, even though according to the arbitration agreement courts in Mumbai have exclusive jurisdiction. After referring to several judgements, the court held that the legal position by stating that an application for setting aside an arbitral award with respect to Section 34 of the Act, will not ordinarily require anything beyond the scope of the arbitrator. If the matter was not contained in such record and were relevant to the determination of the issue arising out of Section 34, they may be brought into the notice of the court (by a way of affidavits filed by both parties). Therefore the court set aside the judgement passed by the Delhi High Court.