Section 42 does not confer jurisdiction on a court lacking jurisdiction under the arbitration agreement.

The claimant, a doctor residing in Thrissur, alleged that Sharekhan had sold his shares without his consent.

The Appellate Arbitrators awarded him ₹12,50,053 with 18% interest, but he challenged the award under Section 34 of the Arbitration and Conciliation Act, 1996, seeking additional relief.

The Single Judge dismissed the Section 34 petition for want of jurisdiction and directed the claimant to approach the Bombay High Court. In this appeal, the parties contested only the jurisdictional ruling; Sharekhan also argued that its own Section 34 petition was already pending before the Bombay High Court and that Section 42 applied.

1. Whether the Madras High Court had jurisdiction to entertain the claimant’s Section 34 application under the depository agreement, NSE trading regulations and bye-laws.

2. Whether Section 42 of the Arbitration and Conciliation Act required the claimant’s application to be brought before the Bombay High Court, where Sharekhan had first filed a Section 34 application.

Section 42 of the Arbitration and Conciliation Act provides that, once an application under Part I is made in a court, that court alone has jurisdiction over the arbitral proceedings and subsequent applications arising from the arbitration agreement.

The Court interpreted this rule to apply where the first court approached is a competent court—that is, one with jurisdiction under the parties’ governing agreement—and not to confer jurisdiction on a court lacking it.

The parties’ depository agreement provided for Mumbai courts’ jurisdiction, subject to its clause incorporating the NSE bye-laws and regulations.

NSE Trading Regulation 5.3 directed that a Section 34 application be filed in the competent court nearest to the regional centre where the appellate arbitration was conducted; NSE Bye-law 17 provided for filing in the competent court nearest to the constituent’s KYC address.

The Court read the Mumbai-jurisdiction clause in the depository agreement together with the clause making transactions subject to NSE rules, bye-laws and regulations. It held that the Mumbai clause was therefore subject to the NSE provisions governing the court for a Section 34 application.

The claimant’s KYC address was in Thrissur, and the Court found Chennai to be the relevant regional centre and the competent court under the applicable provisions.

Although Sharekhan had first filed in Bombay, the Court held that this filing did not activate Section 42 because the Bombay High Court was not the competent court under the agreement and incorporated NSE provisions.

It set aside the Single Judge’s order and remanded the matter for consideration of the Section 34 application on its merits; the parties were directed to bear their own costs.