The judgment establishes the importance of fair treatment, consideration of evidence, adherence to substantive and procedural laws, and the need for SEBI to issue guidelines to avoid conflicting views in arbitration proceedings.

The Petitioner has challenged Award dated 10 February 2010 passed by the Arbitral Tribunal constituted in the matter of arbitration under the Bye-laws, Rules and Regulations of National Stock Exchange of India Limited (NSE).

2. The Petitioner is the client of the Respondent who is a member of NSE and also a member of Bombay Stock Exchange (BSE). The Petitioner has entered into a broker-client agreement along with other necessary documents and accordingly a client code was allotted. The Petitioner permitted the Respondent to send contract notes in digital format and for that provided the email ID. As per this agreement, the Respondent undertakes to do trading on behalf of the Petitioner and need to inform about the transactions through the contract notes. The Petitioner agreed to collect the contract notes and in case of non-collection, the Respondent was permitted to dispatch the same, apart from sending in digital form. There is no dispute with regard to the agreement terms. Additionally, the Petitioner along with husband, son and daughter-in-law also signed a “group adjustment letter”.

3. The Petitioner was holding certain shares in her DP account and had provided the shares as margin for trades to be carried out under her instructions. The case was that the unauthorized trades resulted in a loss of Rs. 9,37,568/-. The Respondent also wrongfully disposed of her holding of Rs.23,51,844/-. Therefore made a claim of Rs. 32,89,412/-with 18% interest per annum.

4. The objection was also raised about wrongful debts and inaction on the part of Respondent not to sell the holdings, apart from the wrongful selling of her holdings. The Petitioner even denied signature on the group adjustment letter with the Respondent and also stated it to be null and void as the same letter was initially issued to one Investor Services Private Limited and SS Kantilal I Ltd. The learned Arbitrator has recorded rightly that those were former names of Respondent/Sharekhan Limited. Therefore the written contract is binding, including the group adjustment letter. It cannot be stated to be null and void.

5. It is necessary to note the contents of the group adjustment letter as it goes to the root of the matter. It is undisputed that the Petitioner along with others registered with the Respondent for dealing in cash and derivative segments of BSE and NSE and opened the separate accounts in each segments. However, for operational purposes, by this letter, they agreed to treat all the other’s trade accounts as one and all of them have authorised the Respondent to adjust the balances in any or all of their accounts with the Respondent or vice versa. The Petitioner along with others, by the signed documents has also agreed as under :

“In consideration of your agreeing to the aforesaid, we hereby irrevocably and unconditionally authorize you to treat our accounts as one and authorize you to pass such entries as may be required to give effect to this purpose and intent.

Without affecting the generality of the aforesaid we hereby irrevocably and unconditionally authorize you do the following in our accounts maintained with you.

1 Pass journal entries adjusting the debit balance of any one or all of us against credit balance of any one or all of us in any account maintained by you.

2 Consolidate our accounts for the purpose of ascertaining limits available to us.

3 Withhold payment to any or all of us against payments due from any or all of us in any account.

4 Withhold securities due to any or all of us against dues of any or all of us in any account.

Such entries passed by you to give effect to the authorization given herein shall be binding on all of us and we shall not dispute the same. We also undertake to pass necessary accounting entries in our respective books of accounts to give effect to entries passed by you on the basis of authority given to you vide this letter.

This authority is given to you singularly and jointly.”

6. The Petitioner, along w