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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
Somasekhar Sundaresan
Dhwaja Shares and Securities Private Limited – Appellant
Versus
Sunita A. Khatod – Respondent
| Table of Content |
|---|
| 1. overview of petitions and involved parties. (Para 1 , 2 , 3 , 4) |
| 2. core arguments against the arbitral findings. (Para 8 , 9 , 10 , 11) |
| 3. court's observations regarding trade authorization. (Para 16 , 17 , 18 , 19 , 20 , 24) |
| 4. critique of arbitral tribunal's decision-making. (Para 21 , 22 , 23 , 25) |
| 5. discussion on regulatory compliance and trading authorization. (Para 28 , 29 , 30 , 31) |
| 6. final decision on the status of awards. (Para 32 , 33 , 34 , 35 , 36) |
JUDGMENT :
Somasekhar Sundaresan, J.
Context and Factual Background:
1. This is a bunch of Petitions under Section 34 of the Arbitration and Conciliation Act, 1996 (“the Act”) challenging a set of arbitral awards (for purposes of this judgement, “Impugned Award”) passed at the second and appellate stage under the statutory arbitration conducted pursuant to the National Stock Exchange of India’s (“NSE”) Bye-Laws. The Petitions are filed by multiple members of the same family that had engaged the same stock broker.
2. By consent of the parties, Arbitration Petition No.1413 of 2019 was marked as the lead Petition with all dates and page numbers that are referred to, being adopted from the lead Petition. Learned Couns
Arbitrators must decide disputes based on contractual terms, not arbitrary notions of fairness; unsubstantiated regulatory violations cannot justify halving awarded amounts when parties knowingly eng....
Stockbroker liability for losses in trades hinges on adherence to SEBI Circulars; regulatory violations alone do not create client compensation rights without proof of actual loss.
Absence of prior written instructions does not absolve a client of liability for trades if evidence shows active participation and knowledge.
Stock brokers have a contractual obligation to adjust client balances inter se family accounts when provided under account agreements, emphasizing accountability for unauthorized transactions.
A party cannot claim lack of authorization for trades where active participation and knowledge of transactions are evident.
Participation and informed consent in trading negate claims of unauthorized trades in securities arbitration.
The court affirmed the arbitral tribunal's jurisdiction over a husband based on an oral agreement of joint liability for transactions in his wife's account, rejecting claims of lack of jurisdiction a....
An arbitral tribunal lacks inherent jurisdiction to adjudicate a claim against a third party arising out of a private transaction not governed by an arbitration clause.
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