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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
SOMASEKHAR SUNDARESAN
Jagadeesa G.Chary – Appellant
Versus
Nirmal Bang Securities Pvt. Ltd. – Respondent
| Table of Content |
|---|
| 1. petitioner challenges awards based on unauthorized trades in past transactions. (Para 1 , 2 , 3) |
| 2. court finds evidence of petitioner's active trading participation invalidates claims. (Para 6 , 25) |
| 3. petitioner objected to arbitrators after proceedings, which is not permitted. (Para 26 , 28 , 29 , 30) |
| 4. final conclusion emphasizes the dismissal of the petition with no imposed costs. (Para 35 , 36) |
JUDGMENT :
SOMASEKHAR SUNDARESAN, J.
Context and Factual Background:
1. This is a Petition filed under Section 34 of the Arbitration and Conciliation Act, 1996 (“the Act”) impugning an Arbitral Award dated October 15, 2013 (“Appellate Award”), which in turn is an affirmation of another Arbitral Award dated April 15, 2013 (“Primary Award”), rejecting the Petitioner’s claims against the Respondent in arbitration proceedings conducted at the National Stock Exchange (“NSE”).
2. The Petitioner had demanded refund of a sum of Rs.14,87,014.43, which the Petitioner claims is not payable by him by reason of all trades (except one) carried out by the Respondent being “unauthorised trades”. In this judgement, the Appellate Award and the Primary Award are collectively referred to as th
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's decision underscores the principle that it should not lightly interfere with arbitral awards and should uphold decisions in conformity with relevant regulations and bye-laws.
Profits from trades executed on erroneously credited margin belong to the client, not the broker, as retention by the broker amounts to unjust enrichment.
The limited scope of interference in arbitral awards under section 34 of The Arbitration and Conciliation Act, 1996, and the importance of documentary evidence in evaluating claims.
The court emphasized the minimal judicial interference mandated by the Arbitration Act and the need for a more hands-off approach in arbitration proceedings.
Arbitral awards set aside under Section 34 for perversely ignoring vital evidence like party's police complaint admitting trade authorisation and tax returns, constituting patent illegality.
Arbitration and Conciliation –Rule 13(V) which provides that the member shall be responsible in all acts, omission and commission for the authorized person would apply only if such authorized person ....
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