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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 seeks to challenge arbitration awards citing unauthorized trades. (Para 1 , 2 , 3) |
| 2. petitioner's grounds of challenge assessed against evidence of active participation in trades. (Para 6 , 7 , 10 , 24) |
| 3. court finds primary and appellate awards defensible and affirming authorized trading. (Para 8 , 21) |
| 4. petition dismissed with no imposed costs despite losses incurred. (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 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 the “Impugn
Participation and informed consent in trading negate claims of unauthorized trades in securities arbitration.
A party cannot claim lack of authorization for trades where active participation and knowledge of transactions are evident.
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 court emphasized the minimal judicial interference mandated by the Arbitration Act and the need for a more hands-off approach in arbitration proceedings.
The court emphasized the importance of affording parties the opportunity to present their views on vital documents and the consideration of all relevant evidence by the Arbitral Tribunal, as failure ....
The main legal point established is that for a challenge under Section 34 of the Arbitration Act, the petitioner must establish that the award violates public policy or is patently illegal.
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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