The decision of the Arbitral Tribunal is final and binding, and the grounds for annulment under Section 34 of the Act are procedural in nature, focusing on the legitimacy of the process of decision.

V. Kameswar Rao, J.

1. As these two petitions, under Section 34 of the Arbitration & Conciliation Act, 1996 (‘Act’ for short), involve identical issues with more or less identical facts, they are being decided by this common order.

Facts

2. It was the case of the respondents that in order to carry out their investments opened trading accounts with National Stock Exchange (NSE) through the respondent in July, 2011 and signed the documents including KYC at Delhi. It was their case before the Arbitral Tribunal that the petitioner had assured to send copies of KYC documents to them from its Moradabad office but the same were not sent. The e-mails sent on November 19, 2011 proved futile. On July 31, 2011, the respondents along with her husband gave first cheque to the petitioner herein for an amount of Rs.25 lacs from a bank account jointly operated by them towards initial deposit. On August 01, 2011, certain trades were conducted in their account, for which they received contract notes from Sai Soft Securities. It was their case that they could not make out the difference between the respondent company and Sai Soft Securities. The respondents have also averred that in addition to signing KYC and other documents, they had also executed a written agreement on September 24, 2011 with Sai Soft Securities signed by Dr. Mayank Dubey as its authorized signatory, wherein they had given specific instructions as to how the trades in their account were to be conducted.

3. According to them, the petitioner had suggested that the respondents could enhance the value of the trade by giving securities as margin. On such representation, the respondents transferred securities as margin to demat account of the persons nominated by the petitioner. Regular transactions thereafter took place. These transactions were in the name of Sai Soft Securities. According to the respondents, on November 05, 2012 they had noticed that trades were not verified on the exchange’s portal. When the matter was taken up by the respondents with the NSE, no response was given, though they had followed up the matter with the Exchange thereafter. It is noted that in consultation with the respondents, on July 26, 2013 the petitioner trading member carried out hedging trades and through e-mail of July 31, 2013 contract notes were forwarded to the respondents with positions to close on October 31, 2013. It was the case of the respondents that the trading transactions took place after July 31, 2013 as well. Certain instructions given by the respondents to the petitioner with regard to trades and return of money to them were not carried out by the petitioner herein. Their complaints made to the Investor Grievances Redressal Forum of the Exchange resulted in an order dated January 09, 2014 whereby amounts of Rs.1.70 Crore and Rs.1.50 Crore became admissible to both the respondents herein. Meaningfully read, it was the case of the respondents that the petitioner had carried out unauthorized transactions fraudulently. The respondents in their claim petition had actually claimed an amount of Rs.1.93 Crore and Rs.1.57 Crore respectively.

4. The petitioner had contested the claims and filed a counter-claim. The only case set up by the petitioner was primarily against order dated January 09, 2014 passed by the Investor Grievance Redressal Forum being illegal and the action of the Exchange whereby amount of the petitioner has been withheld pursuant to the order of the Forum being without jurisdiction and had sought the setting aside of the said order and release of the amount by the Exchange. It was also the case of the petitioner herein that the Forum or the Arbitral Tribunal had the jurisdiction to consider any claim against the petitioner because it had not conducted any trades on behalf of the respondents on the platform of the exchange. It was also asserted that there was no written agreement between the parties to refer the dispute to the arbitration as per the byelaws of the E