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.

JUDGMENT

(Prayer: This Petition has been filed under Section 34(2)(a)(b)(ii) of the Arbitration and Conciliation Act 1996 to set aside the arbitral award dated 22.07.2019 and correction award dated 24.09.2019 passed by the Hon'ble Arbitrator with costs and claim Rs.10,00,000/- with interest thereon.

1. The petitioner assails an arbitral award dated 22.07.2019 and the subsequent order passed in the petition under Section 33 of the Arbitration and Conciliation Act, 1996 (the Arbitration Act)(collectively referred to as the Award) under Section 34 of the Arbitration Act.

2. The petitioner is a member of the first respondent, which is engaged inter alia in providing broking services in relation to derivative contracts in commodities. After opening a trading account on 10.01.2018, the petitioner carried out trade in commodity derivatives through the Multi Commodity Exchange(MCX) from time to time. The petition relates to orders placed for derivative contracts in a commodity called crude oil mini in February, 2019. The petitioner incurred losses upon execution of the relevant trades. Since the petitioner had grievances both on the ground of failure to advice and technical glitches in the system, a complaint was lodged with the Investors Grievance and Redressal Committee (IGRC) of the MCX. By order dated 23.02.2019, the IGRC rejected the complaint on the ground that the petitioner had undertaken trading from his own terminal and that the relevant trades were 'at market' transactions. On the petitioner's grievance that he had not been properly advised by the first respondent, the IGRC recorded the finding that it was not possible to provide advice because the trades were carried out by the trader on his terminal. The decision of the IGRC was assailed before the Arbitral Tribunal. The petitioner prayed for an award of Rs.10,00,000/- as damages for the loss incurred by him due to the default of the first respondent.

3. The first respondent filed a written response and denied the assertion that the said respondent was under an obligation to provide advice. The further grievance that there was a technical glitch was refuted by relying upon systems audits that were conducted by the first respondent. Eventually, the Arbitral Tribunal rejected the petition on the ground that the petitioner had placed market orders and that such orders can only be executed as per the instructions of the petitioner. The said award is under challenge herein.

4. The petitioner appears in person. His first contention is that he placed 'limit' orders in respect of the transactions in February, 2019 and not market orders. In support of this contention, he draws reference to the screen shot at page 141 of the typed set of papers filed by him. When queried as to whether he pleaded that he placed 'limit' and not 'market' orders before the Arbitral Tribunal, he states that he challenged the order of the IGRC before the Arbitral Tribunal. Since the IGRC had recorded that he had carried out 'at market' transactions, he was not in a position to plead that he had placed limit orders and not market orders. The second contention is that the petitioner should have been properly advised about the option of placing a limit order and that the first respondent failed to fulfill the said obligation. The third contention is that the first respondent did not comply with applicable circulars of SEBI in relation to the opening of trading accounts and, in particular, with regard to obtaining the consent of a trading member in relation to orders placed by such member. The party-in-person also submitted that the log sheet on which the first respondent relies was not placed before the Arbitral Tribunal. According to him, the only documents placed before the Arbitral Tribunal by the first respondent were the documents annexed to the letter dated 15.4.2019, which is at page 157 of the typed set of papers. For all these reasons, he states that the impugned award is liable to be set aside.

5. Learn