ORDER :

PRAYER: Arbitration Original Petition filed under Section 34(1) of the Arbitration and Conciliation Act, 1996, pleased to set aside the arbitral award dated 01.12.2021 bearing No.A.M.No.NSECRO/0040799/20-21/ARB/APPL passed by the Arbitral Tribunal in its entirety and to direct the arbitral tribunal in accordance with Section 34(4) to continue the arbitration so as to award counter claim / claim of Rs.822,617/- with interest in favour of the petitioner.

The petitioner was a client of the respondent stock broker and traded on the National Stock Exchange (NSE) by availing of the stock broking services of the respondent. For the sake of convenience, the petitioner is are referred to as the Client and the respondent as the Stock Broker throughout this order.

2. The Client provided consent for the Margin Trading Facility (MTF) offered by the Stock Broker so as to be in a position to trade without remitting the full consideration for the traded shares. MTF was extended to the Client on the terms and conditions set out in the relevant consent document. The Client also signed a declaration on 16.04.2019 to the effect that he had received and read all relevant documents relating to trade in the securities market through the Stock Broker. Thereafter, several trades were executed online by the Client over a period of time. The focal point of the present challenge is the sale of about 96,000 shares of Yes Bank by the Stock Broker for and on behalf of the Client on 06.03.2020. After taking into consideration and giving credit to amounts realized from the sale of the shares of Yes Bank, the Stock Broker initiated proceedings before the arbitral tribunal constituted in accordance with the bye-laws of the NSE for the recovery of a sum of Rs.6,75,943/-. In response, the Client filed a statement of defence along with a counter claim for a sum of Rs.8,22,617/-. Such counter claim represented the positive credit balance which would have been available if 96,000 shares of Yes Bank had been sold at Rs.29/- per share on 11.03.2020. The said arbitral proceedings culminated in the award dated 09.04.2021 (the First Arbitral Award). By the said Award, the claim of the Stock Broker was allowed and the counter claim of the Client was rejected.

3. Since the bye-laws of the NSE provide for a two-tiered mechanism for resolution of disputes, the Client assailed the First Arbitral Award before a panel of three arbitrators. In the appeal, the Client called upon the arbitral tribunal to reject the original claim of the Stock Broker and allow the counter claim made by the Client. By arbitral award dated 01.12.2021 (the Impugned Award), the claim of the Stock Broker was affirmed and the counter claim was rejected.

4. The Client, who is an advocate by profession, appears in-person. The first contention raised by him is that the stamp duty on the Impugned Award was paid by the Stock Broker. According to him, this is evidence of bias and the absence of neutrality on the part of the arbitral tribunal. The second contention, which may be characterised as the principal contention, is that the Stock Broker violated the material requirements of Section 176 of the Indian Contract Act, 1872 (the Contract Act) because the relevant shares were sold by the Stock Broker/pledgee, without providing reasonable notice to the Client/pledgor. In support of this contention, the judgment of the Allahabad High Court in Prabhat Bank Ltd. v. Babu Ram AIR 1966 All 134, particularly paragraph 6 thereof was relied upon. In addition, the judgment of the Supreme Court in PSA Sical Terminals v. The Board of Trustees of V.O. Chidambaranar Port Trust, judgment dated 28.07.2021 in Civil Appeal Nos.3699 to 3700 of 2018, was placed for consideration. In particular, the extract from Ssangyong Engineering and Construction Company Limited v. National Highways Authority of India (Ssangyong), (2019) 15 SCC 131, in the said judgment was referred to contend that an arbitral award which is perverse is lia