EDELWEISS BROKING LIMITED Vs. PRATHAM INVESTMENTS

JUDGEMENT

(1.) The present First Appeal arises out of the impugned judgment and order dtd. 28/11/2022 dismissing the Commercial Civil Misc. Application No.155 of 2022 under the Sec. 34 of the Arbitration and Conciliation Act, 1996 ("Arbitration Act" for the sake of brevity).

(2.) The brief facts in the present case are that the appellant herein is a company, which is a trading member/stockbroker registered with the Securities Exchange Board of India (SEBI) and a trading member of the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE). The respondent is an investor in the stock market and does his transactions in the stock market through the appellant availing its services. The appellant executes trades on various segments including Futures and Options (F and O) Segment of NSE on behalf of its clients. That the appellant places orders and executes trades on behalf of the respondent, who has been carrying on trades across all segments in large quantities and value.

(3.) Mr. Mihir Joshi, the learned senior counsel appearing on behalf of the appellant company submits that though the award dtd. 30/3/2022 is partly held in favour of the appellant and partly in favour of the respondent, the said award has granted the claim of the respondent. He submits that the impugned award rewrites the contract between the parties and approves the claim of the respondent by reading in clauses/regulations, which are not otherwise in existence. He submits that there is patent illegality. The findings are completely contrary to the material on record and many of the findings are based on no evidence, which render the award completely perverse. Mr. Joshi, the learned senior counsel has taken the Court through the transcripts of various discussion between the parties done telephonically on the date of the incident. He submits that this discussion shows that the respondent was made aware of the shortfall in the margin and that he was also intimated and called upon to maintain the same. However, due to heavy volatility and also the fact that the stock market fell again after the trading resumed, after one hour, the loss of the respondents had surged from Rs.13.24 crores to Rs.17.91 crores. The learned senior counsel appearing on behalf of the appellant company would submit that the material on record clearly shows that even if assuming that the findings arrived at by the forums below are considered, the respondent has not suffered any actual loss and on the contrary, if the appellant had not taken any corrective action, the respondent would have suffered much more loss. It is submitted that in fact, stopping losses of the respondent has actually benefited to the respondent. Further, it was the liability of the respondent to meet its margin requirement, which was duly informed to him by the company during the telephonic discussion between the parties on the said date of incident. He submits that the award dtd. 30/3/2022 has travelled beyond the scope of the contract as well as the regulations of NSE. He submits that the Arbitral Tribunal has erroneously held that it was necessary for the appellant to raise quantified demand from the respondent and the forums below have erroneously construed clause 3.10(a) and 3.10(b) of the NSE F and O Regulations, which is not a possible view to take. He, therefore, submits that the impugned order be set aside and the present First Appeal be allowed.