SHAUNIK INFOTECH PVT LTD Vs. INDIA INFOLINE LTD

JUDGEMENT

(1.) Heard learned Counsel for the parties.

(2.) This petition challenges an award passed by the appellate arbitral tribunal of National Stock Exchange of India Ltd.('NSE') in the matter of arbitration under NSE bye-laws, rules and regulations .

(3.) The Petitioner is a registered client and constituent of the Respondent, who is a trading member of NSE. The relationship between the parties has been governed by a broker client agreement executed between them on 7 November 2007. Under this agreement, the Petitioner has been dealing in both cash and F&O segments of the market through the Respondent at NSE. Disputes between the parties have arisen as a result of market conditions obtaining between 17 January 2008 to 22 January 2008. The market witnessed an unusual crash in stock prices on these dates. It was the case of the Respondent, who was the claimant before the arbitral tribunal, that at the close of working hours on 17 January 2008, there was a large debit balance in the account of the Petitioner. The debit balance was said to be in a sum of over Rs.94 lakhs. The Respondent claimed to have given due intimation of this debit balance and called upon the Petitioner to settle the same by money or collaterals but the Petitioner did not do so. The market fell further and substantially on two consecutive dates after 18 January 2008, i.e. on 21 and 22 January 2008. By the end of trading hours of 22 January 2008, the debit balance in the Petitioner's ledger account had risen to Rs.1,17,83,079.49. As a result, the Respondent squared up the Petitioner's balance position by sale of shares. Further sales took place on 28 January 2008 and 15 February 2008 by way of squaring off the outstanding position of the Petitioner. Even after the sales, there was a debit balance in the account in a sum of over Rs.46 lakhs. The Respondent, in the premises, initiated arbitration proceedings against the Petitioner. The Petitioner raised counter claims before the arbitral tribunal for unauthorised squaring up of its position on 22 January, 28 January and 15 February 2008. The arbitral tribunal passed an award on 21 May 2010 allowing the Respondent's claim and rejecting the Petitioner's counterclaim. Being aggrieved, the Petitioner filed a challenge petition before this court. Before this court, the award was set aside by consent of parties and the matter was remanded to NSE for a fresh arbitration. On remand, the parties filed before the arbitral tribunal fresh additional pleadings and submissions. The tribunal, by its award dated 20 February 2012, once again allowed the Respondent's claim and rejected the Petitioner's counterclaim. The Petitioner thereafter carried the matter in appeal before the appellate arbitral tribunal of NSE. After hearing the parties, the appellate arbitral tribunal passed the impugned award upholding the original award dated 20 February 2012. This appellate award is the subject matter of challenge in the present petition.