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2025 Arbitration High Court Latest Legal October 2025

Bombay HC Message to Market Arbitral Tribunals – Arbitral Awards must be evidence-based

October 30, 2025 legaldeli

Respondent engaged the petitioner to open Demat and Trading Account in January, 2016. Thereafter, other group concerns and family members of the respondent also opened such accounts with the petitioner between January to October, 2016.

On 21.10.2016, the respondent informed the petitioner not to convey any order / trader confirmation on real time basis during market hours. It was specified that end of the day trade confirmation through SMS / emails / calls would suffice and the respondent would revert back in 24 hours if there are any issues. The petitioner never raised any grievance to the trade and transactions in 2016-2017.

On 28.7.2017, the respondent filed complaint before the National Stock Exchange alleging that the petitioner had fraudulently induced it to open account by initial giving profits. On this basis, it was claimed that the respondent and others duped and suffered losses.

By the order dated 11.9.2017, the Investor Grievance Redressal Panel (IGRP) directed the petitioner to pay Rs.7.18 lakhs (i.e. 50% of the losses) to the respondent.

The Sole Arbitrator appointed by the National Stock Exchange confirmed the said order and dismissed the claim of the petitioner vide order dated 11.9.2017.

HELD that as per decision in 2025 SCC OnLine Bombay 715 (Ulhas

Dandekar Vs. Sushil Financial Services) and the SEBI Circular dated 22.3.2018, Regulation 3.4.1 of NSE (Future & Options Segment) Trading Regulations is directory and not mandatory. However, the Sole Arbitrator erroneously relied on the Regulation 3.4.1 as mandatory and held the petitioner responsible for losses of the respondent. Thus, the arbitral award is in conflict with the established position of law and hence, in conflict of public policy under Section 43(2)(b)(i) of the AA.

Even if the award found losses suffered by the respondent, there was no cogent evidence on the extent of liability of the petitioner for such losses. The Arbitrator could have insisted on empirical evidence to ascertain extent of loss. Therefore, the award is clearly hit by section 34(2-A) of the AA.

Judgment dated 14.10.2025 of the High Court of Bombay (OS) in Writ Petition No.157 of 2024 of Peerless Securities Limited Vs. Vostok (Fareast) Securities Pvt Ltd

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