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Investor Disputes – Bombay HC Quashes Arbitral Awards of NSE, BSE & MCX

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The controversy between the Stock Broker and the Client is summarized in four issues described in para 7 of the judgment.

The client had commenced trading through Sharekhan and Sharekhan Commodities in 2012.  However, the trades were executed by his CA, whose wife was “authorized person” of the said stock brokers.

 

Interesting facts – One of the members of MCX Appellate Arbitral Tribunal held against client and in favour of broker in the Award dated 30.12.2016.  

The same member who was also a member of NSE Appellate Tribunal held against broker and in favour of client vide Award dated 12.1.2017.

Worse, two arbitral awards analysing very same type of evidence & nature of facts but with opposite inferences were passed in less two weeks.

This anomalous position simply does not permit acceptance either of these awards.   Each is polluted by the diametrically opposing view taken by a member of Arbitral Tribunal when acting as a member of another Tribunal.

The diametrically opposing views of same Arbitrator is fatal to two awards.

The ledger for the trades on the NSE and BSE is one and the same.

The proceedings at BSE present another complexity.  CA who filed returns of client subsequently led the evidence he had indeed carried out trades without knowledge.   This change of stance is not dealt with at all in the BSE Appellate Arbitral Award.  NSE trades were integral to the client account with Sharekhan’s books.

Three Arbitral Awards have been rendered implausible.   It is not possible to segregate them from one another to save one award from the infirmities of other awards.

Judgment dated 16.9.2025 of the High Court of Bombay in Arbitration Petition No.456 of 2017 of Sharekhan Ltd   Vs. Arjav Jagannath Chakravarti and others with connected matters.

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