Arbitral award set aside for perversity where repeated trade confirmations and delayed objection undermined unauthorised-trade claim.

Repeated post-transaction confirmations, acceptance of the ledger balance without protest, and only a belated objection were treated as strong indicators that the trades were not to be regarded as unauthorised merely because pre-trade authorisation was disputed. The arbitral award was found to have ignored vital material and to be cryptic and perverse, so the Section 34 court was within its jurisdiction in setting aside the majority award. On further appeal, no basis was shown to disturb that conclusion, and interference with the order setting aside the award was declined.

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Issues: Whether the arbitral award, as interfered with under Section 34 of the Arbitration and Conciliation Act, 1996, suffered from perversity or jurisdictional error warranting interference in the appeal under Section 37; and whether the trades in question were unauthorised despite the constituent's post-transaction confirmations and belated objection.

Analysis: The dispute turned on whether the constituent had authorised the trading transactions. The record showed repeated confirmations of the transactions over a period of months, confirmation of the ledger statement, acceptance of the balance amount without protest, and only a belated challenge. In such circumstances, the absence of pre-trade authorisation could not be treated as making the trades blatantly unauthorised so as to permit the constituent to avoid the consequences of confirmed transactions. The majority arbitral award had ignored vital material and was found to be cryptic and perverse. The single judge, therefore, remained within the permissible scope of Section 34 in setting aside that award. In the appeal, no basis was shown to displace that conclusion.

Conclusion: The challenge failed. The finding that the trades could not be treated as unauthorised in the face of repeated confirmations and delayed objection was upheld, and the interference with the arbitral award was sustained.

Final Conclusion: The appellate court declined to interfere with the order setting aside the majority arbitral award, with the result that the respondent succeeded and the appellant's challenge was rejected.

Ratio Decidendi: A constituent who repeatedly confirms transactions and raises objection only after an unexplained delay cannot later repudiate those trades on the ground of absence of pre-trade authorisation; an award ignoring such material may be set aside as perverse, and appellate interference under Section 37 remains limited to whether the Section 34 court acted within jurisdiction.

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