Confirmed trades and agency liability: client and broker remained liable despite lack of prior written authorisation.

Absence of pre-trade written authorisation did not by itself absolve a client from liability for confirmed trades where the surrounding records, including contract notes, alerts, account statements and conduct such as pay-ins and pay-outs, indicated conscious acceptance and no timely objection was raised. The Court also treated the broker as liable for the fraudulent and unauthorised acts of its Alliance Partner and employees because those acts were committed within the agency structure and in the course of the broker's business, and the broker benefited from the resulting trading activity. On that reasoning, no ground was found to interfere with the arbitral award or the Section 34 order, and the challenge failed.

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Issues: (i) Whether, in the absence of timely objection and written or recorded instructions, the client could avoid liability for the trading losses and brokerage charges arising from the disputed transactions; and (ii) whether the stock broker was liable for the fraudulent and unauthorized acts of its Alliance Partner and his employees, including on the basis of vicarious liability.

Issue (i): Whether, in the absence of timely objection and written or recorded instructions, the client could avoid liability for the trading losses and brokerage charges arising from the disputed transactions.

Analysis: The Court applied the settled principle that absence of prior written or recorded authorisation is not by itself conclusive of unauthorized trading. The surrounding material, including contract notes, SMS alerts, e-mails, ledger statements, and the client's conduct in making pay-ins and accepting pay-outs, had to be assessed to ascertain whether the client exercised conscious and autonomous choice. The Court held that where the client fails to object within a reasonable time, the client cannot ordinarily wriggle out of the consequences of trades that were confirmed through transaction alerts and other records, unless the case falls within the exception of blatantly unauthorized trading.

Conclusion: The client could not avoid liability on this ground, and the challenge to the award could not succeed merely because pre-trade authorisation was absent.

Issue (ii): Whether the stock broker was liable for the fraudulent and unauthorized acts of its Alliance Partner and his employees, including on the basis of vicarious liability.

Analysis: The Court held that acts of an agent committed in the course of employment and within the scope of the agency bind the principal, even if the principal did not authorise or know of the misconduct. It further held that the broker had appointed the Alliance Partner to operate within its business framework, the trades were carried out through that agency structure, and the broker benefited from the abnormal brokerage generated. The Court also found that the arbitral award recorded evidence of misleading assurances, pressure tactics, excessive trading, and manipulation amounting to civil fraud, which placed the case outside the limited principle that mere absence of pre-trade authorisation may not by itself nullify trades.

Conclusion: The stock broker was liable for the acts of its Alliance Partner and his employees, and no ground was made out to interfere with the arbitral award or the order under Section 34.

Final Conclusion: The appeal was dismissed, and the arbitral award, as affirmed by the Section 34 court, was left undisturbed.

Ratio Decidendi: Absence of pre-trade authorisation does not by itself absolve a client from the consequences of confirmed trades, and a principal is liable for fraudulent acts of an agent done within the scope of the agency and in the course of the principal's business.

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