TaxTMI 
TaxTMI 
TaxTMI 
2025 (10) TMI 62
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....ange of India ("MCX"). The MCX, earlier a commodities derivatives exchange, at all times relevant to the proceedings, had become a stock exchange in the eyes of law. 2. At each of these stock exchanges, the disputes were subjected to two rounds of arbitration - one at the hands of the arbitral tribunal of the first instance and the other at the hands of an appellate arbitral tribunal constituted under the bye-laws of the respective exchanges. 3. On the BSE, the first arbitral award dated October 28, 2016 went in favour of the stock broker, Sharekhan Ltd. ("Sharekhan") while the appellate arbitral award dated March 22, 2017 went in favour of the stock broker's client and constituent Mr. Arjav Jagannath Chakravarti ("Arjav"). 4. On the NSE, the first award dated August 31, 2016 went in favour of Arjav and against Sharekhan. The appellate award dated January 12, 2017 too was in favour of Arjav but with one of the three arbitrators writing a dissenting award that disagreed with the majority award in all respects. 5. On the MCX, both the initial award dated September 5, 2016 and the appellate award dated December 30, 2016 went in favour of Sharekhan Commodities Ltd. ("Sharek....
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....m, which had allegedly been sold on the BSE without his authority to recover the debit balance in his account on the NSE, which debit balances were a product of unauthorised trades. 9. Ordinarily, this Court would place high regard for the decision of the arbitral tribunals, which are masters of the evidence, and the sole judge of the quantity and quality of evidence. As stated earlier, at the NSE, in the first round, the arbitral tribunal squarely held in favour of Arjav while in the second round, one of the three arbitrators dissented, holding that Arjav's version is unbelievable. At the MCX, in both rounds, the arbitral tribunals held Arjav's version to be unbelievable. 10. What turns in this matter is the fact that one of the arbitrators who was a member of the appellate arbitral tribunal at the MCX that resoundingly held against Arjav and in favour of Sharekhan was also a member of the appellate arbitral tribunal at the NSE, and one of the two arbitrators who resoundingly held against Sharekhan and in favour of Arjav. Worse, the two arbitral awards, analysing the very same type of evidence and drawing diametrically opposite inferences were passed with a time gap of less ....
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....irrelevant on the premise that it was held after the sale of the bonds on September 2, 2014. The arbitral tribunal took the stance that the volume of trading and the manner of trading would indicate that it would take a regular trader to transact in the manner found in the record, indicating that Arjav could not be considered capable of such trading. The following extracts would be adequate to bear this out:- 20. Reliance was placed by R1 on the voice recording of 2.9.14 to prove pre-trade confirmation. The Ld. Arbitral Tribunal has rejected the same as of no use since it was made much after the last trade was done on 22.7.14 and when the entire capital of the Applicant was wiped out. Moreover the recording was not about any particular trade but general in nature. 21. The Appellant Original R1 Broker has referred to SMS, e-mail and confirmation ledger to show that the Applicant was aware of the trading carried out in his account. But the same are post trade. The Appellant, has not been able to show any evidence that the Appellant Broker had been given prior authorization for carrying out trades in his (Client's) account. According to the Client Registration fo....
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....y the grounds of appeal which are general in nature and are repetitive. The transcript of the vice recording indeed exposes the falsity of the Appellant's claim and nails him. The conversation in the said transcript between the Appellant and Respondent's employee is quite interesting. It's authenticity and contents are not denied by the Appellant nor has he said that the voice answering the questions was not his. With respect to ECN also the Appellant has changed his version. Initially he has stated that he did not receive any contract note; later on however he has made a statement that he did not receive contract note with respect to all the transactions. All along he has pleaded his so called ignorance and naivety in understanding dealings; but he cannot use them either as a shield or as a weapon. In the financial world, one has to be alert and cautious otherwise he has to blame himself for the outcome. His grievance about not being able to file written submissions is also not worth taking cognizance. Written submissions are not mandatory. They are not the pleadings which envisage only a plaint, reply and rejoinder, if required. If the defendant is not allowed to file....
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....king diametrically opposite views in two contemporaneous arbitral proceedings cannot be countenanced. Proceedings under Section 34 not being appellate proceedings, this Court cannot delve into a re- appreciation of evidence to substitute the view of the arbitrator with its view. It is trite law that the parameters of review are narrow. One of the prime factors to consider when assessing a challenge to an arbitral award is whether any reasonable man could have come to the view taken by the arbitral tribunal. There is no prospect for holding that a reasonable arbitrator could have taken two diametrically opposite views on the same fact pattern within a span of two weeks. 20. I have also given my consideration to whether the arbitral award at the BSE could be considered without regard to the problematic situation that has been posed by the awards passed at the NSE and MCX. I am afraid all the arbitral awards that are subjected to challenge in the captioned proceedings would need to be quashed and set aside. The proceedings at the BSE present another complexity. The chartered accountant who filed Arjav's tax returns (the husband of the authorised ....
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....n the NSE form an integral element of the account of Arjav in Sharekhan's books. I have dealt with above, with the perversity in the interpretation of the trades on the NSE. If those trades on the NSE were to be held as being validly executed, the sale of the bonds on the BSE would get justified, with the two counterparties being the same - Arjav and Sharekhan. If such trades on the NSE were to be held as being unauthorised, there could be consequences for whether the sale of the bonds on the BSE was justified. More importantly, the arbitral tribunal of the first instance at the BSE has noticed that the bonds were sold on May 16, 2013 and sms alerts of the same had indeed been sent to Arjav. 23. More importantly, the arbitral award of the first instance at the BSE records that the chartered accountant had strongly refuted the allegations against him - that he had carried out trades on Arjav's behalf without authorisation. However, the very same person who refuted the allegation of trading without authorisation confirmed in appeal that the trades were indeed executed by him and without authorisation. At the least, the appellate arbitral tribunal ought to have dealt with this chan....
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....utes and differences between the parties covered by this Application; Office Add- 617, Raheja Chambers, Nariman Point, Mumbai. Email id - [email protected] B] A copy of this Order will be communicated to the Learned Sole Arbitrator by the Advocates for the Petitioner within a period of one week from the date on which this order is uploaded on the website of this Court. The Petitioner shall provide the contact and communication particulars of the parties to the Arbitral Tribunal along with a copy of this Order; C] The Learned Sole Arbitrator is requested to forward the statutory Statement of Disclosure under Section 11(8) read with Section 12(1) of the Act to the parties within a period of two weeks from receipt of a copy of this Order; D] The parties shall appear before the Learned Sole Arbitrator on such date and at such place as indicated, to obtain appropriate directions with regard to conduct of the arbitration including fixing a schedule for pleadings, examination of witnesses, if any, schedule of hearings etc. At such meeting, the parties shall provide a valid and functional email address along with mobile and landline numbers....