High Court of Bombay Considers Appeal in Securities Broker-Client Trading Dispute Under Section 37 of Arbitration and Conciliation Act, 1996. Single Judge's Decision Setting Aside Majority Award and Confirming Dissenting Award Challenged by Investor Client.

Arbitration appeal under Section 37 of the Arbitration and Conciliation Act, 1996 challenging a Single Judge's order that set aside a majority arbitral award and confirmed a dissenting award in a dispute between an investor and a stock broker over unauthorised trading losses.

The appellant (investor) sought to set aside the judgment and order dated 30 April 2024 of the learned Single Judge, thereby restoring the majority arbitral award dated 8 August 2017 which granted a higher claim amount, and dismissing the respondent's Section 34 petition.

The appellant was aggrieved by the Single Judge's decision which re-appreciated evidence and set aside the majority award, allegedly exceeding the scope of Section 34 of the Arbitration Act.

IGRP order dated 9 January 2017 granted Rs.46,60,000 to the appellant; Arbitral Tribunal award dated 10 April 2017 reduced claim to Rs.35,77,412 with 12% interest; Appellate Panel majority award dated 8 August 2017 upheld the arbitral award but increased claim to Rs.46,60,000; dissenting award dated 14 August 2017 set aside IGRP order and arbitral award; Single Judge's judgment dated 30 April 2024 allowed Arbitration Petition No.742/2017, dismissed Arbitration Petition No.228/2018, set aside majority award, and confirmed dissenting award.

Whether the learned Single Judge exceeded the scope of Section 34 of the Arbitration and Conciliation Act, 1996 by re-appreciating evidence and merits of the arbitral award. Whether NSE regulations mandatorily required pre-trade confirmations for the transactions in question. Whether the SEBI Circular of 26 September 2017 had any retrospective application to the arbitral awards passed before its issuance. Whether the findings of the Appellate Arbitral Tribunal, including the majority and dissenting awards, were liable to be interfered with by the Single Judge. Whether the Single Judge erred in considering a private profit-sharing arrangement not raised during arbitration proceedings.

The learned Single Judge grossly erred in travelling beyond the scope of Section 34 of the Act while setting aside the majority award and entered into re-appreciation of evidence. The Arbitral Tribunal had considered post-trade confirmations but found them unpersuasive because NSE Regulations require pre-trade confirmations. The Appellate Tribunal was not required to undertake a fresh enquiry or record fresh reasons for upholding the Arbitral Tribunal's order. The SEBI Circular of 26 September 2017 was issued after the Arbitral Tribunal award and the Appellate Tribunal award, so it could not have been considered by them. NSE instructions require pre-trade confirmations and the SEBI Circular has no relevance; contract cannot supersede regulations and bye-laws. Mere awareness of transactions on the part of the appellant is irrelevant because pre-trade authorisations are mandatory. The Single Judge erred by considering an argument of private profit sharing arrangement between the appellant and a third party, which was never raised in arbitration. The two technical members of the arbitral tribunal, who were aware of the nature of transactions, ruled in favour of the appellant; arbitral tribunals can use technical or expert knowledge.

The ratio decidendi cannot be determined from the provided text because the court's final analysis and holding are not included; only the appellant's arguments and procedural history are available.

This is an Appeal filed under Section 37 of the Arbitration and Conciliation Act, 1996 challenging the judgment and order dated 30 April 2024 passed by the learned Single Judge of this Court allowing Arbitration Petition No. 742 of 2017 filed by the Respondent and dismissing Arbitration Petition No. 228 of 2018 filed by the Appellant. The Learned Single Judge has set aside Majority Award dated 8 August 2017 and has upheld the dissenting Award dated 14 August 2017. Mr. Rajasekhar, the learned counsel appearing for the Appellant would submit that the learned Single Judge has grossly erred in travelling beyond the scope of Section 34 of the Act while setting aside the majority Award. That the Learned Single Judge has entered into the realm of re-appreciation of evidence under Section 34 of the Act.

The investor filed a complaint with the Investors Grievance Redressal Panel (IGRP) of NSE on 29 June 2016. IGRP passed order on 9 January 2017 granting Rs.46,60,000 to the investor. The broker challenged this before the NSC; the Arbitral Tribunal passed award on 10 April 2017 reducing the claim to Rs.35,77,412 with 12% interest. Both parties appealed to the Appellate Panel of Arbitrators. The majority members delivered an award on 8 August 2017 dismissing the broker's appeal and increasing the claim to Rs.46,60,000; the Presiding Arbitrator delivered a dissenting award on 14 August 2017 allowing the investor's appeal and setting aside the IGRP order and Arbitral Tribunal award. The broker filed Arbitration Petition No.742/2017 under Section 34; the investor filed Arbitration Petition No.228/2018. The learned Single Judge by judgment dated 30 April 2024 allowed the broker's petition, dismissed the investor's, set aside the majority award, and confirmed the dissenting award. The investor filed the present Arbitration Appeal No. 12 of 2025 under Section 37 before the High Court.

• Arbitration and Conciliation Act, 1996: Section 34, Section 37