Legal Question in Securities Law in India

Re: Arbitration Case against Stock Broker

Enforce it by execution - every body will have to honour the award.

Re: Arbitration Case against Stock Broker

In whole your query no date of event is mentioned . We are replying your query assuming that arbitration proceeding were initiated after 1996 and the new arbitration act would apply.

Arbitration in India are governed by the Arbitration and Conciliation Act, 1996 and the award passed by the Arbitrator beocomes the decree after a statutory period provided under Section 34 of the Arbitration & Conciliation Act.

Form the limited information provided by you we assume that the objections were filed after the passing of Award.

However as long as objection were pending decision, execution of award might have stayed by the execution court/superior court.

Q. no. 1. Is the NSE legally bound to honour the award in case I withdraw my execution suit from the local civil court?

Answer. How the award will be binding on the NSE depends on the language of the award itself. And in case you have any claim against the NSE as decided by the Arbitrator are binding on the NSE. In case NSE is willing to settle the issue, the same can do so before the Court also.

2. The stock broker has asked me to settle the case at a value lower than the arbitration award. I am not sure but I think, as per SEBI rules, a stock broker cannot compromise on award and settle at lower amount than awarded. Please advise on the legality of this issue.

Answer: You can settle the amount with stock broker and may absolve him form future liability, in case you are satisfied.

3. The arbitration award mentions rate of interest as 15% per annum. Is it simple interest or compound interest?

Ans: In award itself it would have been written that, whether the interest is simple or compounded. However in case of confusion, an application may be moved before the Arbitrator seeking clarification.

Hope all your queries are satisfied.

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