What is Arbitration?
Arbitration is an alternative dispute resolution mechanism provided by the Exchange for resolving disputes between the trading members and between trading members & constituents (i.e. clients of trading members), in respect of trades done on the Exchange. This process of resolving a dispute is comparatively faster than other means of redressal.
Who are the persons who can act as Arbitrators?
The Exchange provides a list of eligible persons approved by SEBI for each of the Regional Arbitration centres. Persons who form part of the list of Arbitrators are the ones who possess an expertise in their respective fields including banking, finance, legal (judges) and capital market areas (brokers).
Who can avail the facility of arbitration on the Exchange?
The facility of arbitration on the Exchange can be availed by:
What is the period for filing an application for arbitration in the event of there being a claim, difference or dispute?
An application for arbitration has to be filed within 6 months from the date of dispute.
What is the format for filing an application for arbitration by a constituent/trading member against the trading member/constituent?
Where are the arbitration cases conducted by the Exchange?
At present, arbitration is conducted by the Exchange at Mumbai, Delhi, Calcutta and Chennai. They are referred to as Regional Arbitration Centers (RAC)s. The states covered by each RAC are as follows:
Seats of Arbitration - REGIONAL ARBITRATION CENTRES States covered by the RAC
Are there any criteria for filing the application at any particular Regional Arbitration Centre(RAC) ?
The criteria for filing an application at a RAC are Parties To Dispute Place of filing the application for Arbitration Place of hearing
TM* v/s TM*
What is the amount of deposits to be given to the Exchange by a trading member for filing an application for arbitration?
Based on the claim amount, the trading member is required to furnish deposit to the Exchange whether they are an applicant or a respondent.
Besides the above-mentioned deposits, the Exchange may call for additional deposits if in its opinion the deposits made are insufficient to cover the expenses of arbitration. The additional deposits will form a part of the deposits and shall be dealt with accordingly.
Who has dealt on the Exchange through its trading member give a deposit to the Exchange for filing an application for arbitration?
In case an investor (constituent of the trading member) is an applicant or respondent then he/she is required to furnish deposit to the Exchange based on the claim amount as under:
* Upto a claim of Rs 5 lakhs, the expenses for arbitration are borne by the Exchange on behalf of the constituent.
Besides the above-mentioned deposits, the Exchange may call for additional deposits if the deposits made are insufficient to cover the expenses of arbitration. The additional deposits will form a part of the deposits and shall be dealt with accordingly.
What are the other fees, charges, costs to be borne by the parties to the dispute?
All fees and charges relating to the appointment of the arbitrator and conduct of arbitration proceedings shall be borne by the parties to the reference equally or in such proportions as may be decided by the Arbitrator. Such fees/charges are recovered from the deposits made while filing the arbitration application & balance amount, if any, is refunded to the parties. The costs, if any, to be awarded to either of the parties in addition to the fees and charges that have to be borne by the parties for conducting the arbitration, shall be decided by the Arbitrator. Unless the arbitrator directs otherwise, each party shall bear their own expenses of travelling and other incidental expenses incurred.
How is an Arbitrator appointed?
Can one request for a hearing in case the claim difference or dispute is a small amount?
No hearing is afforded to the parties to the dispute if the value of the claim difference or dispute is Rs.25,000 or less. However, if the value of claim, difference or dispute is more than Rs.25,000, the arbitrator shall offer to hear the parties to the dispute unless both parties waive their rights for such hearing in writing.
Can the Sole Arbitrator or Panel of Arbitrators grant an adjournment of hearing?
Yes, if either of the parties want an adjournment of hearing, they should make an application in writing to the Exchange giving reasons for seeking adjournment to the Exchange in advance to enable the Exchange to forward such request to the arbitrator. The arbitrator at his/her discretion may grant the adjournment subject to such conditions as deemed fit by him/her.
How is an award made by the Sole Arbitrator/Panel of Arbitrators?
An Award shall be given in writing and made in three originals duly dated and signed by the Sole Arbitrator or in case of a Panel of Arbitrators by all the three arbitrators.
Can the parties to the dispute request for interest on the claim amount?
The arbitrator may include interest on the claim amount for which the award is made at a particular rate of interest and period as the arbitrator deems reasonable.
Is there any appeal provision for arbitration at the Exchange?
No, there is no appeal provision for arbitration at the Exchange. However, the aggrieved party can make an application to the appropriate court to set aside the award given by a Sole Arbitrator or Panel of Arbitrators, under the provisions of the Arbitration and Conciliation Act, 1996.
When does the Award become a decree?
The award becomes a decree when the time for making an application to set aside the award has expired i.e. after expiry of 3 months from the date of receipt of award or the application for setting aside the Award having been made, has been refused by the appropriate court. In such a case the award shall be enforced as if it were a decree of the Court under the provisions of the Arbitration and Conciliation Act 1996. Disclaimer: The information contained herein is subject to change without prior notice. While every effort is made to ensure accuracy and completeness of information contained, the Exchange makes no guarantee and assumes no liability for any errors or omissions of the information. No one can use the information for any claim, demand or cause of action. Please refer to relevant regulations and circulars in case of specific cases and problems.