Application under Sec.34 of the Arbitration and
Conciliation Act 1996 for setting aside the award passed
by the Learned Sole Arbitrator dated 07.11.2024 in
Arbitration Case No.NSE-SB-2024-07388926.
Parties are referred as per their rank before
the Arbitral Tribunal.
2. Facts in brief is as under:-
The claimant is an individual investor. The
respondent is stockbroker under ICICI Securities
Limited. The respondent offers online trading platform
to its clients through mobile application ICICI Direct
and website www.icicidirect.com. The clients of the
respondent uses its service for the purpose of trading in
the securities market particularly in Future and Options
(F&O) segment. From 11.04.2018 the claimant has
been availing the services of the respondent and has
executed an online e-KYC account opening form as per
rules, regulations, circulars, guidelines, directives and
byelaws prescribed by SEBI and National Stock
Exchange(NSE). From 23.12.2019 and onwards the
claimant has been trading under the F&O Segment. The
claimant being a regular investor in the F&O Segment
through website and App provided by the respondent.
The claimant was required to maintain sufficient margin
during trading under the F&O Segment. In case of
margin shortfalls the respondent was entitled to square
off the claimants positions to mitigate risk of losses.
The claimant had also signed mandatory risk disclosure
documents, investor rights and obligation documents as
a part of account opening form for dealing in capital
market and F&O Segments. The respondent also
provides a robust risk policy to mitigate market
volatility and obligations towards exchanges in terms of
funds and securities as per the SEBI directives. It is
further submitted that on 04.06.2024 on account of Lok
Sabha elections there was high market fluctuations. As
per the terms and conditions of the contract the
claimant was required to maintain sufficient margin at
all times to mitigate losses. The margin and market to
margin(MTM) requirements varies every minute as per
market fluctuations. On 04.06.2024 at about 12.07pm
the claimant total available margin was Rs.35,70,150/-.
The respondent did not take any steps to square off the
claimant position as the margin market requirement
had been fulfilled. At about 12:27 pm the total margin
required to be maintained by the claimant was
Rs.53,13,814/-. As the margin maintained by the
claimant was Rs.35,70,150/- between 12:21 p.m. and
12:31 p.m. on 04.06.2024 there was a margin shortfall
of Rs.17,43,663/- in the account of the claimant due to
which by way of system operation of the respondent,
the claimant position was squared off. This has been
done as per the risk mitigation measure contained in
the system. It is submitted that as per the terms and
conditions the respondent has a right to square off the
claimant position in case of margin shortfall.