SECURITIES AND EXCHANGE BOARD OF INDIA
SECONDARY MARKET DEPARTMENT
Mittal Court, A Wing, Gr. Floor,
224, Nariman Point, Mumbai 400 021
SMDRP/POLICY /CIR -22/99
July 09, 1999
The Executive Directors / Managing Directors, All Stock Exchanges
Sub : Implementation of Arbitration Awards.
It has been brought to our notice that the arbitration awards passed in favour of the clients / investors are not implemented and the Stock Exchanges are unable to take appropriate action in order to ensure the implementation of the award. The plea forwarded by the stock Exchanges in such cases is that the Arbitration and Conciliation Act, 1996 provides for 90 days for making an appeal to the court of law against the arbitration award. If no appeal is preferred within the period of 90 days, the arbitration award shall be enforced in the same manner as if it were a decree of the Court.
The issue was discussed in the meeting of IESG on 10.03.99 and accordingly, it is proposed that:
The Stock Exchange should on receipt of the arbitration award, debit the amount of the arbitration award from the security deposit or any other monies of the member (against whom an award has been passed) and keep the amount in a separate account. Thereafter, a confirmation may be obtained from the concerned member that he has not filed any appeal within the stipulated time under section 34 of the Arbitration and Conciliation Act and only then the payment may be made to the awardee. If an appeal is filed and the same is pending in a Court of law, the amount so kept in the separate account be paid to the awardee in accordance with the court orders.
At the time of debiting the amount, the Stock Exchange may if so desire inform him that the Exchange will not be liable for loss of interest, business etc., in case the award is modified by the Court. The Exchange may also indicate that if any amount of interest is still payable to the awardee e.g. from the date of debiting the member’s account till the date of payment of the award amount to the awardee, the same be recoverable from the concerned member and the Stock Exchange shall not be liable in this regard.
Stock Exchanges are advised to comply with the above immediately.
P. K. BINDLISH
Secondary Markets, Depository,
Research and Publication Department
Tel : 2843631 Fax No. 2845761