I have a dispute with my stock broker in New Delhi regarding unauthorised trades; how do I approach the stock exchange arbitration mechanism?

Detailed Legal Analysis

To resolve a dispute with your stock broker regarding unauthorized trades in New Delhi, you can approach the stock exchange's arbitration mechanism, which is an efficient way to settle such disputes without going to court.

Below are the steps you should follow to initiate the arbitration process:

• Review Your Agreement: Begin by reviewing the client-broker agreement you signed, as it typically contains specific clauses regarding dispute resolution, including arbitration.
• Contact the Stock Broker: Before initiating arbitration, it's advisable to contact your stock broker and try to resolve the issue amicably.
• File a Complaint with the Stock Exchange: If the issue remains unresolved, file a formal complaint with the stock exchange where your broker is registered. This can often be done online through the exchange's website.
• Submission of Arbitration Request: Submit a request for arbitration to the stock exchange. You will need to fill out an arbitration application form, which can usually be obtained from the exchange's website or office. Include necessary details such as:
• Your contact information and account details.
• A detailed description of the dispute, including dates, unauthorized trades, and any relevant evidence.
• Payment of Fees: Pay the requisite arbitration fees, which varies depending on the nature of the dispute. Ensure that you keep a receipt of the payment.
• Appointment of Arbitrator: Once your application is accepted, the stock exchange will appoint an arbitrator. You may be allowed to suggest an arbitrator, but the final decision lies with the exchange.
• Arbitration Hearing: Attend the arbitration hearing where both parties can present their evidence and arguments. The arbitrator will consider all submissions before making a decision.
• Receive the Award: After the hearing, the arbitrator will issue an ‘award’ which is binding on both parties. You will receive a copy of the award.
• Enforcement of Award: If you are not satisfied with the award, you can appeal under Section 34 of the Arbitration and Conciliation Act, 1996, but this is limited to specific grounds.

It is crucial to note that the securities market in India is regulated by the Securities and Exchange Board of India (SEBI), which mandates that all stock exchanges have an arbitration mechanism in place, as outlined in SEBI's circulars and the relevant provisions of the Securities Contracts (Regulation) Act, 1956.

By following these steps, you can effectively navigate the arbitration process to resolve your dispute with your stock broker.