Investor-broker have filed suit-countersuit in Bombay HC in oil future contract dispute
MUMBAI: Dhanera Diamond has taken Motilal Oswal Financial Services (MOFSL), Multi Commodity Exchange (MCXNSE), and it's clearing organization to the court mentioning Rs 56.11 crore with credit interest. While in countersuit MOFSL is claiming to assure about Rs 80.74 crore from the trading firm during the pendency of the dispute before an arbitrator.
Dhanera Diamond has contended in its appeal that the MCX doesn't permit negative trading for the said agreement and consequently, there is no uncertainty of settling those contracts in the negative worth and mentioning portion from Dhanera.
MCX's risk evaluation software (SPAN) likewise doesn't contemplate over exchanging of crude oil contracts at negative values," contended Dhanera Diamond in its plea, a copy of the same was inspected by ET, "This is apparent as even at the present time, for crude oil Futures contracts ending in May 2020”, MCX doesn't permit trading at negative qualities.
Countering this, MOFSL has moved toward the court against Dhanera Diamonds under Section 9 of the Arbitration and Conciliation Act. MOFSL looked for the court's mediation to assure the sum from the broker until the final order from the arbitration tribunal regarding settlement obligations for the trades in crude oil contracts that terminated on April 20.
On May 8, after hearing both sides, Justice RI Chagla posted the issue for an additional hearing on May 15.
Birendra Saraf, a senior counsel, who appeared for the MOFSL, contended that the stock exchange and its clearinghouse had given a circular on April 21 crediting negative due date rate (DDR) of Rs 2,884 and settled crude oil contracts exchanged on MCX on the NYMEX Crude Oil.
Since the costs of crude oil futures traded on NYMEX that was expected to lapse on April 21, 2020, falling into negative territory , the charge balance exceeded the edges obtained by the petitioner (MOFSL) as a representative from its client respondent no 1(Dhanera Diamond)," MOFSL contended in the court. While, Venkatesh Dhond, senior counsel, who showed up for the trader, contended that the brokerage house deliberately withheld certain documents in its arbitration petition.
“Respondents (Dhanera Diamonds) have filed a suit against the petitioner (MOFSL) with respect to this transaction and declaration of price and the suit had been served on the respondents on May 6," the counsel for Dhanera Diamond stated, including that it is just from there on and as a counter that the current mediation request was recorded.
Chandubhai Mehta, managing partner of law firm Dhruve Liladhar and Co is representing Dhanera Diamond in the case. While MOFSL is being represented by Ravichandra Hegde, partner of Parinam Law Associates.
When contacted, MCX officials declined to comment as the matter is sub judice.