Arbitration turns in to civil
Swapnil
(Querist) 10 October 2025
This query is : Resolved
I was filed arbitration case against trading member before exchange and honble Arbitrator passed award in my favour along with 18% interest. But as per rules exchange not consider notional loss such as mental and financial harrasment.
I was also issued legal notice before approch to arbitration process.
So what can I do to recover notional also along with pocket expenses
1. File arbitration appeal at exchange
2. File arbitration appeal at court for notional loss
3. File civil suit as per my legal notice
Pls guide
T. Kalaiselvan, Advocate
(Expert) 11 October 2025
Under the Bye-laws of Stock Exchanges (and SEBI circulars), arbitration is confined to disputes “arising out of trades/transactions”.
So, the arbitrator cannot award damages for:
Mental agony
Reputation loss
Notional or exemplary compensation
These are considered “tort” damages, not “contractual” trading disputes.
You may file Appeal at Exchange (before Appellate Arbitration Panel), if you feel aggrieved considering that the arbitrator miscalculated the claim amount, or failed to consider evidence properly.
But the appellate arbitrator is also bound by the same exchange/SEBI rules,
so they too cannot grant notional loss or mental harassment compensation.
However you can approach Civil Court (under Section 34 of Arbitration Act or separate civil suit), but it may be an appeal only to set aside an award, not to add new compensation.
However, you can file a fresh civil suit claiming:
Mental agony / harassment damages
Litigation / pocket expenses
Deficiency in service.
Swapnil
(Querist) 11 October 2025
Thank you very much Sir no words for your valuable guidance
As Honble Arbitrator Sir (Retd district and sessions judge) passed award in my favour alongwith interest and fees while due to limitations for order of notional loss they are unable to pass such order. therefore I want to take appropriate legal steps due to actually I face huge harrasment due to bad intentions of trading memeber.
Now please suggest whether it's possible to accept award cost as it's order to realse with in 15 days and thereafter file civil suit for remaining amount i.e. Mental and financial harrasment.
Need your guidance 🙏
T. Kalaiselvan, Advocate
(Expert) 12 October 2025
It is legally possible and often strategically sensible to accept the awarded amount (including costs ordered in your favour in arbitration) and still file a separate civil suit for the remaining claims such as mental and financial harassment, provided that claims are distinct and not already adjudicated in arbitration and that did not include such a claim in your statement of claim before the arbitraton.
Dr. J C Vashista
(Expert) 12 October 2025
How much loss of mental agony and harashment do you feel / quantify, which should have been considered but ignored by Ld. Arbitrator ?
It is better/advised to accept the award gracefully without opening another legal pandora in the case.
Swapnil
(Querist) 12 October 2025
Thank you all experts
Actually notional loss for harrasment is beyond the jurisdiction of sebi arbitrator and same is clearly mentioned in award.
While if I choose to file civil suit then it's time consuming to get back own funds. As I need my funds urgently therefore only I need to accept this amount but
how to inform sebi for accepting award or file appeal. As sebi requires my stand within 7 days if appeal filed u/s 34
Pls suggest
T. Kalaiselvan, Advocate
(Expert) 13 October 2025
You have been made aware of the proceedings and you have already approached the appellate authority., hence you may follow the same route
Swapnil
(Querist) 13 October 2025
Means there's no need to inform sebi as file appeal u/s 34.
Ane after receive award copy thereafter I'm eligible to file civil suit as per my legal notice ?
T. Kalaiselvan, Advocate
(Expert) 14 October 2025
You can decide about approaching the civil court for further claim in this regard, first you obtain the award amount as ordered by SEBI.
Dr. J C Vashista
(Expert) 14 October 2025
It is advisable to accept the award dignifiedly.
