T.S.Sivagnanam, J. - (1.)This Original Petition has been filed under Section 34 of the Arbitration and Conciliation Act, 1996, (Act) to set aside the award passed by the Sole Arbitrator, dated 12.03.2009, in and by which the petitioner's claim for payment of Rs.6,00,000/- by the first respondent was rejected.
(2.)The facts that are necessary for the disposal of this petition are as hereunder:-
The petitioner enrolled himself as an online trading member of the ICICI Securities since March, 2003. On 16.01.2008, he bought 900 Futures Nifty-27 March 2008 at Rs.5,930/- and on 18.01.2008, he bought 100 Futures Nifty-27 March 2008 at Rs.5,740/-. Thus the Nifty bought was 1000 at an average price of Rs.5,911/-. The petitioner states that the total margin allotted at specified 12% requirement was Rs.7,09,320/-. On 29.01.2008, the stock market crashed with Nifty touching a low of 4950 and closing at 5195.9 leading to erosion on margins allotted.

(3.)The petitioner by refering to the Rules, which were in existence at the relevant point of time pertaining to National Securities would submit that the ISEC should have demanded additional margin from the client, which he did not do. By refering to the general terms and conditions governing the web based transactions, the ICICIDIRECT.COM-ISEC claims to have an Auto Square off mechanism that would square off open positions, to generate the required margin, when the allotted margin gets eroded. This mechanism failed on 21.01.2008, when the allotted margins were eroded. On 22.01.2008, there was a further crash in Nifty, which resulted in further erosion of margins and at that point Nifty was squared off by ISEC resulting in a loss of Rs.14,14,953/-, which is Rs.8,48,953/- more than the losses that the petitioner would have suffered, if the Nifty was squared of at 5345, when ISEC has claimed that it try to square off as margins were eroded.