In the matter of disputes between the member and clients arising from transactions executed between the parties, the law of limitation provides a time limit of three years to file the claims as per procedure. However, the exchanges have framed the bye laws as per power conferred on them under the Security Contract Regulation Act, 1956 and Forward Contract Regulation Act, 1952. The time limit for reference to the arbitration was initially fixed at 6 months and subsequently extended to 1 year and finally to three years. It is pertinent to mention that these limits has been provided for reference to arbitration and has been specifically mentioned to be invalid for the purpose of civil court. Thus, an applicant has a right to approach the civil court, if he was not able to file the claim within six months or one year and can file his claim during the remaining span making the total limitation period of three years. The problem however arises in the cases where the applicant has crossed the limitation period of one year but subsequently the limitation was extended to three years and his claim fell within the limitation period otherwise. For ex; the dispute of a person arose on 01/01/2010 and the limitation period from reference to arbitration was one year. The applicant filed the claim in 2012 when the limitation period was extended to three years on 01/01/12. Now, the claim is time barred in 2011 as far as the arbitration is concerned but valid for civil courts and subsequently, it becomes maintainable in arbitration also in view of the amendment.

The issue which need to be decided whether various circulars issued by the exchanges extending the time for reference to arbitration from six months to one year and subsequently to three years has a retrospective or prospective effect.

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