Bombay High Court Upholds Trader’s ₹1.75 Crore Profit Earned Due To Kotak Securities Margin Glitch

The Bombay High Court upheld an arbitral award allowing a trader to retain ₹1.75 crore earned through trades executed using erroneous margin credit caused by a technical glitch in Kotak Securities’ system.

Dismissing the broker’s challenge under Section 34 of the Arbitration and Conciliation Act, 1996, the Court held that a broker cannot benefit from its own mistake or deny profits earned through a trader’s skill and risk.

The Court observed that the margin glitch only provided an opportunity to trade and that the trader bore the risk of loss.

It also noted lapses in Kotak’s risk management and upheld the arbitral tribunal’s directions.

[Kotak Securities Ltd v. Gajanan Ramdas Rajguru]