Arbitration, Mediation and Conciliation · Arbitration under Investors' Grievances Redressal Mechanism of Stock Exchanges

Appeal, Review and Enforcement of Stock Exchange Awards

Updated 11 October 2026 · Fact-checked

A stock exchange arbitral award is first challenged through the exchange's own appellate arbitration, if its bye-laws and regulations provide it. After that, the award can be attacked in court only under section 34 of the Arbitration and Conciliation Act, 1996. Once the section 34 time has expired, or no stay is granted, it is enforced as a civil court decree under section 36.

Understand Appeal, Review and Enforcement of Stock Exchange Awards

When an investor and a broker fight over a trade, the dispute goes to arbitration under the rules of the stock exchange. The exchange's bye-laws, rules and regulations, together with SEBI circulars, set the procedure. The Arbitration and Conciliation Act, 1996 applies to the arbitration and to what happens after the award.

The exchange system usually offers a second look inside the system itself. This is appellate arbitration: a party unhappy with the first award appeals to a fresh panel of arbitrators appointed by the exchange. It is a re-hearing within the exchange mechanism. It is not a court proceeding. The exact appeal period, the fee or deposit, and the panel size are set by the exchange's regulations and SEBI circulars, so quote them only as given in your study material.

Court challenge is different. Under section 34, a court does not re-decide the dispute. It can set aside an award only on the listed grounds, such as incapacity, invalid agreement, no proper notice, award beyond the scope of submission, wrong tribunal composition or procedure, a dispute not arbitrable, or conflict with the public policy of India. Public policy is limited by the Act to fraud or corruption, violation of section 75 or 81, contravention of the fundamental policy of Indian law, or conflict with the most basic notions of morality or justice. Review on the merits is not allowed.

Enforcement comes last. Under section 36, once the time to apply under section 34 has expired, the award is enforced under the Code of Civil Procedure, 1908 as if it were a decree of the court. Filing a section 34 application does not by itself stop enforcement. The applicant must make a separate application for a stay, and the court may grant it on conditions, for reasons recorded in writing.

So the path is: first award, then appellate arbitration (if available and used), then section 34 application, then enforcement under section 36. In answers, keep these three stages apart. Many students blur them.

Key rules to remember

Time limit for setting aside (section 34(3)): Application within 3 months from receipt of the award + up to 30 days more if sufficient cause is shown; If a request for correction or interpretation was made under section 33, the three months run from its disposal. After the extra 30 days, the court cannot entertain the application. Jammu and Kashmir and Ladakh have six months and sixty days by local amendment.
Grounds under section 34(2)(a): Applicant must establish on the tribunal's record: incapacity; invalid agreement; no proper notice or unable to present case; award beyond submission; composition of the tribunal or procedure not in accordance with the parties' agreement (or, failing agreement, with Part I). A party-agreed composition or procedure is respected unless it conflicts with a provision of Part I from which the parties cannot derogate; The burden is on the applicant. Where matters can be separated, only the part dealing with matters not submitted may be set aside.
Grounds found by the court, section 34(2)(b): Dispute not arbitrable, or award in conflict with the public policy of India; Public policy is limited to fraud or corruption (or breach of section 75 or 81), fundamental policy of Indian law, or the most basic notions of morality or justice. No merits review.
Patent illegality, section 34(2A): Available for awards in arbitrations other than international commercial arbitrations; illegality must appear on the face of the award; An award is not set aside merely for erroneous application of law or reappreciation of evidence.
Prior notice and disposal, section 34(5) and (6): Prior notice to the other party + affidavit of compliance; disposal expeditiously and in any event within one year from the date the notice is served on the other party; The application must be disposed of expeditiously, and in any event within one year from the date the section 34(5) notice is served on the other party.
Enforcement and stay, section 36: Enforce as a decree after section 34 time expires; filing under section 34 gives no automatic stay; stay needs a separate application; For money awards the court has due regard to the CPC rules on stay of a money decree. A prima facie case of fraud or corruption in the agreement or the award means an unconditional stay pending the section 34 challenge.

How to solve Appeal, Review and Enforcement of Stock Exchange Awards questions

Use this order for any case question on challenging or enforcing a stock exchange award.

1Identify the stage: first award, appellate arbitration, court challenge or enforcement.
2Check whether the exchange's bye-laws and regulations give an appeal and whether the party used it within the time they allow.
3State the section 34 time limit and count from the date the party received the award, adjusting for any section 33 request.
4Match the facts to a specific ground in section 34(2) and say who must prove it.
5Test any public policy claim against the three limits in Explanation 1 and note that merits cannot be reviewed.
6Apply section 36: no automatic stay, need for a separate stay application, and the fraud or corruption proviso if relevant.
7Write a clear conclusion: whether the challenge succeeds, whether the award is enforceable, and what the party should do next.

Quickest way: Stage, clock, ground, stay

When to use it: Use it when time is short and the question asks whether a party can challenge or enforce an award.

Stage: name where the award stands.
Clock: three months plus thirty days.
Ground: pick the exact section 34 ground, or say none fits.
Stay: filing is not a stay; a separate application is needed.
Conclude in one line with the section numbers.

Common mistakes in Appeal, Review and Enforcement of Stock Exchange Awards

Treating appellate arbitration as a court appeal.
The word appeal suggests a court.
Fix: Say it is a second arbitration within the exchange mechanism, run by the exchange's panel under its regulations. Court challenge is only under section 34.
Saying the court can re-examine the merits under section 34.
Students think any wrong award can be set aside.
Fix: Quote Explanation 2: the fundamental policy test does not involve review on merits, and section 34(2A) bars setting aside for mere error of law or reappreciation of evidence.
Saying filing a section 34 application automatically stops enforcement.
Older law worked that way.
Fix: Under section 36(2), filing does not by itself make the award unenforceable. A separate stay application is needed.
Counting the three months from the date of the award.
The date of the award is easy to remember.
Fix: Count from the date the applicant received the award, or from disposal of a section 33 request.
Extending the limitation beyond thirty days.
Students assume courts can always condone delay.
Fix: The court can allow only a further thirty days for sufficient cause, and not thereafter.

Worked examples

Example 1

Mr Rao, an investor, wins an arbitral award against his broker, Sharma Securities Ltd. The award was made by a panel of the exchange, and Sharma Securities receives it on 10 March. Sharma Securities, the losing party, files a section 34 application on 25 July without any section 33 request, claiming the panel misread the contract. Advise whether the application can be entertained and what Mr Rao, the award-holder, can do.

Show the solution

Time: three months from receipt on 10 March ends on 10 June.
Extension: the court can condone delay only up to thirty days more, that is until 10 July, and only for sufficient cause.
Filing on 25 July is after 10 July, so it is beyond even the extended period.
Ground: this is a domestic arbitration, so patent illegality under section 34(2A) is available. But a claim that the panel misread the contract is at most an erroneous application of law or a reappreciation of evidence. The proviso to section 34(2A) says an award shall not be set aside merely on that ground. The claim does not show patent illegality appearing on the face of the award, and no other section 34(2) ground fits. The court also does not review the merits.
Enforcement: the time to apply has expired, so under section 36(1) the award can be enforced as a decree.

Answer: Sharma Securities' application is time-barred and also discloses no valid ground. A mere misreading of the contract is not enough under section 34(2A), and no patent illegality on the face of the award is shown. The court cannot entertain the application. Mr Rao, the award-holder, can enforce the award against Sharma Securities as a decree under section 36.

Example 2

An award for ₹8,00,000 is made against Kiran Traders by a stock exchange arbitral panel. Kiran files a section 34 application within time. The investor starts execution. Kiran says execution must stop because the application is pending. Is Kiran right?

Show the solution

Rule: under section 36(2), filing a section 34 application does not by itself render the award unenforceable.
Stay needs a separate application under section 36(3), and the court may grant it on conditions, for reasons recorded in writing.
Because it is a money award, the court has due regard to the CPC rules on stay of a money decree.
Exception: if Kiran shows a prima facie case that the arbitration agreement or the making of the award was induced or effected by fraud or corruption, the court must stay the award unconditionally pending the challenge.
No such fraud is alleged in the facts.

Answer: Kiran is not right. Execution can continue unless the court grants a stay on a separate application. A stay would normally carry conditions, such as a deposit, since the award is for money.

Exam tips

Write the sequence of remedies at the start: appellate arbitration, then section 34, then section 36.
Quote section numbers and the time limits exactly; these are the easy marks.
For appellate arbitration details such as periods and fees, rely on the exchange regulations and SEBI circulars in your study material and do not guess numbers.
In case questions, state the provision, apply the facts, then conclude. Do not stop at the rule.
Always mention that public policy is a narrow ground and merits are not reviewed.

Practice questions from Arbitration under Investors' Grievances Redressal Mechanism of Stock Exchanges

Appeal, Review and Enforcement of Stock Exchange Awards: frequently asked questions

What is appellate arbitration in a stock exchange?

It is a second arbitration within the exchange system. A party unhappy with the first award can appeal to a new panel under the exchange's regulations. It is not a court proceeding.

How can I challenge an arbitral award of NSE or BSE in court?

File an application to set aside under section 34 of the Arbitration and Conciliation Act, 1996, within three months of receiving the award, plus up to thirty days if sufficient cause is shown. You must give the other party prior notice and file an affidavit.

How is a stock exchange award enforced?

After the section 34 time has expired, it is enforced under the Code of Civil Procedure, 1908 as if it were a court decree, as per section 36. A pending section 34 application does not stop enforcement unless the court grants a stay.

What is the difference between arbitration and appellate arbitration at a stock exchange?

Arbitration is the first hearing of the dispute by the exchange's panel. Appellate arbitration is a later hearing of the same dispute by a different panel, when a party is dissatisfied with the first award. Both are under the exchange's rules, and court challenge comes after.