Religare, other brokers follow Motilal Oswal, sue MCX over crude oil issue

Cases filed in high courts of plaintiffs' jurisdiction, exchange files caveat pledging opportunity for hearing

A day after three top brokers moved court against the MCX settling the price of the April oil contract in negative, several others, including Kunvarji Commodities, follow suit on Thursday.  The contract was settled on Tuesday.

The Securities and Exchange Board of India (Sebi) and the MCX Clearing Corporation have been made respondents to these cases.

The MCX, on the other hand, has filed a caveat in the Bombay High Court, pledging not to pass an ex-parte order without giving a proper hearing.

The plea filed by Motilal Oswal, which had moved the Bombay High Court on Wednesday, was listed on Thursday, but the hearing could not take place. PCS Securities, too, had moved court on Wednesday. Religare Broking has filed a suit in the Delhi High Court, which has slated to hear it on April 29.
 

Kunvarji Commodities moved the Gujarat High Court on Thursday.

“The MCX as an exchange doesn’t have a zero or negative pricing system on its platform. Among international markets, too, there is just one platform which has the negative pricing system, that too for the physical delivery contract. Contracts on the MCX are cash-settled,” said Nitin Aggarwal, chief executive officer, Religare Broking.

Atul Choksi, director, Kunvarji Commodities, said: “Our defence is that the MCX should have advised its members and clients about the possibility of the crude oil price to turn into negative, but the exchange failed to do.”

An MCX official declined to comment saying “the matter is subjudice”.