The Bombay High Court has today ruled in favour of MCX Stock Exchange (MCX-SX), represented by J Sagar Associates (JSA) and Naik Naik & Co, against the Securities and Exchange Board of India’s (SEBI) decision to prevent MCX from trading in derivatives and other products.

JSA Mumbai partner Nitin Potdar acted for long-standing client MCX-SX and Naik managing partner Ameet Naik acted for MCX’s promoter Financial Technologies (India), while MCX promoter Multi Commodity Exchange (India) was represented by advocate Munir Merchant.

SEBI had passed an order on 23 September 2010 refusing permission to MCX to trade in interest rates, derivatives, equity, futures and options on equity, wholesale debt segments and all other segments that other stock exchanges, such as the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) were allowed to operate in. This followed the Bombay High Court in August 2010 having ordered SEBI to take a call on the issue.

Naik stated: “The petitioner challenged the Impugned Order on the ground that the same is without jurisdiction, contrary to the provisions of SCRA and SEBI Act and various regulations made thereunder and/or without jurisdiction and/or arbitrary and/or in violation of principles of natural justice and/or based on extraneous and irrelevant considerations and/or in ignorance of germane and relevant material and/or is otherwise required to be set aside by the Bombay High Court in exercise of its powers under Article 226 of the Constitution of India.

The judgment was in 14 parts, according to Naik, and it set aside SEBI’s order observing that the promoters of MCX were not “persons acting in concert” and that all buy-back arrangements by MCX’ promoters were legal.

SEBI has 30 days to reconsider MCX’s application.

Order to be uploaded shortly.