The Bombay High Court barred Singapore Exchange Ltd. from launching its new derivatives mirroring the National Stock Exchange Ltd.’s indices till the Indian bourse’s plea challenging the contracts is decided by an arbitrator.
The court appointed Justice SJ Vazifdar (retired Chief Justice of Punjab and Haryana High Court) as the arbitrator to hear their arguments from June 12-16, according to an order uploaded on the high court’s website. Both parties will meet the arbitrator at 6 p.m. today for further directions, the court said.
SGX, which has to file its reply to the order by May 31, said it will challenge the interim injunction. The court directed the NSE to respond to SGX’s reply by June 9. Both parties can challenge the court’s order in the arbitral tribunal.
The NSE had challenged the Singapore exchange’s move to offer new contracts from June 4 based on publicly available settlement price after the Indian bourse terminated its licensing agreement with it. That followed a decision by Indian stock exchanges to stop sharing data with overseas peers to prevent volumes from shifting offshore and promote the international trading hub in Gujarat. Index and stock-linked derivatives are used by foreign investors to hedge their exposure to the Indian market.
The Singapore bourse had on April 11 announced the launch of new derivatives to replace the earlier Nifty contracts. The high court order extends the ad-interim injunction on these contracts till June 16.
The court asked SGX to issue a press release stating that it will withhold the launch of the new contracts till the case is decided by the arbitrator. In case the exchange wishes to launch fresh products, other than the ones disputed, it will have to issue a seven-day notice to the NSE.