Delhi HC refuses to remain with MCX Circular holding Crude Oil futures contract

Delhi High Court declines to remain at negative value with MCX Circular Setting Due Date Of Crude Oil Futures Contract

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The High Court of Delhi published a notice of appeal to the April 21 Multi Commodity Exchange(MCX), Circular, which set the deadline for the Crude Oil futures deal, expiring on 20 April 2020 at a negative value of Rs 2,884 per barrel.

The order from Tuesday follows an order from the Supreme Court in July which stayed all the proceedings questioning the circular.

“In the meantime, the concerned Writ proceedings pertaining to the challenge to the MCXCCL’s Circular dated 21.04.2020, shall remain stayed. The exchange of pleadings in the Writ Petitions may be completed by all the parties.” The order of the high court of 24 July states.

The parties shall register their counter-affidavits and rejoin. According to every top court order the case will be undertaken.

India’s Stock and Exchange Board had submitted a transfer petition pursuant to Article 139A of the Constitution requesting attachment of different written proceedings pending before the Bombay High Court in different High Courts for comparable examination.

According to its appeal, Akshay Aluminum Alloys LLP claimed that it had been incensed by a circular of the Multi Commodity Exchange Clearing Corporation Limited (MCXCCL).

Crude oil futures agreement are resolved in cash on the market and there is no delivery-based system for such deals in India. Such contracts that be sold at the base price of Re1 or P1 (one country) at least in the case of an extraordinary occurrence.

The firm claimed that if prospective options were enabled to shift in a adverse direction, the conditions of the option contract and the subsequent pay-in/pay-out provision would need to be modified and properly informed.

“Assigning a negative value is irrational and illogical, and demonstrates utter disrespect for the basic values and foundations of the Indian settlement system.” The appeal retained.

Multi Commodity Exchange Clearing Corporation Limited (MCXCCL)  extraordinary settlement level has contributed to unfair, disproportionate and windfall gains being rendered accessible to one business member group.