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The Bombay and Delhi High Courts refused to provide any interim relief to brokers hit by negative pricing settlement of crude oil by MCX.
The Bombay High Court took up the petition filed by Motilal Oswal Financial Services and rejected any immediate relief.
Reacting to the development, a MOFSL official said the high court heard the writ petition filed regarding the settlement of crude oil contracts. After hearing the parties, the court has directed to list the petition in the first week of June, he said.
Meanwhile, hearing a petition in the Delhi High Court Justice C Hari Shankar refused to stay the operation of the circular on negative settlement pricing of crude oil futures issued by MCX on April 21.
Both SEBI and MCX, against whom the case was filed in Delhi, wanted the petition to be dismissed.
However, the court said the submissions are substantial.
“The court is not inclined to dismiss the present writ petition, but it needs to be answered, comprehensively, by the petitioner,” it said.
Negative settlement price
Last week, leading brokers and investors knocked the doors of high court against the decision of market regulator SEBI and MCX to settle April crude futures contract at minus ₹2,884 per barrel for the first time in history of commodity trading in India.
MCX, which initially announced a provisional settlement price of ₹1 for the crude oil futures contract, calculated a price of minus ₹2,884 per barrel, leading to investors losing about ₹435 crore.
Investors, who had paid the entire money for their trade in crude oil, had to incur an additional expense of 300 per cent over and above due to the negative pricing.
Brokers have contended that the settlement price of MCX derived from crude oil contract traded on Nymex are not comparable. While MCX contracts are cash settled, Nymex contracts are deliverable and hence negative pricing cannot be applied in India which does not have provision in law for negative pricing, brokers claimed.
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