The Bombay High Court today extended its interim stay on the launch of Nifty-based new derivative contracts by Singapore Exchange Ltd (SGX) till May 31.

A vacation Bench of Justice S J Kathawalla deferred the hearing on the dispute between the National Stock Exchange India (NSE) and the SGX after the parties sought time to make up their minds on the terms for sending the dispute to arbitration for resolution.

Earlier this week, Justice Kathawalla had passed an interim order restraining SGX from acting upon its circular issued on April 11 announcing the launch of derivative products. The Bench, at that time, had also suggested that the parties take the dispute before a court-appointed arbitrator.

While the NSE consented to the above, the matter could not be sent for arbitration as the lawyers for SGX sought time to take instructions on the terms of the stay on the circular until the dispute was heard and disposed of by the arbitrator.

The NSE had approached the High Court on Tuesday through senior lawyer Abhishek Manu Singhvi, seeking an injunction against SGX. Arguing that it had an intellectual property right over the Nifty benchmark, the NSE sought that SGX be restrained from going ahead with the launch scheduled for June 4.

In February, the three Indian stock exchanges -- the Bombay Stock Exchange (BSE), the NSE and the Metropolitan Stock Exchange -- had taken a joint decision to stop trading of derivative contracts based on Indian indices on overseas bourses.

However, on April 11, the SGX announced new India equity derivative products that will be based on the settlement prices of Nifty Futures contracts.

Derivatives are contracts between two or more parties whose value or prices are determined by the fluctuations of underlying financial assets such as securities, bonds, currencies, stocks or market indexes.