The dispute between the Mumbai-based Multi Commodity Exchange (MCX) and London-based software developer PESB has now reached an arbitration court in Singapore. The MCX has paid nearly ₹19 crore to PESB since 2018 for the development of software with regard to the trading platform of a new spot exchange, which is yet to be delivered completely.

In its recent regulatory filings, the MCX has said that it had “requested the vendor, for amicable resolution of dispute, to complete the project without any cost escalation and provide knowledge transfer to MCX team for the amount paid thus far.”

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Instead, the vendor filed for arbitration with Singapore International Arbitration Centre on January 15 for specific performance of the contract. Usually, it is those who have paid the money and are not satisfied with the job moves the court or arbitration but this is a rare case where the entity which owes money has gone for arbitration, a legal expert said.

Accountability?

MCX had also constituted a committee to conduct internal inquiries with regard to the selection of the vendor, signing of contract and payments made in London. But the exchange is yet to fix the accountability even though it is holding back variable and other pay of some of the former senior officials for their role in the matter, sources in the know told BusinessLine.

This software related probe is among the few pending matters where MCX has conducted internal investigations. The other matters include the purchase of a huge office in Gandhinagar based GIFT City. Investigations were also conducted by the exchange in data theft of a live market order book that was allegedly used for making algo trading software by private individuals. MCX said in its filings that it had incurred ₹18.80 crore on the project. “On account of non- fulfilment of the scope of the project within the timelines and disputes arising between the parties, the board constituted an empowered committee to evaluate the financial and technical aspects of the said system developed by the said vendors,” MCX said.

MCX currently traders in commodity futures and does not have a spot exchange platform.

SEBI had allowed exchanges to launch spot trading platforms in 2018 following which MCX moved to acquire a software. While the BSE launched its spot trading platform recently for trading in commodities, MCX is stuck due to the unavailability of the software, sources said.

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