MUMBAI: The Multi-Commodity Exchange of India Ltd (MCX) settling its April crude oil contracts at minus ₹2,884 a barrel, following the historic crash in prices in the US, has resulted into at least five court cases across three jurisdictions in India.
The Bombay High Court is hearing three cases, including an arbitration plea, while the Rajasthan High Court and Delhi High Court have one each.
These court cases will not just settle obligations but also set new precedence on contract law. The MCX, which controls at least 94% of commodity market trading, settles its crude oil contracts against global benchmark and mirrors New York Mercantile Exchange (Nymex) contracts. Contracts on the MCX are settled in cash on a monthly basis. Final settlement price of such contracts is pegged to that of Nymex futures as reflected in rupee value on expiry date.
