The Securities Exchange Board of India (SEBI) has released a Consultation Paper on “Strengthening the Investor Grievance Redressal Mechanism in the Indian Securities Market by harnessing Online Dispute Resolution mechanisms.” This paper aims to improve the current process of resolving disputes and complaints in the Indian share market.
Currently, investors have three options for raising an issue or complaint: directly with the intermediary, through the SCORES portal, or through a three-step Market Infrastructure Institutions (MII) process. The MII process includes mediation, conciliation, and arbitration.
The Online Dispute Resolution (ODR) mechanism proposed by SEBI would use technology and platforms to create an end-to-end online experience for the mediation, conciliation, or arbitration process. This would help parties to the dispute schedule appointments, keep track of case status, and appoint arbitrators or mediators.
- Hybrid Approach to ODR: A mix of online and offline modes to address concerns of low digital literacy, low-speed internet, and the digital divide.
- IGRC to be relabelled as a panel of mediators: The IGRC currently mediates disputes, SEBI proposes to relabel it as a panel of mediators and arbitrators. Sole Arbitrator or a Panel of Arbitrators: Irrespective of the amount claimed, SEBI proposes to have a sole arbitrator.
- Appellate Arbitration: Under the current system, arbitration operates on two stages: arbitration and appellate arbitration. Removing the appellate arbitration to save costs as an appeal against arbitral awards in court currently exists.
The proposed measures in the Consultation Paper are aimed at improving the process of resolving disputes and complaints in the Indian share market. The introduction of an ODR mechanism would help to provide a faster and timelier resolution process. SEBI is currently soliciting feedback on these proposals.