Recognising the importance of technology in alternate dispute resolution mechanisms, the Securities and Exchange Board of India (‘SEBI’) has issued a Circular to establish an Online Dispute Resolution Portal (‘ODR Portal’) on July 31, 2023. The ODR Portal employs online conciliation and online arbitration for resolving disputes arising in the Indian securities market inter alia between investors / clients, listed companies, institutional or corporate clients, and any of the specified intermediaries / regulated entities in securities market.^[1] The ODR Portal is scheduled to commence registration of complaints / disputes from September 16, 2023. Any aggrieved party may raise their grievance first by filing a complaint directly with the concerned market participant (listed companies / specific intermediaries / regulated entities in the securities market). If the grievance is not redressed satisfactorily, the aggrieved party may initiate dispute resolution through the ODR Portal.

The ODR Portal prescribes a strict timeframe for resolution of disputes i.e. 21 days (subject to further extension of 10 days) for resolution of disputes through conciliation and 30 days through arbitration (subject to further extension of 30 days). The ODR Portal is proposed to be an inexpensive mechanism and shall charge a fee in the range of INR 3840 – INR 5400 (excluding taxes) for conciliation and INR 5400 – INR 1,35,000 (excluding taxes) for arbitration.

The circular expands the availability of the dispute resolution process to all market participants in a more convenient and affordable manner. The development appears to be a step in the right direction as it aims to resolve two critical factors in dispute resolution – time and cost.

[1] Such as AIFs – Fund managers, CIS – Collective Investment Management company, depository participants, investment advisors, InvITs – Investment Manager, Mutual Funds – AMCs, portfolio managers, registrars and share transfer agents, REITs – Managers, stock brokers.