Tag Archives: arbitration

investor grievance redressal mechanism

SEBI circular dated 6th November, 2020 in respect of strengthened investor grievance and redressal mechanism for dealings at the stock exchange level and its stock exchange intermediaries i.e. between the clients and brokers etc.

  1. In order to further strengthen the Investor Grievance Redressal Mechanism, based on feedback received from market participants and Working Group constituted for the purpose, the following are issued as clarification to Circular No. CIR/MRD/DSA/24/2010 dated August
    11, 2010, Circular No. CIR/MRD/DSA/2/2011 dated February 09, 2011, and Circular No. CIR/MRD/ICC/30/2013 dated September 26, 2013.
  2. Resolution of complaints by Stock Exchange
    i.Timeline
    Stock Exchange shall ensure that the investor complaints shall be resolved within 15 working days from the date of receipt of the complaint. Additional information, if any, required from the complainant, shall be sought within 7 working days from the date of
    receipt of the complaint. The period of 15 working days shall be counted from the date of receipt of additional information sought. Stock Exchange shall maintain a record of all the complaints addressed/ redressed within 15 working days from the date of receipt of the complaint/additional information. If complaint is not resolved within stipulated time frame, then the reason for non redressal in given time
    frame shall also be recorded.
    ii. Service related complaints
    Stock Exchange shall resolve service related complaints at its end. However, in case the complainant is not satisfied with the resolution, the same may be referred to the Investor Grievance Redressal Committee (“IGRC”), after recording the reasons in writing by the Chief Regulatory Officer of the Stock Exchange or any other officer of the Stock Exchange
    authorized in this behalf by the Managing Director. Service related complaints shall include non-receipt/ delay of Account statement, non-receipt/ delay of bills, closure of account/ branch, technological issues, shifting/closure of branch without intimation, improper service by staff, freezing of account, alleged debit in trading account, contact person not available in Trading member’s office, demat account transferred without permission etc.
    iii. Complaints to be referred to IGRC
    For Complaints related to trade, settlement and ‘deficiency in services’, resulting into any financial loss, the stock exchange shall resolve the complaint on its own as per the time lines prescribed. However, if complaint is not resolved amicably, the same shall be referred to the IGRC, after recording the reasons in writing by the Chief Regulatory Officer of the Stock Exchange or any other officer of the Stock Exchange authorized in this behalf by the Managing Director. It shall be the responsibility of the Stock Exchange to provide documents/ necessary
    information after collecting the same from the member and/ or the complainant and provide necessary assistance to IGRC to ensure resolution of complaints in a timely manner.
  3. Handling of complaints by IGRC
    i. IGRC shall have a time of 15 working days to amicably resolve the investor complaint through conciliation process. If IGRC needs additional information, then IGRC may request the Stock Exchange to provide the same before the initiation of the conciliation process. In such case, where additional information is sought, the timeline for resolution of the
    complaint by IGRC shall not exceed 30 working days.
    ii. IGRC shall not dispose the complaint citing “Lack of Information and complexity of the case”. The IGRC shall give its recommendation to Stock Exchange.
    iii. IGRC shall decide claim value admissible to the complainant, upon conclusion of the proceedings of IGRC. In case claim is admissible to the complainant, Stock Exchanges shall block the admissible claim value from the deposit of the member as specified in this regard.
    iv. Expenses of IGRC shall be borne by the respective Stock Exchange and no fees shall be charged to the complainant/member.
    v. The Stock Exchange shall organize regular training program for IGRC members in consultation with National Institute of Securities Markets (“NISM”). The cost of such program shall be borne by Investor Service Fund (“ISF”) of the Stock Exchange.
  4. Arbitration
    For any dispute between the member and the client relating to or arising out of the transactions in Stock Exchange, which is of civil nature, the complainant/ member shall first refer the complaint to the IGRC and/ or to arbitration mechanism provided by the Stock Exchange before resorting to other remedies available under any other law. For the removal of doubts, it is clarified that the sole arbitrator or the panel of arbitrators, as the case may be, appointed under the Stock Exchange arbitration mechanism shall always be deemed to have the
    competence to rule on its jurisdiction. A complainant/member, who is not satisfied with the recommendation of the IGRC, shall avail
    the arbitration mechanism of the Stock Exchange for settlement of complaints within six months from the date of IGRC recommendation.
  5. The stock exchanges are advised to: –
    a) make necessary amendments to the relevant bye-laws, rules and regulations for the implementation of the above decision immediately;
    b) bring the provisions of this circular to the notice of the members of the stock exchange and also to disseminate the same through their website; and
    c) communicate to SEBI, the status of implementation of the provisions of this circular in the Monthly Development Reports to SEBI.

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Arbitration

Draft Arbitration Council of India (ACI) Rules issued for public consultation

Posted On: 12 FEB 2020 1:32PM by PIB Delhi

The Arbitration and Conciliation Act, 1996, was amended by the Arbitration and Conciliation (Amendment) Act, 2015 in order to make arbitration process user friendly, cost effective and ensure speedy disposal and neutrality of arbitrators. To give a boost to institutional, arbitration vis-a-vis ad hoc arbitration and to remove some practical difficulties in applicability of the Arbitration and Conciliation (Amendment) Act, 2015, the Government has recently amended the Arbitration and Conciliation Act, 1996 by the Arbitration and Conciliation (Amendment) Act 2019. Certain provisions of the Amendment Act have been enforced w.e.f 30.08.2019.

The Amendment Act inter-alia seeks to insert a new Part 1A to the Act of 1996 for the establishment and incorporation of an independent body namely, the Arbitration Council of India (ACI) for the purpose of grading of arbitral institutions and accreditation of arbitrators, etc.

As per section 43C of the Act, ACI will be will be headed by a Chairperson, who has been a Judge of the Supreme Court or a Chief Justice or Judge of a High Court or an eminent person, having special knowledge and experience in the conduct or administration of arbitration, to be appointed by the Central Government in consultation with the Chief Justice of India. Besides, it will also have two Full-time Members from amongst eminent arbitration practitioners and academicians. In addition, one representative of a recognized body of commerce and industry shall be nominated on rotational basis as a Part-time Member. The Secretary, Department of Legal Affairs, Ministry of Law & Justice; Secretary, Department of Expenditure, Ministry of Finance and Chief Executive Officer, ACI will be ex-officio Members.

Section 43M of the Act provides for the Secretariat to the Council consisting of such number of officers and employees as may be prescribed by the Central Government.

In this regard, the Department of Legal Affairs has prepared the following draft Rules:

 

  1. The Arbitration Council of India (the Salary, Allowances and other Terms and Conditions of Chairperson and Members) Rules, 2020.
  2. The Arbitration Council of India (the Travelling and other Allowances payable to Part-time Member) Rules, 2020.
  3. The Arbitration Council of India (the Qualifications, Appointment and other Terms and Conditions of the service of the Chief Executive Officer) Rules 2020.
  4. The Arbitration Council of India (the Number of Officers and Employees of the Secretariat of the Council and the qualifications, appointment and other terms and conditions of the officers and employees of the Council) Rules 2020.

 

The Government intends to consult all stakeholders in the process. A copy of the aforesaid draft Rules have been uploaded on the website of the department of Legal Affairs (http://legalaffairs.gov.in/). Accordingly, DoLA has commenced public consultation on the draft rules with the timeline of submission of comments by 14th March, 2020.

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Arbitration Act – amendments

The Government has issued an ordinance to bring in amendments to the Arbitration and Reconciliation Act, 1996. While I am unable to get a hand on the copy of the ordinance, according to various news reports, these are the salient features of the amendments:

1) Special fast track courts to be set up to deal with arbitration cases and for speedy resolution of commercial disputes;

2) mandatory for a judge presiding over commercial disputes to settle cases within nine months;

3) Arbitrator will be free to seek an extension from the high court;

4) In case of further delays, the high court will be free to debar the arbitrator from taking up fresh cases for a certain period;

5) A cap has been placed on the fee of the arbitrator – he will be able to charge only a composite fee and not on billable hours basis;

6) Arbitrator will have to spell out whether he has a conflict of interest in the case before taking up the case;

In the absence of the copy of the ordinance, unable to give more details on the amendments.

The amendments are based upon the Law Commission recommendations, which are available in this link i.e.

Click to access Report246.pdf

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