IIAC Releases Regulations For Conduct of Arbitration Involving Micro and Small Enterprises

The India International Arbitration Centre (IIAC) has notified the India International Arbitration Centre (Conduct of Micro and Small Enterprises Arbitration) Regulations 2024 ('The Regulations') on June 7, 2024 in the official gazette. These regulations recognise the necessity for expedited and more efficient dispute resolution for Micro and Small Enterprises, aligning with IIAC's initiative to enhance arbitration in this crucial segment of the Indian economy. It aims to streamline the arbitration process upon receiving a reference from the Micro and Small Enterprises Facilitation Council (“Facilitation Council”) under the Micro, Small, and Medium Enterprises Development Act, 2006 (“MSMED Act”). Key Highlights Application (Regulation 3)- When the Facilitation Council refers a dispute to the Centre under section 18(3) of the MSMED Act, 2006, the arbitration will be conducted and administered by the Centre according to the Arbitration Act and these regulations. Statement of Claim (Regulation 4)- Upon receiving a reference, the Registrar will notify the claimant to submit a statement of claim within 30 days, detailing the dispute and relief sought, either online, by email, or physically. This period can be extended by 15 days, and the claimant may later amend the claim if relevant. Statement of Defence and Counter Claim (Regulation 5)- The respondent must submit a statement of defence and any counter-claims within 30 days of receiving the claimant's statement, detailing their position and providing necessary information, either online, by email, or physically. This period can be extended by 15 days, and the Arbitral Tribunal may proceed if no defence is submitted; amendments to the pleadings are allowed if relevant. Disclosure on independence and impartiality of the arbitrators (Regulation 7)- An arbitrator must disclose any relationships or interests that might affect their impartiality or ability to commit time to the arbitration, and must continually disclose any such circumstances throughout the proceedings. Appointment of Arbitrator (Regulation 8)- The Chairperson appoints a sole arbitrator from the Centre's panel, ensuring independence, impartiality, and competence, while prohibiting any ex parte communication with the arbitrator after appointment. Fast Track Procedure (Regulation 11)- The fast-track procedure for arbitration involves resolving disputes based on written submissions, with oral hearings only if necessary, and aims to deliver an award within six months. If the award isn't made within this period or if a party requests, the procedure can revert to the standard arbitration process. Interim Measures By Arbitral Tribunal (Regulation 12)- During arbitration, a party can request interim protective measures from the Arbitral Tribunal, such as preserving property or securing disputed amounts, which the Tribunal can modify, suspend, or terminate if needed. Place or seat of arbitration (Regulation 17)- The arbitration's deemed location is the Facilitation Council's location, but the Tribunal can choose another location with party consent and may conduct proceedings in physical, electronic, or hybrid modes. Making of Award (Regulation 19)- After closing proceedings, the Arbitral Tribunal submits draft awards promptly, allows for changes, may issue partial awards, delivers the final award with reasons, and upon settlement, can issue a consent award or finalize arbitration upon payment of costs. Confidentiality (Regulation 28)- All matters concerning the arbitration and award must be kept confidential by the parties, Arbitral Tribunal, Centre members, and Centre itself, with limited exceptions including court applications, legal rights enforcement, compliance with laws, regulatory requirements, or Tribunal orders with notice to all parties. Moreover, a schedule accompanying the Regulations delineates the administration fees and arbitrator's fees applicable based on the dispute amountClick Here To Read /Download Notification

IIAC Releases Regulations For Conduct of Arbitration Involving Micro and Small Enterprises

Aditi Gupta

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