New mechanisms & reduced timelines: SEBI’s alternate dispute resolution amendment

Posted On - 22 November, 2023 • By - Souvik Ganguly


Recently, the Securities and Exchange Board of India (SEBI) amended various regulations vide the SEBI (Alternative Dispute Resolution Mechanism) (Amendment) Regulations, 2023 (Amendment) (read here) to introduce a dispute resolution mechanism for redressal of grievances. The Amendment comes in light of consultation papers dated 19 December 2022 (Consultation Paper 1) (read here) and 19 May 2023 (Consultation Paper 2) (read here). The Consultation Paper 1 proposed a revised alternate dispute resolution mechanism along with the establishment of an Online Dispute Resolution Portal (ODR Portal), expanding its scope to SEBI registered intermediaries (Intermediaries). Thereafter, Consultation Paper 2 proposed to strengthen the grievance handling mechanism through the SEBI Complaint Redressal System (SCORES) and link the same with the ODR Portal. Pursuant to the Amendment, SEBI issued a Master Circular on 31 July 2023 which was further amended on 04 August 2023 and 11 August 2023 (Master Circular) (read here) clarifying the working of the ODR mechanism.

The Master Circular aims to streamline, strengthen, and revamp SCORES, SEBI’s existing online complaint management system by linking it to the ODR Portal under the aegis of stock exchanges and depositories (also referred to as Market Infrastructure Institutions (MIIs)). The ODR Portal has now extended its outreach to specified intermediaries. This move aims to make the entire process of grievance redressal in the securities market comprehensive by eliminating the extant structural and procedural impediments and providing an end-to-end solution.


The Master Circular outlines a comprehensive framework for establishing a strong ODR mechanism, along with the inclusion of specific intermediaries in the securities market. This expansion means that the ODR mechanism now covers disputes between investors / clients and 12 regulated entities in the securities market.[i]

In cases where disputes arise between intermediaries and certain institutional / corporate clients, it can be resolved either by following the guidelines in the Master Circular or by utilizing independent institutional mediation, conciliation, and online arbitration services available in India, depending on the preference of such institutional / corporate clients.[ii]

However, it’s important to note that the ODR Portal cannot be used in cases where:

(i) The complaint / dispute is already under consideration by the market intermediary, SCORES, or is pending before an arbitral tribunal, court, or any other forum / tribunal.

(ii) The dispute is not arbitrable under Indian law, such as during the moratorium period under the Insolvency and Bankruptcy Code, 2016, or when the intermediary / MII is undergoing liquidation or winding-up proceedings.

Additionally, it’s worth mentioning that the ODR mechanism will not apply to such matters where an appeal will lie before the securities appellate tribunal.

SEBI’s Adoption of ODR

Chronologically, the investors have been mandated to first approach the concerned intermediary for resolution of their disputes. If unsatisfied by the outcome, the investor may escalate the complaint on SCORES. In case the investor is still not satisfied with the resolution on SCORES, such investor may opt to escalate the dispute on the ODR Portal. The ODR Portal is presently operational and can be accessed here.

The ODR Portal is comprehensive and provides for a two-tiered dispute resolution mechanism as described below:

i.  Conciliation

Under the ODR framework, the first step towards the settlement of disputes is conciliation. Subsequent to the appointment of a conciliator by the concerned ODR Institution, the process will be completed within a period of 21 days from the date of appointment of the conciliator, which can be further extended by 10 days with the consent of parties. If conciliation fails, the investor / client can then refer the dispute to arbitration.

ii.  Arbitration

In the event of an unsuccessful conciliation, the dispute will be referred to arbitration. The arbitral award must be issued within 30 days from the date of the arbitrator’s appointment. The arbitrator has the authority to extend this period, especially if the claim or counterclaim exceeds INR 100,000. If the claim or counterclaim is INR 100,000 or less, a document-only arbitration process will be followed. Additionally, a party has to express his / her intention to challenge the arbitral award under the Arbitration and Conciliation Act, 1996, (Arbitration Act) within 7 calendar days from the date of issuance of the arbitral award.


In the event of a successful conciliation, the proceedings shall be concluded by a duly executed settlement agreement, executed and stamped through the ODR Portal. In case the dispute is escalated to arbitration, the arbitral award will be enforceable after the expiry of the time period to challenge the arbitral award i.e., 3 months.

Our thoughts

Globally, alternative dispute resolution has gained popularity over litigation in courts / tribunals. In India as well, apart from the Arbitration Act, there have been reforms in multiple statutes to include arbitration / mediation / conciliation as a mode to resolve disputes before initiating litigation.

It must be noted that India witnesses substantial litigation in securities market. Moreover, given the nature of reliefs involved in such disputes, it becomes essential that the resolution is expeditious. While the ODR Portal seems to be an effort to expedite the dispute resolution process, its effectiveness remains to be seen. It must be noted that arbitration proceedings are inherently adversarial in nature and are driven by party autonomy. In fact, party autonomy not only includes choice of arbitral tribunal but also choice of procedure. As has been witnessed before, parties tend to raise petty issues under the guise of choice of procedure and hamper the efficiency of arbitration. Moreover, the arbitrators also tend to suffer from due process paranoia. In this background, it remains to be seen whether the timelines prescribed under statutes will be treated as directory or mandatory. The authors are of the view that the introduction of ODR Portal will benefit the grievance redressal mechanism if all stakeholders use the process in good faith to settle their differences.

Authors: Souvik Ganguly, Richa Phulwani and Krishna Nair

The information contained in this document is not legal advice or legal opinion. The contents recorded in the said document are for informational purposes only and should not be used for commercial purposes. Acuity Law LLP disclaims all liability to any person for any loss or damage caused by errors or omissions, whether arising from negligence, accident, or any other cause.

[i] (i) Fund managers of Alternative Investment Funds; (ii) Collective Investment management company; (iii) Commodities Clearing Corporations; (iv) Depository Participants; (v) Investment Advisors; (vi) Investment Manager of the Infrastructure Investment Trust; (vii) Asset Management Companies of Mutual Funds; (viii) Portfolio Managers; (ix) Registrars and Share Transfer Agents; (x) Managers of Real Estate Investment Trusts; (xi) Research Analysts; and (xii) Stock brokers.

[ii] (i) Clearing Corporations and their constituents; (ii) Credit Rating Agency and rating clients; (iii) Custodians and their clients / FPIs; (iv) Debenture Trustees and issuers; (v) Designated Depository Participant and their clients / FPIs; (vi) KYC Registration Agency and their clients / intermediaries; (vii) Merchant Banker and issuers; (viii) Mutual Funds and Mutual Fund Distributors; (ix) Proxy Advisory and their clients; (x) Proxy Advisors and listed entities; (xi) Registrars and Share Transfer Agents and their clients; (xii) Research Analyst and their clients; (xiii) Stock brokers and their Authorized Persons; (xiv) Trading Members and Clearing Members; and (xv) Vault Managers and beneficial owners.