The adoption of ODR by SEBI is more than just an incremental increase in the reach of ODR. It is a revolutionary change that has the potential to fundamentally disrupt the landscape of ADR and ODR, not just in India but globally, and open the doors for far reaching change for some key reasons:
· First, the adoption of ODR by SEBI is among the first of its kind globally where statutory conciliation and arbitration with private ODR players has been provided for.
· Second, securities market disputes can range from the super-simple to extremely complex. The fact that ODR has now been provided for the entire spectrum of disputes represents a marked shift in attitude. In the past, ODR has (wrongly) been seen as only being appropriate only for simpler disputes. SEBI’s adoption is a much needed recognition of the true impact and potential of ODR including in more complex disputes.
· Third, the adoption by SEBI marks an important milestone of regulatory/government bodies delegating the power of appointment of neutrals to private ADR/ODR participants, while also imposing sufficient checks and balances on the exercise of such power. This is particularly relevant in a country like India where appointment of arbitrators by courts (in ad hoc arbitrations) and government run facilitation councils and equivalent (in cases like MSME disputes) has been among the largest contributors of delay in dispute resolution.
· Fourth, the prescription of quality standards by SEBI for ODR service providers is a much-needed balance to the vesting of responsibilities. This is among the first instances globally where ADR/ODR institutions are being held to basic standards and represents a welcome shift in attitude where ADR/ODR institutions are being seen as service providers rather than proxies to courts necessitating a degree of deference.
· Fifth, the incorporation of processes allowing for operation of multiple ODR institutions who can be chosen from and plugged into any case inter-changeably is revolutionary. This opens up the possibility of using private sector participants with a degree of ongoing accountability that any long-term engagement with one or more participants cannot achieve.
Source: Barandbench
