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IIAC Releases Regulations for Conduct of Arbitration
Involving Micro and Small Enterprises The India International Arbitration Centre (IIAC) has recently unveiled the IIAC (Conduct of Micro and Small Enterprises Arbitration) Regulations, 2024, which came into effect on 7th June'24.
These regulations signify a crucial development aimed at improving the arbitration process for Micro and Small Enterprises in India. The primary goal is to make dispute resolution more accessible, efficient, and affordable for MSEs, addressing their unique needs and challenges. This can be considered as initiative on the part of IIAC's broader efforts to promote arbitration as a viable alternative to traditional litigation, thereby improving the business environment for MSEs in the Indian economy. The IIAC Regulations simplify arbitration procedures by reducing complexity and formalities typically associated with traditional arbitration. This includes streamlined filing processes, expedited timelines, and fewer procedural requirements, making it easier for MSEs to engage in arbitration. Furthermore, a tiered fee structure has been introduced, offering lower costs for smaller claims and flexible payment options to ensure financial accessibility for MSEs. To further support MSEs, IIAC has upgraded its digital platform, allowing for easy document submission and virtual hearings. This not only reduces travel and logistical costs but also enhances convenience and accessibility regardless of geographic location. Key Features of the IIAC Regulations to overcome the
common obstacles faced by MSEs in resolving disputes. 1. No Filing Fees: MSEs are exempt from paying filing fees for claims or counterclaims. This measure eliminates a major financial barrier, encouraging more small enterprises to consider arbitration as a viable option for dispute resolution. Reduced Costs: The fees for Arbitrators and administrative services are set lower than those outlined in the Arbitration and Conciliation Act, 1996. This reduction makes arbitration more cost-effective for MSEs, ensuring they can access justice without excessive financial strain. 2. Fast Track Procedure: Arbitration under these regulations primarily relies on document-based procedures, minimizing the need for oral hearings. Oral hearings are conducted only if both parties request them or if the Arbitral Tribunal deems it necessary, ensuring a quicker resolution process. A dedicated panel of arbitrators specializing in MSE disputes has been established to ensure efficient and sensitive handling of cases. 3. Time-Bound Awards: The IIAC Regulations mandate that Arbitral Awards to be issued within the period of six (6) months from the commencement of the Arbitral Tribunal. This can be further extended under certain specified exceptional circumstances. This time-bound approach ensures prompt resolution of disputes. 4. Support for MSEs: MSEs facing financial difficulties can apply for legal aid, which can reduce the IIAC’s administration fees by up to 50%. This support system ensures that even financially constrained MSEs can access arbitration. 5. Innovative Use of Technology: The IIAC plans to utilize AI software for real-time translation and document conversion in the languages listed in the Eighth Schedule of the Constitution of India. This technological innovation enhances accessibility and efficiency in the arbitration process. Conclusion
The IIAC Regulations represent a significant enhancement in the arbitration process for Micro and Small Enterprises (MSEs) in India. By eliminating filing fees, reducing arbitration costs, introducing an expedited procedure, and leveraging advanced technology, these regulations markedly lower the hurdles MSEs face in accessing arbitration. The IIAC Regulations substantially reduce the barriers to Arbitration for small enterprises. The provision of legal aid ensures that even financially disadvantaged MSEs can access justice. The requirement for timely resolution of disputes and passing of Arbitral Awards further guarantees prompt dispute resolution, providing much-needed certainty for businesses. These IIAC Regulations are a commendable effort by the IIAC to create a more inclusive, efficient, and effective arbitration environment, ultimately supporting the growth and sustainability of MSEs in the Indian economy. |
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Integrated Association
of Micro Small
& Medium Enterprises of
India
(Not-for-Profit
Institution for
Growth
& Development of
MSMEs)
IamSMEofIndia,
Sector 11, Mathura
Road,
Faridabad-
121006, Haryana,
India
Ph: +91-9711101666
(EVP)
; +91-9711123111
(Executive
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