On June 07, 2024, IIAC has made India International Arbitration Centre (Conduct of Micro and Small Enterprises Arbitration) Regulations 2024 (‘The Regulations’) recognising the need to promote faster and more effective resolution of disputes affecting Micro and Small Enterprises as part of its efforts to promote arbitration in this very important sector in the Indian economy.
The Regulations have come into force on the date of their publication in the Official Gazette, in order to facilitate the conduct of arbitration upon receipt of a reference from Micro and Small Enterprises Facilitation Council (“Facilitation Council”) under the (“MSMED Act”).
Key features:
No filing fee for Claim or Counter Claim and minimal arbitrator fee (less than the rate specified in the Fourth Schedule of the ) and minimal administration fee payable by parties.
Fast Track Procedure based on pleadings, documents and submissions filed by parties, is the default procedure for all arbitrations. Oral hearings may be held only if all parties request or if the Arbitral Tribunal considers it necessary to clarify certain issues. The award shall be made within 6 months from the date of intimation by the Registrar to the parties of the constitution of the Arbitral Tribunal. However, upon application by the party, the Arbitral Tribunal may order that arbitral proceedings shall not be conducted following the fast-track procedure.
Appointment of Sole Arbitrator by Chairperson, IIAC on the advice of Advisory Panel constituted by IIAC. In appointing an Arbitrator, due consideration shall be given to ensure that the Arbitrator is independent and impartial, and has sufficient time, availability and competency to conduct the case promptly and efficiently.
Legal aid to Micro or Small enterprises facing financial difficulties. Micro or Small enterprise may make an application to IIAC along with supporting documents for legal aid. Where an application is allowed, it may result in a waiver of up to 50% of the administration fee of IIAC. A counsel at no cost basis may also be provided to aid and assist subject to the decision of the Arbitral Tribunal regarding costs of arbitration.
IIAC intends to use Artificial Intelligence Software developed by Digital India Bhashini Division, an Independent Business Division with Digital India Corporation under Ministry of Electronics and Information Technology, to achieve its objective to make the process of arbitration easy and transparent for all involved pan India irrespective of the region and the language used by the parties. This will include live/real-time translation of documents from one language to another language; translation of one language to another language/speech; translation of documents from any of the languages (for which the Software is available) mentioned in the Eighth Schedule of the Constitution of India etc. to English/Hindi. It is for the first time, that the technology is being attempted to be used in any dispute resolution process in the country.
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