The India International Arbitration Centre (IIAC) has issued the IIAC (Conduct of Micro and Small Enterprises Arbitration) Regulations, 2024, which were notified on June 7 in the Official Gazette.
According to a press release, these regulations aim to promote faster and more effective resolution of disputes affecting Micro and Small Enterprises (MSEs), aligning with IIAC’s efforts to support arbitration in this sector of the Indian economy.
“It is now widely recognised that arbitration is no longer an ‘alternative’ but the preferred mode of resolving commercial disputes. The IIAC Conduct of Micro and Small Enterprises Arbitration Regulations will lead the way in providing a neutral platform for the speedy resolution of disputes affecting Micro and Small Enterprises,” the press release stated.
The regulations facilitate arbitration upon receiving a reference from the Micro and Small Enterprises Facilitation Council under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act).
Key features of the IIAC Conduct of Micro and Small Enterprises Arbitration Regulations include:
No filing fee for claims or counterclaims; minimal arbitrator fees (lower than the rates specified in the fourth schedule of the Arbitration and Conciliation Act, 1996); and minimal administration fees for parties.
A fast-track procedure based on pleadings, documents, and submissions by parties is the default for all arbitrations. Oral hearings are held only if all parties request them or if the arbitral tribunal deems them necessary to clarify certain issues. Awards must be made within six months from the date the Registrar informs the parties of the tribunal’s constitution. However, the tribunal may order not to follow the fast-track procedure upon a party’s application.
The Chairperson of IIAC appoints a sole arbitrator on the advice of an Advisory Panel. The appointed arbitrator must be independent, impartial, and have the time, availability, and competence to conduct the case promptly and efficiently.
Legal aid is available to MSEs facing financial difficulties. MSEs can apply to IIAC for legal aid with supporting documents. Approved applications may result in a waiver of up to 50 percent of the IIAC’s administration fee. A no-cost counsel may also be provided to assist, subject to the arbitral tribunal’s decision on arbitration costs.
The IIAC also plans to use Artificial Intelligence Software developed by the Digital India Bhashini Division under the Union Ministry of Electronics and Information Technology to make the arbitration process easy and transparent nationwide, regardless of region or language.
This includes live or real-time translation of documents and speech between different languages, and translation of documents from any language listed in the eighth schedule of the Constitution of India to English or Hindi.
