Executives from several online dispute resolution (ODR) platforms are writing to the Securities and Exchange Board of India (Sebi) to urge the regulator to refine the existing dispute framework rather than dismantle independent platform roles. According to industry executives and experts, Sebi's proposed overhaul could eliminate independent ODR entities, stranding multi-year investments in technology, compliance, and specialized teams. In a consultation paper released on 23 July, Sebi proposed transferring complete administration of conciliation and arbitration from empanelled private ODR institutions to market infrastructure institutions (MIIs)—such as stock exchanges, depositories, and clearing corporations. Public comments on these proposals are open until 13 August.
Currently, investor complaints pass through Sebi's SCORES platform before escalation to seven empanelled ODR platforms: CORD, Centre for Alternate Dispute Resolution Excellence (CADRE), Webnyay, Presolv360, Sama, Just Act, and Jupitice. Under the proposed framework, responsibilities currently handled by private ODR entities—including appointing conciliators and arbitrators, coordinating hearings, maintaining records, and managing technology platforms—would move entirely to MIIs. For investors and market intermediaries, Sebi argues the shift will streamline the dispute resolution mechanism, addressing chronic issues including delays in appointing arbitrators, slow fee disbursements, weak enforcement of awards, and procedural bottlenecks.
ODR platforms are pushing back against Sebi's rationale, arguing that many issues are systemic rather than caused by the platforms themselves. CORD's CEO Deepika Kinhal noted that platforms have repeatedly warned Sebi about an unviable fee structure: while handling a conciliation costs an ODR platform around ₹2,500, it receives just ₹600 from the total fee (₹3,240 for an unsuccessful conciliation and ₹4,800 for a successful one), with the remainder going to the conciliator. Market participants fail to pay the conciliation fee in nearly 30% of cases, forcing ODR platforms to pay conciliators out of pocket while waiting for reimbursement. As reported by industry executives, this problem will not be solved even if MIIs take charge, as MIIs could have already come in to penalize market participants for non-payment of fees.
Legal and market experts point out that shifting administration to MIIs introduces new structural conflicts while doing little to resolve underlying enforcement delays. Vishwam Jindal, co-founder of Webnyay, noted that some MIIs function as front-line regulators to market participants while also doing business with them, which will undermine the perception of independent arbitration. Experts emphasize that enforcement of arbitral awards will not change if MIIs operate the ODR framework, as the process remains bound by statutory court procedures under India's Arbitration and Conciliation Act. Under both frameworks, if a regulated entity challenges an arbitral award in court, it must deposit 100% of the award amount with the concerned MII, which can release up to ₹5 lakh as interim relief to the investor.
