SEBI (Alternative Dispute Resolution)

SEBI's approach to investor grievance redressal has evolved across multiple channels. The SCORES (SEBI Complaints Redress System) online platform handles complaints against listed companies and intermediaries. For disputes involving a broker or depository participant, the exchange-level arbitration mechanism provides a structured legal remedy. ADR mechanisms — mediation, conciliation and arbitration — are available at various stages of this ecosystem.

Arbitration is the most developed ADR mechanism in the Indian securities market context. Under the Securities Contracts (Regulation) Act, 1956 and SEBI's circulars, investors who have a dispute with a trading member (broker) over trades, settlement or account matters can initiate arbitration through the exchange. The exchange appoints arbitrators from an approved panel, and proceedings follow a prescribed timeline. Arbitration awards are binding and can be executed like court decrees. Stock exchanges have handled tens of thousands of arbitration matters over the years.

Mediation and conciliation are consensual processes where a neutral third party (the mediator or conciliator) assists the disputing parties to reach a mutually acceptable settlement. Unlike arbitration, a mediator does not impose a decision. SEBI has encouraged the use of mediation for disputes that may benefit from a negotiated resolution rather than an adversarial determination. The Mediation and Conciliation Project Committee of the Supreme Court and legislative developments around the Mediation Act, 2023 have added statutory backing to mediation as a dispute resolution mechanism.

SEBI's Online Dispute Resolution (ODR) framework, introduced in 2023, integrates technology platforms into the dispute resolution process. Investors can initiate complaints, participate in conciliation and pursue arbitration through an online portal without needing to physically appear before any forum. This dramatically reduces the practical barriers for small investors in geographically remote areas to pursue legitimate complaints.

For market intermediaries, participation in the ADR framework is obligatory once a client invokes it. Failure to participate or comply with arbitration awards can result in suspension or cancellation of registration. For investors, understanding the ADR mechanisms available to them is essential: the SCORES portal for initial complaints, exchange arbitration for broker disputes, and the Investor Grievance Redressal mechanism for other intermediary complaints.