ODR Institution

SEBI's Online Dispute Resolution (ODR) system has three layers. Each layer has its own job.

• The ODR Portal (SMART ODR) is the common website. This is where disputes are filed.
• The MIIs run the portal and review complaints. MII is short for market infrastructure institution. Here that means the stock exchanges, depositories and clearing corporations.
• The ODR Institutions are the ones that actually resolve disputes.

An ODR Institution is an independent body. It is empanelled by an MII, which means the MII has put it on its list. It has qualified conciliators and arbitrators. A conciliator helps the two sides reach a deal. An arbitrator hears both sides and decides.

It runs online conciliation and online arbitration within set time limits. It does this under the Arbitration and Conciliation Act, 1996. When a dispute reaches it, it picks the conciliator. It also runs any arbitration that follows. And it collects the arbitration fees.

Empanelment (Chapter 7, section 7.3.2)

• Each MII empanels one or more ODR Institutions and signs agreements with them per SEBI guidelines.
• An MII's primary/first ODR Institution must not be the primary/first ODR Institution of any other MII.
• The MII collects: registration certificate, MoA/AoA or constitutional documents, rules for conciliation and arbitration, PAN, Legal Entity Identifier, board/governing body composition, shareholders and investors, and authorised signatories.
• Empanelled institutions must be members of an association of MII-empanelled ODR Institutions.
• They must be capable of time-bound online conciliation/arbitration using online/audio-video technology and have duly qualified conciliators and arbitrators.

Handling a dispute (sections 7.3.4–7.3.10)

ODR Institutions conduct all proceedings online, and the ODR Portal shows status updates obtained from them.

Dates and amounts are illustrative; timelines are the workbook's.

Farhan files a dispute against his broker on SMART ODR on 1 August, claiming Rs 3,50,000. He had already complained to the broker.

1. MII review: the exchange tries to settle it by 22 August (21 calendar days). It fails.
2. Allocation: the portal's round-robin system assigns the dispute to ODR Institution "X".
3. Conciliator: Institution X receives the reference on 23 August and appoints a sole conciliator by 28 August (5 days).
4. Conciliation: runs up to 18 September (21 days from appointment). No settlement.
5. Admissible claim value: the conciliator fixes Rs 2,00,000 and notifies Farhan, the broker, Institution X and the exchange.
6. Arbitration: Farhan starts online arbitration, administered by Institution X. The claim is below Rs 30 lakh, so there is a sole arbitrator. As it exceeds Rs 1 lakh, hearings are held and the award is due within 30 calendar days of appointment.
7. Institution X collects the arbitrator's fee and its own fee separately.

Chapter 7, section 7.3 (SMART ODR) covers ODR Institutions throughout: empanelment (7.3.2), the portal (7.3.3), round-robin allocation (7.3.5), appointment of conciliators and the admissible claim value (7.3.6), arbitration (7.3.8), online form of proceedings (7.3.9) and arbitration fees (7.3.10). Exam questions test who empanels ODR Institutions (MIIs), who appoints the conciliator (the ODR Institution) and the 5-day and 21-day timelines.

• MIIs empanel ODR Institutions; SEBI does not appoint them case by case.
• An MII's primary ODR Institution cannot be another MII's primary ODR Institution.
• The ODR Institution appoints the conciliator within 5 days; the MII's own review takes up to 21 days before that.
• Allocation is round-robin across the market, not the investor's choice.
• The same ODR Institution that ran conciliation administers the arbitration.
• Arbitration fees are collected by the ODR Institution; conciliation fees are borne by MIIs and recovered from the market participant, never from the investor.