IBBI Panel Suggests Phased Introduction Of Voluntary Mediation In Insolvency Process

An expert committee, constituted by the Insolvency and Bankruptcy Board of India (IBBI), has recommended a phased introduction of voluntary mediation as a dispute resolution mechanism under the country’s bankruptcy law.

The expert committee to examine the scope of mediation use in respect of processes under the Insolvency and Bankruptcy Code (IBC) submitted its report on 31 January, the IBBI said in a statement.

The committee has made recommendations on the likely framework for the introduction of mediation as a complementary mechanism for resolution of disputes around the processes under the IBC, it added.

The mediation framework, as recommended by the committee, would best operate as a self-contained blueprint within the IBC, with independent infrastructure to ensure that the objectives of the law are met without compromising or diluting the basic structure of the code in terms of timelines and public rights, the insolvency regulator said.

The IBBI said the committee has taken a cautious approach and endeavored to balance the fundamental objectives of the IBC i.e., “time-bound reorganization” and “maximization of value”, with autonomy to parties to voluntarily opt for the ‘out-of-court’ mediation process to enhance the efficiency of the insolvency resolution process.

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