IBBI Expert Committee suggests introduction of voluntary mediation under IBC
An expert panel set up by the Insolvency and Bankruptcy Board of India (IBBI) has recommended the introduction of voluntary mediation as a complementary mechanism for the resolution of disputes under the Insolvency and Bankruptcy Code (IBC). The mediation framework under the Code (IBC), as recommended by the Committee, would best operate as a self-contained blueprint within the Code, with independent infrastructure to ensure that the objectives of the Code are met without compromising or diluting the basic structure of the Code in terms of timelines, public rights.
It has recommended a phased introduction of voluntary mediation as a dispute resolution mechanism under the Code while maintaining the sanctity of the timelines for various existing insolvency resolution processes. The core essence of the framework is its independence and flexibility to provide room for quick incorporation of implementational learning. It has suggested establishment of a dedicated and specialised NCLT- annexed insolvency mediation cell with an independent secretariat to administer, oversee, and manage the conduct of insolvency mediations under the Code.
As per IBBI, The Committee has taken a cautious approach and endeavoured to balance the fundamental objectives of the Code, that is ‘time-bound reorganisation’ and ‘maximisation 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.
