The Companies Act, 2013 which came into force on september 12th, 2013 brought in a significant transition in the Companies Act, 1956 in terms of incorporartion of a company, the dispute resolution of the company, the board of directors of the company, etc. The 658 sections and the 7 schedules that the 1956 Act spread across has been reduced and comprehensed into 470 sections and 29 chapters in the 2013 Act. The Companies Act, 2013 apart from incorporating chnges in the constitution and functioning of the company, also introduced Alternative Dipsute Redrassal (ADR) as a major dispute resolution mechanism in solvng related to corporate affairs . In this regard, section 442 of the Companies Act, 2013 allows for Alternative Dispute Redrassal mechanisms. To allow for the proper implementation of the section, the Minstry ofCorporate Affairs, Government of India issued the Companies ( Mediation and Conciliation ) Rules, 2016 to that effect. However, the author in this article is primarily focussing on alternative dispute redrassal under sction 442 of the Companies Act, 2013.
SECTION 442 OF THE COMPANIES ACT, 2013 CAN BE DISCUSSED AS UNDER :
- A Mediation and Conciliation panel shall be maintained by the central government, having such number of members with the required qualifications, as may be prescribed for mediation between the parties during the period when the proceedings are pending before the central government or the tribunal or the appelate tribunal, under this Act.
- At any time during the course of the proceedings before the central governent or the tribunal or the appellate tribunal, the parties to the dispute can, in the prescribed manner along with such fees, if any, apply to the central government or the tribunal or the appelate tribunal to refer the matter to the Mediation and Conciliation Panel and the central government or the tribunal or the appelate tribunal shall appoint one or more experts as per sub - section(1).
- The central government or the tribunal or the appellate tribunal may suo motu refer any matter pending before it to such number of experts of the Mediation and Conciliation panel as the central government or the tribunal or the appellate tribunal deems fit.
- The various terms and conditions and the fees of the experts of the Mediation and Conciliation panel shall be such as will be prescribed.
- The Mediation and Conciliation panel shall follow such procedures as maybe prescribed to it and within a period of three months the matter must be disposed of. The settlement and the recommendations must be submitted before the central government or the tribunal or the appelate tribunal, as the case maybe.
- If a party to the dispute is unsatisfied or aggrieved with the recommendations of the Mediation and Conciliation panel, then the party can approach the central government or the tribunal or the appelate tribunal, as the case maybe, raising objections against any such grievances.