A Comprehensive Exploration Over The Efficacy Of Dispute Resolution Mechanism In Resolving Insolvency Disputes In India

Abstract

The prevailing method for resolving insolvency disputes, adjudication, presents notable challenges such as the common pool problem, business disruption, and high litigation costs. This prompts the question of whether insolvency disputes can find resolution without adjudication, through online dispute resolution mechanisms. Dispute resolution mechanism has emerged as a viable counterweight to adjudication in insolvency cases, offering avenues to circumvent its inherent shortcomings. Unlike adjudication, dispute resolution mechanism endeavors to achieve a peaceful settlement, fostering agreements between debtors and creditors. Additionally, it aims to reconcile conflicting interests inherent in insolvency cases, namely, the continuation of the debtor’s business and the satisfaction of creditors’ claims. Furthermore, dispute resolution mechanism proceedings offer privacy, keeping disputes out of the public eye. Leading pro-debtor nations such as the United States of America and France have already implemented Dispute Resolution mechanisms for insolvency disputes, paving the way for its potential adoption and development in other jurisdictions. This paper delves into the promise and efficacy of dispute resolution mechanism in revolutionizing insolvency dispute resolution, drawing insights from successful implementations in key jurisdictions.