The Institute of Chartered Accountants of India (ICAI) plans to set up a Section 8 (not-for-profit) company to offer mediation services as an alternate dispute resolution mechanism, a top official said.

“We plan to set up this (Sec 8 entity) as per the directive of the Law Ministry,” Ranjeet Kumar Agarwal said at the 2nd edition of RESOLVE 2024 in the capital. RESOLVE 2024 was a two day international conference with aim to foster the adoption of global best practices in the industry. 

Under the proposed Section 8 company, ICAI wants to offer both mediation and arbitration to settle disputes in Corporate India.

Agarwal also said that ICAI — in line with IBBI advice — is in the process of developing valuation standards for the asset class ‘Land & Building’ and ‘Plant & Machinery’. This will be on the lines of the valuation standards prepared by CA Institute for the asset class ‘Securities or Financial Assets’.

Agarwal came up with three suggestions to strengthen and enhance the Insolvency and Bankruptcy Code (IBC) law in the country.

“First, we must focus on strengthening the institutional framework and establishing more Benches in NCLT and appointing more judges to support the IBC. Second, we need to improve the resolution timelines of 330 days to ensure that cases are resolved efficiently. Third, we must promote Alternative Dispute Resolution systems,” Agarwal added.

In his inaugural address, Ashok Bhushan, Chairperson, National Company Law Appellate Tribunal (NCLAT), highlighted that meeting the timeline of 330 days within which a resolution plan has to be approved continues to be a challenge.

“Some challenges still persist. The resolution process currently takes 679 days to conclude, well beyond the standard timeline of 330 days. Delays are often due to litigation by multiple stakeholders with competing interests, which erode the value of distressed CD and minimise recovery for creditors,” Bhushan added.

Some challenges still persist. The resolution process currently takes 679 days to conclude, well beyond the standard timeline of 330 days. Delays are often due to litigation by multiple stakeholders with competing interests, which erode the value of distressed corporate debtor and minimize recovery for creditors,” Bhushan added.

Published on July 14, 2024