The Insolvency and Bankruptcy Board of India (IBBI) on November 04, 2024, issued a circular regarding a discussion paper on Mediation by the operational creditors (OCs) before approaching Adjudicating Authority (AA) for filing a Section 9 application.
The following has been stated: -
•The IBBI has proposed a voluntary mediation mechanism for operational creditors (OCs) before initiating a Section 9 application under the Insolvency and Bankruptcy Code (IBC), 2016.
•The objective is to resolve common disputes such as quality issues, contractual disagreements, and underpayments, before burdening the Adjudicating Authority (AA).
•This mediation, conducted under the Mediation Act, of 2023, would help expedite the admission process of the Corporate Insolvency Resolution Process (CIRP) by reducing litigation and facilitating early settlements.
•A non-settlement report will be annexed to the Section 9 application if mediation fails. Public comments on this proposal are invited by November 24, 2024.
The detailed notification is given in the document below.
