1. Three Layers of Compliance

Layer A: Regulatory Compliance - Regulator mandates how disputes must be resolved

• Banking: RBI Integrated Ombudsman Scheme 2021, Consumer Protection Act 2019
• Securities: SEBI SCORES, Stock Exchange Arbitration
• Company Law: Sec 241/242 NCLT, Sec 430 - commercial dispute

Layer B: Contractual Compliance - Clause in agreement must be followed before suit

• Arbitration clause - Sec 8 Arbitration Act
• Mediation clause - Mediation Act 2023
• Tiered clause: Negotiation > Mediation > Arbitration > Litigation
• Pre-action protocols UK CPR, India Commercial Courts Act 2015 Sec 12A

Layer C: Procedural Compliance - Once dispute starts, compliance with limitation, disclosure, confidentiality

2. Arbitration Compliance

Statutory Framework India: Arbitration and Conciliation Act 1996, amended 2015, 2019, 2021. UK: Arbitration Act 1996.

Compliance Checklist:

1. Valid arbitration agreement - Sec 7 - in writing
2. Invocation notice - Sec 21
3. Appointment per Sec 11 - independent, impartial, disclosure Sec 12
4. Sec 12A - mandatory pre-institution mediation for commercial suits - Commercial Courts Act
5. Limitation - Sec 43 - 3 years

Case 1: Vidya Drolia v Durga Trading Corp - 2021 - SC - 4 Judge Bench - Arbitrability

Held 4-fold test for arbitrability:

• Dispute not non-arbitrable per statute
• No public policy implying non-arbitrable
• Not sovereign function
• Not subject matter reserved for public fora
  Held landlord-tenant under Transfer of Property Act arbitrable, but fraud, insolvency, criminal matters non-arbitrable. Compliance = check if dispute arbitrable before referring.

Case 2: BCCI v Kochi Cricket Pvt Ltd - 2018 - SC - Compliance with Amendments
Whether 2015 amendment applies to pending Sec 34 petitions. Held prospective. Compliance = apply correct version of law based on date of arbitration invocation.

Case 3: Perkins Eastman Architects DPC v HSCC India - 2019 - SC
Arbitration clause providing for appointment by CMD of party - person having interest. Held such appointment invalid under Sec 12(5) read with 7th Schedule - unilateral appointment non-compliant, violates neutrality. Disqualification compliance mandatory.

Case 4: Bharat Broadband Network v United Telecoms - 2019 - SC
Even if party does not object, if arbitrator de jure ineligible under Sec 12(5) - unilateral appointment - award void. Compliance cannot be waived by conduct.

Case 5: UK - Enka v Chubb 2020 UKSC 38 - Law of Arbitration Agreement
Compliance with governing law clause for arbitration agreement. SC held law applicable to arbitration agreement may differ from main contract law. Non-compliance leads to unenforceability under New York Convention Art V.

Case 6: Dispute Over Pre-Conditions - Compliance with Tiered Clause

M.K. Shah Engineers v State of MP - 1999 - SC and UK - Emirates Trading Agency v Prime Mineral Exports - 2014 EWHC 2104
Tiered clause - Negotiation for 30 days mandatory before arbitration. If party jumps directly to arbitration without complying with pre-condition - arbitration premature, tribunal lacks jurisdiction. Emirates Trading held obligation to undertake friendly discussion in good faith - enforceable, must be complied.

Compliance Failure Cost:

• Sec 8 application rejected if no compliance with pre-arbitration steps? No, Sec 8 mandatory - court must refer if valid arbitration agreement exists - but tribunal may stay.

3. Mediation Compliance - New Regime

Mediation Act, 2023 - Effective India
Sec 6: Disputes suitable for mediation
Sec 12A Commercial Courts Act: Mandatory pre-institution mediation for commercial disputes - no suit without exhausting mediation - non-compliance = plaint rejected under Order VII Rule 11.

Case 7: Patil Automation Pvt Ltd v Rakheja Engineers - 2022 - SC - Sec 12A Compliance Mandatory
Commercial suit filed without pre-institution mediation. SC held Sec 12A mandatory, not directory. Plaint must be rejected. Compliance strict - except where urgent interim relief contemplated.

Same UK: CPR Pre-Action Protocols - failure to comply leads to cost sanctions even if you win.

Case 8: Afcons Infrastructure v Cherian Varkey Construction - 2010 - SC
Distinguished mediation vs conciliation. Court must refer suitable cases to ADR under Sec 89 CPC - compliance with Sec 89 - failure to consider ADR = procedural irregularity.

4. Banking Dispute Resolution Compliance - RBI

RBI Integrated Ombudsman Scheme, 2021 - Replaces 3 earlier schemes
Compliance steps for banks:

• Must have Internal Ombudsman, Nodal Officer
• Complaint to bank first - 30 days - then Ombudsman
• Bank must comply with Ombudsman award within 30 days - else report to RBI - penalty under Banking Regulation Act Sec 46, 47A

Case 9: RBI v Neelkamal Realtors - Bombay HC 2023 - Ombudsman Award Enforceability
Bank challenged Ombudsman award in Writ. HC held Ombudsman scheme is regulatory compliance - award binding if bank does not appeal within 30 days to Appellate Authority - Deputy Governor RBI. Bank non-compliance = RBI can initiate supervisory action, impose penalty Rs 1 lakh per day.

Case 10: Dharani Sugars v Union of India - 2019 - SC - RBI Circular Compliance
RBI circular 12 Feb 2018 on resolution of stressed assets - mandated referral to IBC if resolution fails in 180 days - SC struck down as ultra vires Sec 35AA - held RBI must comply with due process, consult govt before issuing directions. Dispute resolution compliance must be within parent statute.

5. Corporate / Securities Dispute Compliance

Case 11: SEBI - SCORES Compliance - SEBI Circular 2023
Listed companies must resolve investor complaints on SCORES within 21 days. Non-compliance = penalty under SEBI LODR Reg 13, fine Rs 1000 per day, trading suspension.

Case 12: SEBI v Kishore R Ajwani - 2016 - SC
Stock exchange arbitration - BSE arbitration award under Bye-laws - compliance with limitation - appeal to Securities Appellate Tribunal - non-compliance with deposit of 50% award amount - appeal not maintainable.

Case 13: NCLT - Cyrus Investments v Tata Sons - 2021 - SC - Sec 241 Oppression
Tribunal held dispute resolution compliance - oppression petition - must first approach Board, show clean hands. Petitioner failed to comply with Articles - held not maintainable as commercial dispute disguised as oppression.

6. Consumer Dispute Compliance

Consumer Protection Act 2019 + RBI Customer Service
Bank must have Customer Service Committee of Board, display complaint number.

Case 14: SBI v Om Prakash - NCDRC 2022
Bank charged excess interest vs sanction letter - consumer forum awarded compensation. Bank argued dispute is commercial not consumer - held banking service deficiency is consumer dispute - bank failed to comply with disclosure obligations - sanction letter vs agreement - deficiency.

Case 15: UK - FCA DISP - Financial Ombudsman Service
Under FSMA 2000 Sec 226, banks must comply with FOS jurisdiction - cooperate, produce file within 4 weeks - non-compliance = adverse inference + additional compensation + FCA fine.

FCA fined Lloyds £64m in 2020 for failure to comply with dispute handling - mishandled 500,000 mortgage complaints.

7. IBC - Dispute Resolution Compliance - Section 8, 9

Case 16: Mobilox Innovations v Kirusa Software - 2017 - SC - Existence of Dispute
For Sec 9 IBC operational creditor - debtor can show pre-existing dispute - compliance: dispute must be bona fide, raised before demand notice under Sec 8 - WhatsApp/email dispute sufficient - IBC cannot be used as recovery for disputed debt.

Case 17: K. Kishan v Vijay Nirman - 2018 - SC
If arbitration already pending on same debt - existence of dispute - IBC petition not maintainable - compliance = choose forum, cannot parallel.

8. Compliance Penalties Matrix

9. Best Practice Compliance Framework for Banks / Companies

1. Clause drafting: Insert valid multi-tier: "Negotiation 15 days - Mediation under Mediation Act 2023 / SIAC Rules - Arbitration - Delhi / London seat - Governing law - Institution"
2. Invoke properly: Issue Sec 21 notice with 30 days cure, preserve limitation.
3. Pre-action: Comply with Commercial Courts Act 12A - apply for mediation before filing suit - get non-starter report.
4. Disclosure: Arbitrator Sec 12 disclosure + Bank file to Ombudsman within 15 days.
5. Timelines: Arbitration 12 months Sec 29A - award within 12 months - extension by court.
6. Preserve evidence: Bankers' Books Evidence Act 2026 certification - electronic records.
7. Regulatory reporting: Report dispute to RBI CRILC if > Rs 5 cr fraud, to SEBI if material per LODR Reg 30.