Out-of-court settlement regulations notified.
ISLAMABAD -- The Securities and Exchange Commission of Pakistan (SECP) has finally notified the Companies (Mediation and Conciliation) Regulations, 2018; one of the requirements of Companies Act. The regulations would allow out-of-court settlement for companies to resolve their business disputes within 90 days after a reference is forwarded to the SECP or the appellate bench.
The regulations have been finalised by the Corporatisation and Compliance Department of SECP and the commission would maintain a panel of certified mediators or conciliators for this purpose.
Currently there are two private alternative dispute resolution companies each in Karachi and Lahore and after the establishment of an accredited panel of mediators, the scope of alternative dispute resolution would spread to other areas of the country.
The mediator will be responsible to inform the parties about the procedural aspects of the process. At the same time, either party can complain against the mediator to the SECP over violation of any regulations.
Each party shall furnish to the mediator or conciliator the information as required by him in connection with the concerned issues. Regarding the settlement agreement, if an accord is reached between the parties, it shall be reduced to writing and signed by all the parties. Whatever decision the parties take should be forwarded to the Commission or the appellate bench.
The punishment for refusal to comply with these regulations is a penalty up to Rs5 million. In the case of a continuing contravention, a fine of Rs100,000 for each day of delay post-decision shall be imposed.
Being a district judge or a retired member of a government tribunal are some of the eligibility prerequisites in order to qualify for the role of mediator.