NISM-Series-VII: Securities Operations and Risk Management · Investor Grievances and Arbitration

Appeal, Conciliation and Mediation in Stock Exchange Disputes

Updated 11 October 2026

Appeal, conciliation and mediation are the routes open to an investor after or alongside arbitration at a stock exchange. Arbitration gives a binding award. A party unhappy with it can appeal to an appellate panel within the time limit. Conciliation and mediation are voluntary, settlement-based options. Awards are enforced through the exchange.

Understand Appeal, Conciliation and Mediation

Start with the base case. An investor has a dispute with a trading member about a trade on the exchange. The investor first complains to the member, then to the exchange or SEBI SCORES. If the dispute is not settled, the exchange's arbitration mechanism decides it. An arbitrator or panel hears both sides and gives a binding award.

A losing party may not accept that award. The appellate arbitration step is the second look. The aggrieved party files an appeal with the exchange within a short, fixed period from receiving the award. A bigger panel of arbitrators, not the original ones, reviews the matter. The appeal is not free of cost for the appellant. The rules require the appellant to deposit a stated part of the award amount, so that appeals are not used only to delay payment. Check the exact percentage and cap in your current NISM workbook, because these amounts have been revised over time.

Conciliation and mediation work differently. They are not decisions. A neutral person helps both sides reach a settlement on their own terms. The neutral cannot impose an outcome. If the parties agree, they sign a settlement, and it can be recorded in a binding form. If they do not agree, nothing is lost, and the dispute can still go to arbitration. SEBI has also brought in an Online Dispute Resolution (ODR) route, where conciliation and arbitration are conducted online through recognised institutions.

The last piece is enforcement. An award is only useful if it is paid. The exchange follows up on the member's payment. If the member does not pay, the exchange can act against the member, including using the member's deposits and other amounts held with it. A party can also enforce the award through the courts under the Arbitration and Conciliation Act, as it is treated like a court decree.

Remember the one-line difference: arbitration decides, appeal reviews, conciliation and mediation help the parties settle.

Key formulas to remember

Arbitration outcome: Arbitration → binding award; The arbitrator decides. The parties do not control the result.
Conciliation or mediation outcome: Conciliation / Mediation → settlement only if both agree; The neutral person cannot impose a decision. Failure does not block arbitration.
Appeal time limit: Appeal within the prescribed period from receipt of the award; Time runs from receipt of the award, not from the hearing date. The period is 30 days under the SEBI framework. Confirm it against the current SEBI circular and your latest workbook.
Appellate forum: Appeal → appellate panel of arbitrators, separate from the first panel; It is a fresh panel of the exchange, not the original arbitrator.
Deposit rule: Appellant deposits a prescribed share of the award amount (with a cap) with the exchange; Learn the exact percentage and cap from the current workbook. Do not guess them.
Enforcement: Unpaid award → exchange recovers from member's deposits; court enforcement also possible; An award is enforceable like a court decree under the Arbitration and Conciliation Act.

How to solve Appeal, Conciliation and Mediation questions

Most questions test which process applies, who can use it, within what time, and what happens next. Use this order.

1Read the question and identify the stage: arbitration, appeal, conciliation, mediation or enforcement.
2Ask whether the outcome is binding or only a settlement. Binding means arbitration or appeal. Settlement means conciliation or mediation.
3If the question is about an appeal, check who is appealing and whether the time limit from receipt of the award is met.
4Check whether the appellant has made the required deposit. An appeal without it is not complete.
5If the question is about payment, think enforcement: exchange action against the member and court enforcement.
6Eliminate options that mix up the terms, such as a conciliator giving a binding award, or an appeal going to the same arbitrator.
7Pick the option that matches the rule exactly, including any time limit or condition.

Quickest way: Binding or settlement, then time and deposit

When to use it: Use it for MCQs where two options look similar and you have under a minute.

Underline the process word: arbitration, appeal, conciliation, mediation.
Binding result = arbitration or appeal. Agreed result = conciliation or mediation.
For appeals, look for the prescribed period from receipt of the award (30 days under the SEBI framework; confirm in your workbook) and the deposit condition.
Reject any option where a neutral facilitator is said to decide the dispute.

Common mistakes in Appeal, Conciliation and Mediation

Saying conciliation gives a binding award like arbitration.
Both involve a neutral person and both are called dispute resolution.
Fix: Remember that the conciliator helps, the arbitrator decides. Without agreement, conciliation ends with no result.
Counting the appeal period from the date of the hearing or the dispute.
Students assume all legal time limits start with the event.
Fix: The appeal period runs from the date the party receives the award.
Thinking the appeal goes back to the same arbitrator.
The word appeal is confused with a request to reconsider.
Fix: The appeal goes to an appellate panel of the exchange, separate from the original panel.
Ignoring the deposit requirement for an appeal.
Students focus on the time limit and forget the second condition.
Fix: Link appeal with deposit. The appellant must deposit the prescribed share of the award amount.
Believing conciliation failure ends the investor's remedies.
Students treat conciliation as a final step.
Fix: A failed conciliation or mediation leaves arbitration open to the parties.
Thinking an award needs no enforcement step.
Students assume the member always pays after an award.
Fix: Know that the exchange can recover from the member's deposits and that the award is enforceable through the courts.

Worked examples

Example 1

Which statement about conciliation under the stock exchange dispute mechanism is correct? (A) The conciliator gives a binding award. (B) The conciliator helps the parties reach a settlement and cannot impose one. (C) Conciliation must be completed before the investor files any complaint. (D) A failed conciliation bars the investor from arbitration.

Show the solution

Identify the process: conciliation, a settlement-based method.
Check option A. A binding award is the feature of arbitration, so A is wrong.
Check option B. The conciliator facilitates and the parties decide. This matches the rule.
Check option C. Conciliation is an available option, not a precondition to every complaint, so C is wrong.
Check option D. A failed conciliation leaves arbitration available, so D is wrong.

Answer: (B)

Example 2

An investor receives an arbitral award against her from a stock exchange arbitration panel. Which course of action is correct if she wishes to challenge it? (A) Ask the same arbitrators to rehear the matter at any time. (B) File an appeal before the appellate panel within the prescribed period from receipt of the award, with the required deposit. (C) Go for conciliation, which will replace the award. (D) Wait for the exchange to review it on its own.

Show the solution

Identify the stage: an award has been given, so the question is about appeal.
Check option A. The appeal goes to an appellate panel and there is a time limit, so A is wrong.
Check option B. It names the appellate panel, the time limit from receipt and the deposit. This matches the rule.
Check option C. Conciliation is a voluntary settlement and cannot replace a binding award on its own, so C is wrong.
Check option D. The exchange does not review awards on its own. The party must appeal, so D is wrong.

Answer: (B)

Exam tips

Pair each process with its result: arbitration and appeal are binding, conciliation and mediation are by agreement.
Always tie the appeal time limit to the date of receipt of the award.
Remember appeal and deposit go together. A trap option may mention one and not the other.
Learn the exact deposit percentage and cap from your latest workbook, because they have been revised and options often use close figures.
Negative marking is 25% of the marks for the question in this paper. Skip a question only if you cannot remove at least two options.

Practice questions from Investor Grievances and Arbitration

Appeal, Conciliation and Mediation: frequently asked questions

What is the difference between conciliation and arbitration in NISM?

Arbitration ends in a binding award given by the arbitrator. Conciliation is a settlement process in which a neutral person helps the parties agree. If they do not agree, conciliation produces no decision and arbitration can still be used.

Can I appeal against a stock exchange arbitration award?

Yes. The aggrieved party can appeal to an appellate panel of the exchange within the prescribed time from receiving the award. The appellant must also make the required deposit. Check the current workbook for the exact figures.

Does a failed mediation stop me from going to arbitration?

No. Mediation and conciliation are voluntary options, and a failed attempt leaves arbitration open. The parties lose nothing legally by trying a settlement first.

How is an arbitration award enforced?

The exchange follows up with the member and can recover the amount from the member's deposits and other amounts held with it. The award can also be enforced through the courts, as it is treated like a court decree under the Arbitration and Conciliation Act.