Madras HC Rules Arbitration Can’t Bypass Credit Dispute Resolution Process in CIBIL Cases

The Madras High Court has clearly stated that people or companies must first try to solve credit score-related problems through the official CIBIL dispute process before taking the matter to arbitration. The court made this decision while hearing a case involving a disagreement over a credit report entry that affected a person’s credit score.

CIBIL (Credit Information Bureau (India) Limited) is a credit information company that collects and maintains records of individuals’ and companies’ payments related to loans and credit cards. If someone finds an error in their credit report, they can file a complaint using CIBIL’s online dispute resolution system. The system allows individuals to correct wrong information before it causes more problems.

In this case, the person involved went directly to arbitration without using CIBIL’s built-in process to fix the credit dispute. The court disagreed with that move. It said that CIBIL provides a specific method to handle complaints, and people should follow that method first. Only if that method fails can they move on to arbitration.

The court explained that the CIBIL dispute system exists to handle such issues quickly and effectively. Ignoring that process can lead to unnecessary legal steps, higher costs, and wasted time. The judge emphasized that parties must respect the steps laid out in the law before using alternative dispute methods like arbitration.

This ruling is important because it sets a clear rule: You must try all official channels to solve credit report problems before going to other legal options. It helps make sure that people use the simpler, faster solutions available to them first.

Legal experts believe this decision will prevent misuse of arbitration and reduce the number of unnecessary legal cases. It also gives more importance to the official credit complaint systems like CIBIL’s, which aim to protect both consumers and lenders.

In short, if your credit report has an error, the court now expects you to use CIBIL’s dispute resolution process first—before taking your case to an arbitrator.