MEDIATION BILL
Context
The Parliamentary Standing Committee on Law and Justice has recommended substantial changes to the Mediation Bill.
The panel has particularly cautioned the Centre against making pre-litigation mediation compulsory.
Key Points
- Alternate dispute resolution (ADR) refers to how disputes are settled outside the traditional court system.
- In India, modes of ADR include arbitration, negotiation, mediation and Lok Adalats.
- Mediation is a voluntary process in which parties try to settle disputes with the assistance of an independent third person (the mediator).
- A mediator does not impose a solution on the parties but creates a conducive environment in which they can resolve their dispute.
- The mediation process depends on the choice of parties and there are no strict or binding rules of procedure.
- The benefits of mediation include its voluntary and non-adversarial nature.
- The flexibility and confidentiality of the process, its speed and cost-effectiveness and the finality of consensual settlements.
- As a mode of ADR, mediation may also help reduce the case burden on courts.
- Various Countries including Australia, Singapore and Italy have standalone laws on mediation.
Mediation in India
At present, mediation in India may be:
- Court referred (Courts may refer cases to mediation under the Code of Civil Procedure, 1908)
- Private (For instance, under a contract having a mediation clause) or
- As Provided under a specific statute (such as the Commercial Courts Act, 2015, the Consumer Protection Act, 2019, or the Companies Act 2013).
- Mediation services are provided by private ADR centres or mediation centres, as well as centres set up by courts or tribunals (Known as Court-annexed mediation centres).
- As per data published by the National Legal Services Authority for the year 2021-22, India had 464 ADR Centres (397 functional), 570 mediation centres and 16,565 mediators and nearly 53, 000 cases were settled through mediation.
Highlights of the Bill
The Bill requires persons to try to settle civil or commercial disputes through mediation before approaching any court or tribunal.
A party may withdraw from mediation after two mediation sessions.
The mediation process must be completed within 180 days, which may be extended by another 180 days by the parties.
The Mediation Council of India will be set up. Its functions include registering mediators and recognising mediation service providers and mediation institutes (which train and certify mediators).
The Bill lists disputes that are not fit for mediation (such as those involving criminal prosecution or affecting the rights of third parties). The Central government may amend this list.
If the parties agree, they may appoint any person as a mediator.
If not, they may apply to a mediation service provider to appoint a person from its panel of mediators.
Agreements resulting from mediation will be binding and enforceable in the same manner as court judgments.
Key features
Pre-litigation mediation: Parties must attempt to settle civil or commercial disputes by mediation before approaching any court or certain tribunals. Even if they fail to settle through pre-litigation mediation, the court or tribunal may at any stage refer the parties to mediation if they request for the same.
Disputes not fit for mediation: The Bill contains a list of disputes which are not fit for mediation. These include disputes:
- Relating to claims against minors or persons of unsound mind,
- Involving criminal prosecution and
- Affect the rights of third parties.
The central government may amend this list.
Applicability: The Bill will apply to mediations conducted in India:
- Involving only domestic parties
- Involving at least one foreign party and relating to a commercial dispute (i.e. international mediation) and
- If the mediation agreement states that mediation will be as per this Bill.
If the central or state government is a party, the Bill will apply to
- Commercial disputes and
- Other disputes as notified.
Mediation process: Mediation proceedings will be confidential and must be completed within 180 days (may be extended by 180 days by the parties). A party may withdraw from mediation after two sessions. Court annexed mediation must be conducted as per the rules framed by the Supreme Court or High courts.
Mediators: Mediators may be appointed by: (i)The parties by agreement or (ii)A mediation service provider (an institution administering mediation). They must disclose any conflict of interest that may raise doubts about their Independence. Parties may then choose to replace the mediator.
Mediation Council of India: The central government will establish the Mediation Council of India. The Council will consist of a chairperson, two full-time members (with experience in mediation or ADR), Three ex-officio members (including the Law Secretary and the Expenditure Secretary) and a part-time member from an industry body.
Functions of the Council include:
(i) Registration of mediators and
(ii) Recognising mediation service providers and mediation institutes (Which train, educate and certify mediators).
Mediated settlement agreement: Agreements resulting from mediation (other than community mediation) will be final, binding and enforceable in the same manner as the court judgments.
They may be challenged on the grounds of
(i) fraud,
(ii) corruption,
(iii) impersonation or
(iv) relating to disputes not fit for mediation.
Community mediation: It may be attempted to resolve disputes likely to affect the peace and harmony amongst residents of a locality. It will be conducted by a panel of three mediators (may include persons of standing in the community and representatives of resident welfare associations).
Key Issues and Analysis
- The Bill makes participation in pre-litigation mediation mandatory. Mediation is a voluntary dispute resolution process. The question is whether it is appropriate to mandate parties to attempt pre-litigation mediation. On one hand, this could lead to more out-of-court settlements and reduce the pendency in courts. On the other hand, mandating mediation goes against its voluntary nature.
- The Mediation Council, established to regulate the profession of mediators, may not have representation practising mediators with adequate experience. This is unlike other professional regulators such as the Bar Council of India.
- The Mediation Council requires prior approval from the Central government before issuing regulations related to its essential functions. It is not clear why such prior approval is required. This may also be questioned since the central government may be a party to mediations.
- The Bill applies to international mediations only if they are conducted in India. It does not provide for enforcement of settlement agreements resulting from international mediation conducted outside India.
Various Opinions on the Bill
| The Good | The Bad | The Sad |
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It is expected that this Bill would make India a hub for international mediation in the commercial disputes field and indeed institutions are being opened for this purpose. |
We can not get our act together to get the Mediation Bill in good shape and all stakeholders can not get this Bill together.
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| The Bill acknowledges the importance of institutes training mediators and service providers to provide structured mediation under their rules. | Exactly the reverse may happen. Because the Bill unwisely treats international mediation when conducted in India as domestic mediation. | Mediators, lawyers and judges have applied their minds to a considerable degree. |
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It provides for pre-litigation mediation. This is quite a remarkable step but is designed to be easy to implement.
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To be fair to the government it did call for comments on the draft Bill.
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The drafting mismatch is not remedied, dreams of our robust hubs and ease of doing business in India are neatly nipped in the bud.
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What is missing is the element of focused and engaged discussion after comments are sent.
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| If any urgent interim order is needed, they can bypass mediation at the first and return to it after resolving the interim relief issue. |
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It is as though a wall has been erected and no one knows what is going to emerge.
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| It recognises online dispute resolution, a process that is going to move mediation from the wings to centre stage in a world where COVID-19 has changed. |
This Bill will be unique where a profession is being regulated without a single professional on the regulator.
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We all have a common purpose; to place mediation strongly in our legal landscape and place India prominently in the World's mediation landscape.
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It provides for enforcement of commercial settlements reached in international mediation viz between parties from different countries as per Singapore Convention on Mediation to which India was a notable signatory.
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One more lapse is the field of dispute resolution, the judiciary's domain, so how come the Chief Justice Of India is not in the picture for making appointments? |
Even if it takes more discussion and consideration amongst all stakeholders, let that be done. It is for Parliament now to do the needful. we should not settle for less.
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| The Convention assures disputants that their mediation settlements will be enforced without much difficulty across the world, unlike the fresh headaches that the litigation decree or arbitration award present at the time of enforcement. |
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