Mediation Bill: Not getting the Act together

News: The Ministry of Law and Justice has placed the Draft Mediation Bill, 2021 in public domain seeking feedback and suggestions from all stakeholders.

What is the significance of the bill?

Firstly, it recognises that mediation has to be treated as a profession. This is a significant development compared to the previous mediated schemes.

Secondly, it acknowledges the importance of institutes to train mediators, and service providers to provide structured mediation under their rules.

Thirdly, it’s designed for easy implementation. Parties are required to have at least one substantive session with the mediator where the process is explained to them. Thereafter, they are free to continue or terminate the mediation and follow the litigation path if they so decide.

Further, if any urgent interim order is needed, they can bypass mediation at the first stage and return to it after resolving the interim relief issue.

Fourthly, it does away with the confusion arising from using both expressions “mediation” and “conciliation” in different statutes.

The bill has defined mediation widely in accordance with international practice.

Conciliation has been included under the wider definition of mediation.

Fifthly, it provides for enforcement of commercial settlements reached in international mediation as per the Singapore Convention on Mediation

What are the concerns associated with the bill?

Firstly, it treats international mediation, when conducted in India, as a domestic mediation. This will have the following implications:

It would hamper India’s dream to become a hub for international mediation in the commercial disputes field. Because, the settlement under the domestic mediation is given the status of a judgment or decree of a court.

– This will be good for cases between Indian parties, but disastrous when one party is foreign.

The reason is that the Singapore Convention does not apply to settlements which already have the status of a judgment or decree. Accordingly, if cross-border mediation is conducted in India, parties may lose out on the tremendous benefits of worldwide enforceability. So, parties are forced to go elsewhere other than India to conduct mediation.

– If this drafting mismatch is not remedied, dreams of becoming robust hubs and ease of doing business in India will be impaired.

Secondly, the governing mechanism is flawed. The Council has three members, a retired senior judge, a person with experience of Alternative Dispute Resolution (ADR) law and an academic who has taught ADR. However, it doesn’t have a single mediator.

Thirdly, the bill provides for a long list of disputes which should not be mediated. By doing so, it provides that any settlement of disputes involving them needs the court’s approval there by denying the possibility of a beneficial mediated settlement in these cases.

For example, Fraud, Disputes relating to claims against minors, Patents and copyright cases, proceedings before the TRAI etc.

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Source: This post is based on the article “Mediation Bill: Not getting the Act together” published in The Hindu on 8th Dec 2021.

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