Mediation Bill: Salient Provisions, Potential Challenges and the Way Forward – Explained, pointwise

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Introduction

The Chief Justice of India (CJI), while speaking at the India-Singapore Mediation Summit in July 2021 has said that mediation should be made mandatory as the first step in dispute resolution and that a law should be framed in this regard.  In December 2021, the CJI, while addressing the International Arbitration and Mediation Centre (IAMC) at the Hyderabad, said that courts should be the last resort for dispute resolution; therefore, one should explore the options of alternate dispute resolution(ADR).

The Mediation Bill, 2021 was introduced in Rajya Sabha in December 2021. It seeks to promote mediation (including online), and provide for enforcement of settlement agreements resulting from mediation. The bill has been referred to a standing committee.

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What is Mediation?

Mediation is a form of alternative dispute resolution (ADR). It is a way of resolving conflicts where two or more parties decide to reach an agreement with the support of a third, neutral party that guides them through the process.

What are the salient provisions of the Mediation Bill, 2021?

First, The Bill 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.

Second, the Bill proposes pre-litigation mediation. At the same time, it safeguards the interest of the litigants to approach the competent adjudicatory forums/courts for urgent relief.

Third, the successful outcome of mediation in the form of a Mediation Settlement  Agreement (MSA) has been made enforceable by law.

Fourth, the mediation process protects the confidentiality of the mediation process and provides for immunity in certain cases against its disclosure.

Fifth, The Settlement Agreement could be registered with State/District/Taluk Legal Authorities within 90 days to ensure maintenance of authenticated records of the settlement so arrived.

Sixth, the Bill provides for the establishment of the Mediation Council of India.

Why does India need to promote Mediation?

No standalone legislation: In India, though mediation finds legitimacy in some specific laws such as the Code of Civil Procedure, 1908, the Arbitration and Conciliation Act, 1996, the Companies Act, 2013, the Commercial Courts Act, 2015, and the Consumer Protection Act, 2019; there is no standalone legislation as yet.

Success of Mediation: The Tamil Nadu Mediation and Conciliation Centre is an initiative of the Madras High Court and it provides India’s first court-annexed facility with a mediation centre in every district. It was inaugurated in 2005 has significantly reduced the pendency of referred cases.

To fulfil India’s commitment to Singapore Convention on Mediation: India is a signatory to the Singapore Convention on Mediation (United Nations Convention on International Settlement). Hence, it is appropriate to enact a law on issues of domestic and international mediation.

Read more: Lok Sabha gives nod to arbitration Bill
What are the advantages of the Mediation Bill, 2021?

Strengthening of Alternative Dispute Resolution (ADR): The bill would facilitate quick disposal of disputes, outside of traditional court systems.

Mediation results in the amicable resolution of disputes in civil, commercial, family, and matrimonial affairs. It helps develop a collaborative approach, reduces the burden on the courts, and protects relationships between disputants.

Impact on doing business: The legislation has the potential to have a significant positive impact on the country’s economy and business environment by avoiding delays in the standard process through the courts.

Interests of all stakeholders: Enacting a comprehensive law and allowing for online mediation may serve the interests of all stakeholders as an effective alternative dispute resolution mechanism.

Improve law and order situation and encourage compounding of criminal offences: The Bill provides that ‘any dispute likely to affect peace, harmony and tranquillity amongst the residents or families of any area, may be settled through community mediation. Also, the courts can refer any dispute related to compoundable offences or civil matrimonial offences for mediation.

Thus if any of the above disputes is resolved through mediation, it may lead to compounding of a criminal offence arising out of that civil or commercial dispute. Hence, it can relieve some of the pressure on law enforcement agencies.

Note: Compoundable offences are those offences where, the complainant (one who has filed the case, i.e. the victim), enter into a compromise, and agrees to have the charges dropped against the accused.

 

Read more: Encouraging mediation to settle disputes
What are the concerns associated with the Mediation Bill, 2021?

Impacts cross-border mediation: The Bill treats international mediation when conducted in India as a domestic mediation. Further, the settlement conducted in India is given the status of a judgment or decree of a court.

But, the Singapore Convention does not apply to settlements that already have the status of a judgment or decree. Hence, conducting cross-border mediation in India will leave out the tremendous benefits of worldwide enforceability.

Doesn’t have a single mediator: The Mediation 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.

Excludes the Chief Justice of India from making appointments: The mediation is a form of dispute resolution and in the judiciary’s domain, but the bill has left the Chief Justice of India from the picture for making appointments.

Disputes not to be mediated: 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, thereby 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.

Read more: Mediation Bill: Not getting the Act together
What can be done to improve mediation in India?

Need to remove ambiguity: The are certain elements in the Bill which are open-ended and ambiguous, which must be addressed urgently.

Ensure proper cross border mediation: To ensure worldwide enforceability, the settlement conducted in India should not be given a status of a judgment or decree of a court.

Ramp-up infrastructure: India does not have enough infrastructure for mandated mediation, such as a number of mediators, mediation centres, etc. The government has to facilitate them for smoother mediation.

Enhance awareness: The National and State Legal Services Authorities should disseminate more information regarding mediation and ADRs, so that they become the first option explored by potential litigants.

Alternate Dispute Resolutions has proven successful in clearing the backlog of cases in various levels of the judiciary – Lok Adalats alone has disposed more than 50 lakh cases every year on average in the last three years. A similar impact can be observed with Mediation also. Hence, the government should address the concerns in the mediation bill and ensure proper implementation of the same.

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