BQ Explains: What Is Mediation? Why Does India Need A New Law?
The bill proposes to make mediation settlement agreements enforceable by law and a council to frame regulations for mediation.
As many as 1,07,08,893 in district and taluka courts. 40,77,604 in high courts. That's the total number of civil cases pending in courts across the country.
High pendency and consequent delays have been key reasons for the rising emphasis and popularity of alternate dispute resolution mechanisms. These include mediation, conciliation and arbitration.
While arbitration has a statutory backing, mediation has been largely governed the Code of Civil Procedure and rules of the mediation centres run by various high courts.
Now, the central government has proposed a draft mediation bill seeking to institutionalise the mediation process in India.
What Does Mediation Entail?
Disputes are resolved in courts whose orders and judgments have legal sanctity and enforceability, with the Supreme Court being the final arbiter of any dispute.
In mediation, it's the parties instead who are encouraged to arrive at a decision with a trained mediator playing the role of a facilitator. The mediator has no powers and the process is completely voluntary and confidential.
Mediation is a sophisticated way of resolving disputes which through the court process may take a number years and further deteriorate the relation between the parties such as in matrimonial cases and family businesses, Senior Advocate and Mediator Rajiv Aggarwal said.
A matrimonial or family business dispute involves people’s relationships and emotions. I have seen instances in courts where people spend their entire life over issues which get resolved in mediation in a matter of days.Rajiv Aggarwal, Senior Advocate
Under Section 89 of The Code of Civil Procedure, 1908, a court can refer parties to alternate dispute resolution mechanism, including mediation, if it believes there's a possibility of mutual settlement.
The parties can also voluntarily opt for mediation.
The high courts run their own mediation centres in collaboration with judges and lawyers. For instance, the Samadhan initiative of the Delhi High Court started in 2006. The centre serves as a resource centre and has trained mediators to help parties resolve disputes.
‘No Dispute Which Cannot Be Settled By Mediation’
The scope of mediation in India covers a wide range of civil disputes which include matrimonial cases; consumer issues; business contracts and transactions; industrial disputes; banking and insurance matters among others.
Mediation can be a very effective tool to settle disputes within an industry through respected leaders of that industry acting as mediators, pointed out Anand Desai, managing partner at DSK Legal.
As lawyers, we may be well versed with the law but it takes us time to familiarise ourselves with the intricacies of a specific industry. A respected industry leader instead would take far less time to analyse the core of the dispute and suggest solutions and settlement.Anand Desai, Managing Partner, DSK Legal
Not just commercial and civil disputes, mediation has been attempted in some politically and socially sensitive cases as well.
These include the Ayodhya land case and disputes between the protestors and some Delhi residents who complained of traffic disruptions. Neither of them, however, could be resolved via mediation.
It's important to remember that there is a specific time in the dispute resolution process when mediation should be attempted, said Aggarwal.
When you initiate mediation in a 70-year-old dispute, parties have already taken firm positions. Similarly, if you start mediation at the beginning of a litigation, the parties are usually charged up for a fight. Therefore, the right time to attempt mediation is when parties have had their initial run with the litigation procedure and they begin to see the benefits of mutual settlement.Rajiv Aggarwal, Senior Advocate
One area however where mediation can be scaled up is government disputes, according to Aggarwal. The government and its agencies are the biggest litigators in the country.
But typically, government officials hesitate to take a decision and prefer to follow the traditional route of approaching courts, he said.
Purely going by the scale of government litigation in the country, one can imagine the burden that would ease on courts if the government departments take more initiative towards mediation and settle the disputes.Rajiv Aggarwal, Senior Advocate
The Draft Bill
The Mediation Bill, 2021, is aimed at creating a standalone law to govern domestic and international mediation.
The key features of the bill include:
Pre-litigation mediation with provision to approach courts for seeking urgent relief.
Making successful outcome of mediation enforceable by law and specifying the grounds of challenge.
Setting up a Mediation Council of India.
Process of community mediation.
The move has been welcomed by legal experts with a word of caution.
There are certain laws such as Companies Act which are technical and cannot be simplified beyond a point, Desai pointed out. But for a process like mediation to become very formal and prescriptive may not be the best approach, he said.
The draft bill appears very prescriptive, which could give rise to litigation on interpretation of various provisions. The law seems very similar to the Arbitration Act. And one has seen how many arbitral awards are challenged in the courts today.Anand Desai, Managing Partner, DSK Legal.
The bill also specifies disputes which may not lend themselves to the mediation process:
Specific allegations of fraud, fabrication of fraud, forgery, fabrication of documents.
Non-compoundable criminal offences except when a court permits mediation.
Complaints before statutory authorities, or misconduct by professionals such as lawyers, doctors etc.
Disputes which have the effect on rights of a third party who are not a party to the mediation proceedings.
Cases related to the jurisdiction of Competition Commission of India; Securities and Exchange Board of India, Telecom Dispute Settlement and Appellate Tribunal etc.
Finally, a mediated settlement signed by the parties and authenticated by the mediator will be enforceable in law. Such an agreement can be challenged on only four grounds which include:
Fraud.
Corruption.
Gross impropriety.
Impersonation.
The challenge has to be made within three months of the party receiving the agreement. The guidelines and regulations for the conduct of mediation have to be determined by the Mediation Council of India.