The introduction of section 89 of the Code of Civil Procedure, 1908 in 1999
amendment , gave propulsion to the Indian judicial system to use several
alternative modes for dispute resolution. Alternative dispute resolution (ADR)
is playing a vital role in lightning courts burden. Mediation is one of the
mechanisms of ADR, which is gaining prestige throughout the country. In this
article, the author will endeavour to elucidate the concept of mediation, steps
involved in it, and laws related to it with a focal point on the recently passed
act, i.e., The Mediation Act, 2023 . Also, the article revolves around the
dynamic concept of pre-mediation with the help of provisions and cases.
Challenges in Mediation Act will be discussed in last with a valedictory
statement.
Introduction
Mediation is one of the forms of Alternative Dispute Resolution (ADR) in which a
neutral third party, known as Mediator, is regarded as unbiased and resolves the
conflict between two parties through mutual and voluntary agreement. The main
objective of mediation is to reduce hostility and enmity between the conflicting
parties and provide a pragmatic solution that is in favour of both. The role of
the mediator is to facilitate the parties and bring them into a situation where
they break their standstill and stalemate dialogue and enter into efficacious
and constructive dialogue.
However, the process is voluntary, which means that
any party can withdraw from it at any time they wish. Practically, it is very
rare. The backlog of cases in the judicial system of India is the reason for
gaining importance of mediation and other ADR. When mediation is compared with
litigation, it is economical, flexible, simple, and time-saving. The process of
mediation is confidential, as the issue and conflicts are not known to the
public or any other person except the mediator.
Steps involved in Mediation
There are various steps involved in the process of mediation which is discussed
in the following points:
- Appointment of mediator is done under section 8 of the Mediation Act with mutual consent of the parties. Prior to this act also, mutual consent was necessary.
- Opening Statement by the mediator is given to brief the purpose, benefits, and rules of the mediation. In simple words, the opening statement is done to make the parties comfortable and to develop a credible bond between the mediator and the parties.
- Joint session is the next step after the opening statement. In the joint session, both parties present their points and issues in front of the mediators. They are not bound by timing. It is a crucial step in the process of mediation to settle disputes.
- Caucus (Individual Session) is conducted after the joint session. In this process, the mediator tries to understand the problems of each party separately. The goal of having these one-on-one meetings with each party is to encourage them to divulge any additional information that they would not often be able to discuss in front of another party. This step gives an opportunity to the mediator to further explore the issue in detail. The process of caucus can be repeated three to four times by the mediator.
- Agreement and settlement through a mutually agreed agreement is the final stage of mediation. It includes every aspect of the dispute leaving no scope for further confusion. Finally, this settlement agreement will be valid only when both parties duly sign it.
Laws regarding Mediation in India
There was no law or act that specifically dealt with mediation until the passing
of 'The Mediation Act, 2023'. Therefore, mediation is unpopular in the
population of India, and people go for litigation for every small matter, which
eventually increases the burden on the judiciary. This becomes the reason for
the pending cases in court. All civil and private concerns can be resolved
through mediation without even disclosing the facts or issues to the public or
any other person except the mediator.
After hearing the parties' arguments and
concerns, the mediator offers a plan for resolving the disagreements, bringing
the parties together, and preserving goodwill. It can prove to be faster, more
effective, and more economical than the other adjudicative process. However,
people hesitate to pursue ADR over litigation because they are unaware of the
benefits of the mediation process. There are certain statutory provisions
relating to the mediation process other than the recently passed Mediation Act,
2023.
The following provisions are discussed:
- Section 4 of the Industrial Dispute Act, 1947 empowers the appropriate government to appoint conciliators for mediating and promoting the settlement of industrial disputes.
- The Hindu Marriage Act, 1955 and the Special Marriage Act, 1954 require courts to first provide mediation between parties in cases of dispute regarding marriages and divorces.
- Section 89(1)(a) of the Code of Civil Procedure, 1908 provides for the settlement of cases outside the court of law. Courts refer the parties for ADR if an element of settlement appears. In simple words, it was introduced to give the courts the authority to refer cases to alternative dispute resolution (ADR), thereby lightening the workload.
- Section 42 of the Companies Act, 2013, along with the Companies (Mediation and Conciliation) Rules, 2016, provides for the referral of disputes to mediation by the National Company Law Tribunal and the National Company Law Appellate Tribunal.
- Section 12 of the Commercial Courts Act, 2015, which was last amended in 2018, provides for pre-institution mediation and settlement.
- Chapter V of the Consumer Protection Act is devoted to mediating conflicts before approaching a consumer redressal agency.
- Other acts such as the Arbitration and Conciliation Act, MSME Act, and Real Estate Act include provisions for mediation in one way or another. Even the 129th Law Commission of India Report recommends that courts refer disputes for mediation compulsorily.
- In the case of 'Afcon Infrastructure Ltd. v. Cherian Varkey Construction Co. (P) Ltd.,' the Supreme Court observed that unless a case falls under a recognized excluded category (e.g., criminal offences, serious allegations of fraud, fabrications of documents, representative suits under Order 1 Rule 8 CPC), the reference to ADR is a must.
- In the Winter Session of 2021, a mediation bill was introduced but was not passed. Finally, the Mediation Act was passed in 2023.
Mediation Act, 2023
After the mediation bill passed by both houses received the assent of the
President on 14th September 2023 and has been enacted by the Central Government
as "The Mediation Act of 2023", extending to the whole of India. The main object
of the act is to assist, promote and facilitate mediation, especially
institutional mediation. This Act is the biggest breakthrough in the Alternative
Dispute Resolution (ADR). 11 chapters, 65 sections and 10 schedules are there in
this Act.
Key Features of the Act:
This act recognises pre-litigation mediation on a voluntary basis for resolving
disputes before bringing a civil or commercial matter to the litigation. Section
5 of the act allows the party to go for mediation before filing lawsuit in a
court. The purpose of this provision is that the pendency of cases in courts may
decrease.
Under section 2 of the act, applicability of the legislation is mentioned. It is
applicable when apply to mediations conducted in India (a) involving only
domestic parties, (b) involving at least one foreign party and relating to a
commercial dispute, (c) if the mediation agreement states that mediation will be
as per this Act.
Chapter VIII of the act empowers the government to notify mediation council of
India to perform the duties and discharge the functions which is given under the
act 21.
Under section 30 of Chapter VII of the act specifies the provision for online
mediation with the written consent of both the parties. The online mediation can
be in both audio and video call form. The mediator here plays an important role
in maintaining confidentiality and certain steps can be taken to preserve
confidentiality.
Under section 43 of Chapter X of the act provides for the community mediation.
Community mediations are introduced to settle conflicts that are likely to
disrupt peace, harmony, and serenity among residents or families in any region
or neighbourhood. Prior mutual consent of the parties to the dispute must be
there.
This Act is the biggest breakthrough in alternative dispute resolution (ADR). It
will encourage people to go for mediation before litigation. There are several
myths regarding ADR in the minds of people, like participating in private
mediation means waiving the right to future legal action in court, a private
mediation settlement is not recognized by courts if parties dishonour terms,
private mediators are not recognized by courts since they are not trained by the
court, mediation settlement is not confidential and some other myths. All the
myths regarding mediation will be busted out with the provisions of the
Mediation Act, 2023. This act will foster mediation in Indian society.
Dynamic Concept Of Pre-Mediation
Pre-Mediation is a process where parties attempt to settle disputes through
mediation before approaching any court or tribunals. Here, the parties can
approach court if the dispute is not settled amicably. According to the 129th
law commission report that the pre-mediation is compulsory and in case of
Afcon Infrastructure Ltd. v. Cherian Varkey Construction Co. (P) Ltd.,
Supreme Court observed that all the cases related to trade, commerce, consumer
dispute, tortious liability, and contracts can be solved by mediation instead of
filing litigations. Here, the main question is that the process of mediation is
voluntary but with the above mentioned report and case laws, the process of
mediation is becoming mandatory.
In case of
Patil Automatic Private Limited and others v. Rakheja Engineers
Private Limited, it was held by the court that in cases where no urgent
interim relief is sought by the concerned parties then the pre requirement
mediation institution is mandatory under section 12A of the Commercial Courts
Act, 2015. It was also held in this case that section 89 of CPC does contemplate
mediation ordered by the court but section 12A of commercial act, 2015 does not
contemplate mediation without any involvement of the court as it is done prior
to the institution of the suit.
However, the above judgments were passed prior to the Mediation Act, 2023.
Section 6 of the Mediation Bill, 2021, mandated pre-mediation before the
institution of a lawsuit in a court, regardless of whether a mediation agreement
is in place before bringing a civil or commercial lawsuit in any court.
Nevertheless, this provision was objected to by the stakeholders as well as
legal experts and regarded as a denial of justice where the parties are
unwilling to mediate. Further, the object of mediation is voluntary resolution,
and therefore parties cannot be compelled to participate in mediation
involuntarily. Parliamentary standing committee considered the concerned. Now,
under Section 5(1) of the Mediation Act provides that irrespective of any
mediation agreement, the parties may voluntarily, and with mutual consent, refer
the dispute for settlement by mediation before filing any case of civil or
commercial nature in any court.
This excludes commercial disputes of specified value that are subject to
compulsory pre-litigation mediation under the Commercial Courts Act, 2015.
Further, any court or tribunal may at any stage of a proceeding, refer the
parties to undertake mediation, irrespective of whether there is a mediation
agreement or not.
Challenges in Mediation Act
Although the Act includes several progressive provisions that have the potential
to institutionalize mediation as a desirable and practical method of resolving
disputes, there are certain subtleties that need to be carefully considered.
The first schedule of the Act which consists of several disputes 'are not fit
for mediation'. It is one of the complexities as many of the disputes listed in
the first schedule are amenable to mediation and there is no point in putting
statutory restrictions on mediating these disputes.
Under section 18 of the act, time limit has been introduced for the swift and
expeditious dispute resolution. However, Mediation being purely consensual
process giving every right to one or all the parties to withdraw from the
mediation. Experts argue that the restriction of time limit hampers the freedom
of the parties to continue with the process if they feel the need for it.
Section 5(1) of the Mediation Act states: "(1) Subject to other provisions of
this Act, whether any mediation agreement exists or not, the parties before
filing any suit or proceedings of civil or commercial nature in any court, may
voluntarily and with mutual consent take steps to settle the disputes by
pre-litigation mediation in accordance with the provisions of this Act". This
brings us to the question as to why the parties need an additional step of
mutual consent even if a valid mediation agreement already exists.
Conclusion
Mediation Act marks a significant step in the arena of Alternative Dispute
Resolution. Several provisions of the act have been notified by the ministry of
law and justice in October 2023 . While others will be notified. The traditional
system of disputes has been engrained in the minds of Indian society. There is a
need for judicial bodies to encourage and spread awareness about the benefits of
mediation. Legal experts and academicians should also pen down their creative
thoughts for making the most of mediation.
The standard of the mediation to be maintained while framing the rules and
policy of this act. The government should take some necessary steps to spread
awareness, as litigation is engrained in the minds of people as a legitimate
form of dispute resolution. The Mediation Act is a positive step in encouraging
disputants to consider quick, voluntary, and effective ways of resolving their
differences by removing social, cultural, and legal impediments.
Award Winning Article Is Written By: Mr.Syed Umar Asdaque
Authentication No: AG422408239497-11-0824 |
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