India is a massive country. It has a big population. The people’s economic pursuits have also significantly risen during the past several decades. People naturally have to deal with a lot of litigation while handling numerous social, economic, and everyday issues. The judiciary is overburdened as a result of the increase in litigation. Because of this, people now have access to Alternative Dispute Resolution (ADR) mechanisms including arbitration, conciliation, and mediation to help them solve their conflicts.
HIGHLIGHTS OF THE BILL
Alternative dispute resolution (ADR) is a term used to describe methods for resolving conflicts that do not involve the traditional judicial system. Arbitration, negotiation, mediation, and Lok Adalats are ADR techniques used in India. By a voluntary procedure called mediation, parties attempt to resolve disagreements with the aid of a neutral third party (the mediator).
Instead of forcing a resolution on the parties, a mediator creates an atmosphere where they may work out their differences. There are no rigid or legally-binding rules of procedure in mediation; it is up to the parties to decide how it will go. The voluntary and non-adversarial nature of mediation, the process’ flexibility and discretion, the speed and cost-effectiveness of it, and the finality of agreed-upon settlements are all advantages.
A committee led by Shri Niranjan Bhat was established by the Supreme Court in January 2020 to write mediation laws. It was then forwarded by the Supreme Court as a proposal to the Union Government. Based on this, the Government put the drafted Mediation Bill for Public Feedback on their website on November 5, 2021. The Mediation Bill, 2021 was then introduced by the government in the Rajya Sabha on December 20, 2021, and it was referred to the department-related Parliamentary Standing Committee on Personnel, Public Grievances, Law & Justice for review on December 22, 2021. On July 21, 2022, the Committee presented its report to the Parliament.
The Indian justice system is not new to the idea of mediation. It has been used for generations under the Panchayat system, in which revered village elders acted as mediators and assisted in settling disputes between the parties. Villages still use this type of conventional mediation today.
Businessmen favoured mediation during the pre-colonial era as well. Members of the business group asked impartial and reputable businessmen known as Mahajans to settle conflicts using a non-binding process that blended mediation and arbitration. Eventually, the British established an alternative dispute resolution (ADR) system in India to resolve disagreements involving public utility service problems, labour disputes, and conflicts between government agencies and companies.
Nowadays, mediation in India can take one of three forms: (i) court-referred (under the Code of Civil Procedure, 1908, judges can refer matters to mediation), (ii) private (for instance, under a contract with a mediation provision), or (iii) as specified by a special legislation (such as the Commercial Courts Act, 2015, the Consumer Protection Act, 2019, or the Companies Act, 2013).
The introduction of Section 89 via the CPC amendment in 2002 provided mediation in India a boost. However, the Supreme Court emphasised several ambiguities or drafting mistakes under Section 89 of the CPC in Afcons Infrastructure Ltd. v. Cherian Varkey Construction Co. (P) Ltd., such as the lack of clarity about the usage of phrases like “judicial settlement” and “mediation.”
The proper stage for sending the issue to mediation is not covered by the clause. Also, there are no standardised procedural standards that apply to mediation, therefore sessions follow the guidelines established by each Supreme Court. Private ADR and mediation centres, as well as those established by courts or tribunals, offer mediation services (known as court annexed mediation centres).
According to information from the National Legal Services Authority for the years 2021–2022, India has 570 mediation centres, 16,565 mediators, 464 ADR centres (397 of which were operational), and over 53,000 cases were resolved through mediation. Several nations, like Australia, Singapore, and Italy, have their own laws specifically governing mediation.
The Supreme Court (2019) and the High Level Committee to Review the Institutionalisation of Arbitration Mechanism in India have both suggested that a separate law governing mediation be enacted in India (2017). A committee established by the Supreme Court in 2020 had furthermore suggested and drafted a piece of umbrella legislation to grant mediation-based dispute resolution validity.
OBJECTIVE OF THE BILL
The Mediation Bill, 2021 aims to support mediation, especially institutional mediation, and offer a way to enforce settlement agreements reached through mediation. The Standing Committee on Personnel, Public Grievances, Law and Justice has been given the bill.
The MSME Act of 2006, the Industrial Relations Code of 2020, and other legislation, among others, include provisions for mediation as a method of dispute resolution. Pre-litigation mediation is still uncontrolled even under these Laws, however the post-litigation situation in instances covered by these statutes is managed by the CPC.
Particular emphasis must be paid to Section 12A of the Commercial Courts Act, which mandates pre-litigation mediation in all matters before the commercial courts, with the exception of those requiring immediate relief. Unfortunately, parties have attempted to abuse the exclusion to avoid mediation, which has prevented the rule from accomplishing its intended purpose.
FEATURES OF THE BILL
Pre-litigation mediation under Clause 6: Before going to court or some tribunals, parties must seek to resolve their civil or business problems through mediation. The court or tribunal may refer the parties to mediation at any time if they desire it, even if pre-litigation mediation fails to result in a settlement. Moreover, it states that pre-litigation mediation for commercial disputes of a certain value must be conducted in line with section 12A of the Commercial Courts Act of 2015 and the rules created thereunder.
Disputes unfit for mediation under Clause 7: A list of conflicts that are unsuited for mediation is included in the Bill. They include conflicts involving claims made against minors or people who are not of sound mind, criminal prosecution, and third-party rights. Settlement arrived in these cases not to have effect of judgement or decree of Court. The Central Government may, by notification, amend this list.
Indian Mediation Council under clause 33 & 40: The Indian Mediation Council will be established by the national government. A chairperson, two full-time members (with mediation or ADR expertise), three ex-officio members (including the Law Secretary and the Expenditure Secretary), and a part-time member from an industry association will make up the Council. The Council’s duties include: (i) registering mediators (ii) recognising mediation service providers and institutes. The Indian Mediation Council’s goals include, among others, promoting mediation, making India a strong centre for domestic and international mediation, creating rules for mediator registration, ranking mediation service providers, defining standards for recognising mediation institutes and service providers, holding training workshops and courses in the field of mediation, etc.
Online Mediation under Clause 32: During the COVID 19 epidemic, the idea of online dispute settlement has gained popularity. Internet mediation provides swift justice in an economical way. The Committee observes that the immediate measure only includes a provision for online mediation. The Committee advises that specific provisions and modalities for online mediation should be suitably integrated in the Bill while keeping in mind the evolving requirements.
Mediated settlement agreement: Other than community mediation, agreements reached through mediation will be final, binding, and enforceable in the same way that court judgements are. These might be contested for the following reasons: (i) fraud; (ii) corruption; (iii) impersonating or (iv) pertaining to issues that are unsuitable for mediation.
Applicability of Bill under Clause 2: The Bill will be applicable to mediations held in India if they (i) involve only domestic parties, (ii) involve at least one foreign party and are related to a commercial dispute (i.e., international mediation), and (iii) if it is explicitly stated in the mediation agreement that the Bill will apply to the mediation. The Bill will apply to (a) business disputes and (b) other disputes as notified if the federal or state governments are parties. The kind of conflicts that can be submitted to mediation must be made public before mediation can be used to resolve disputes, other than commercial disputes, in which the Central Government and State Governments or its agency, entity, etc. are parties.
Time Limit for completion of Mediation under Clause 21: The mediation process will be private and must be finished in 180 days from the date fixed for the first appearance before the mediator and the period can be extended by further period of one hundred and eighty days with the mutual consent of the parties. After two sessions, a side may leave the mediation. The regulations established by the Supreme Court or High Courts must be followed when conducting court-annexed mediation.
Conduct of Mediation under Clause 17: According to the Bill, the mediator must support the parties in their efforts to settle their dispute amicably in a free-standing, unbiased, and independent way. Moreover, it states that neither the Indian Evidence Act of 1872 nor the Code of Civil Procedure, 1908, shall apply to mediators.
Mediators: Mediators may be chosen by (i) the parties in a written agreement or (ii) a provider of mediation services (an institution administering mediation). Any conflict of interest that would cast doubt on their objectivity must be disclosed. The mediator may then be replaced by the parties. In civil and commercial disputes, the Bill makes pre-litigation mediation mandatory. Pre-litigation mediation must be conducted by mediators who fulfil four requirements, unless the parties agree otherwise. They must be authorised by a legal services authority, a court-annexed mediation centre, a recognised mediation service provider, and the Mediation Council of India (National, State, or District). They must be registered or empanelled at each of the 4 places. Why one of these requirements alone is insufficient for such mediators is unknown. A mediator who is registered with the Council but is not appointed by a mediation centre with a court annexed or a recognised mediation service provider, for example, will not be qualified to mediate pre-litigation disputes.