Mediation Bill 2023

August 19, 2023

GS Paper II Indian Polity and Governance

Context:

Recently, the Parliament has passed the Mediation Bill 2023.

Key Features of Mediation Bill 2023:

Settling Disputes through Mediation: The Bill requires persons to try to settle civil or commercial disputes through mediation before approaching any court or tribunal.
Time Period: A party may withdraw from mediation after two mediation sessions. The mediation process must be completed within 180 days, which may be extended by another 180 days by the parties.
Mediation Council of India: The Bill provides for the setting up of The Mediation Council of India.
- Its functions will include registering mediators, and recognising mediation service providers and mediation institutes.
Governance: The Bill aims to govern two forms of mediation – voluntary and mandatory.
- A voluntary mediation is where parties under a written mediation agreement seek mediation. Such an agreement may either be as part of a contract or exist independently.
- Mandatory mediation is, where barring certain areas of disputes, there is a legal obligation on parties to mediate before approaching a court/tribunal.
Areas of Exclusion: The areas excluded from mediation include serious allegations of fraud, criminal offenses, environmental matters reserved for the National Green Tribunal, and matters relating to competition, telecom, securities and electricity law and land acquisition.
- The only issue in this entire process is that by default, the Central or State Government cannot be mandated to mediate unless the dispute is of a commercial nature.
Court’s Role: The provisions of the Bill will not prevent any court, if deemed appropriate, from referring any dispute to mediation relating to compoundable or matrimonial offenses connected with or arising out of civil proceedings between the parties.
- Compoundable offenses are those that can be compromised, i.e. the complainant can agree to take back the charges levied against the accused. For Example: Hurt, wrongful restraint, assault, molestation, fraud, adultery.
Concept of Community Mediation: Disputes likely to affect peace, harmony and tranquility amongst the residents or families of any area or locality can be mediated and settled by a panel of mediators appointed by the concerned Authority.

What is Mediation?

Mediation is a voluntary process in which parties try to settle disputes with the assistance of an independent third person (the mediator).
A mediator does not impose a solution on the parties but creates a conducive environment in which they can resolve their dispute.
The mediation process depends on the choice of parties, and there are no strict or binding rules of procedure.
Unlike litigation or arbitration, which involve adjudication of a dispute, mediation involves settlement with the consent of the parties.
In India, mediation is legitimized by Section 89 of the Civil Procedure Code, 1908.
It is a form of Alternative dispute resolution (ADR).

Alternate Dispute Resolution (ADR):

It refers to means by which disputes are settled outside the traditional court system. In India, modes of ADR include arbitration, negotiation, mediation, and Lok Adalats.
- Arbitration: It is a procedure in which one or more arbitrators are selected mutually by both the parties to whom the dispute is submitted. Their decision is final and binding.
- Negotiation: Through direct or indirect communication the parties with conflicting views discuss the form of action to agree to resolve the dispute amicably.
- Conciliation: In it, a neutral third party, known as the conciliator, assists parties in resolving their dispute through communication, negotiation, and problem-solving techniques.
- Lok Adalat: It is one of the most effective methods of ADR as this involves voluntary actions of parties for solving disputes.
As per data published by the National Legal Services Authority for the year 2021-22, India had 464 ADR centres (397 functional), 570 mediation centres, 16,565 mediators, and nearly 53,000 cases were settled through mediation.

Singapore Convention on Mediation:

It provides a framework for cross-border enforcement of settlement agreements resulting from international mediation.
In 2019, India became a signatory to this Convention, but has not yet ratified it.

Types of Mediation:

Court Referred Mediation

Salem Advocate Bar Association, Tamil Nadu v. Union of India: In the case of Salem Advocate Bar Association, Tamil Nadu v. Union of India, Supreme Court held in reference to the matter of mediation that conciliation and arbitration are mandatory for court matters. This judgment has granted legal and social recognition to mediation as a dispute resolution in India.

Private Mediation

In private mediation, a qualified mediator is appointed by the parties on a fixed-fee basis. Both the parties come together to resolve the issue amicably.
The decision of the mediator is not ultimate and hence not binding on the parties.

Significance of Bill:

India as a center of Mediation: This legislation will help ensure that institutional mediation becomes mainstream in resolving commercial (and other) disputes between the parties, putting India on the global map as a dispute friendly jurisdiction.
- For Example: There exists a strong correlation between Ease of Doing Business (EoDB) and the promotion of mediation, and Singapore serves as a prime example of how a robust mediation ecosystem can attract greater foreign investments.
Pendency of Cases: According to the Minister for Law and Justice, there are 4.43 lakh cases pending in district subordinate courts, 60.63 lakh cases in high courts and around 70,000 cases in the Supreme Court.
- Mandating participation in pre-litigation mediation may help reduce pendency and the slow disposal rate in courts.
Cost-effective: Mediation is a cost-effective dispute resolution process that also helps reduce the burden on courts by enabling out-of-court settlements.
- For Example: According to an article published in Harvard Business Review, the ADR-based mediation of one dispute cost $25,000, whereas mediation through outside counsel would have cost an estimated $700,000 and going to court as much as $2.5 million over a period of three to five years.
Greater Control: Mediation increases the control the parties have over the resolution. Each party is directly involved in negotiating their own agreement and no settlement can be imposed upon.
Confidential: Unlike the potential publicity of court proceedings, everything said at the mediation is entirely confidential to the parties (unless specifically agreed otherwise).
Faster outcomes: Because mediation can be used early in a dispute, an agreement can usually be reached quicker than if pursued through the courts.
- The Mediation Process can take a maximum of 60 days, sometimes many cases are resolved in one or two sessions unlike in the judicial courts where normally civil matters are expected to be disposed of within three years.

Challenges of Mediation in India:

Lack of Codification: In 2020, the Supreme court in MR Krishna Murthi v. New India Assurance Co. Ltd pointed out the urgent need for enacting a uniform legislation for mediation in India.
Societal Stigma: In some cases, parties might hesitate to opt for mediation due to concerns about public perception, fearing that it might be seen as a sign of weakness or compromise.
Resistance from Legal Professionals: Traditional legal professionals might be resistant to embracing mediation, as it could be perceived as a threat to their practice or income.
Infrastructural Concerns and Quality Control: Improved emphasis on mediation will directly increase the workload on mediation centers which lack administrative strength.
Institutional Support: While India has made efforts to promote mediation through legislative reforms, the infrastructure for supporting mediation at the grassroots level, including establishing mediation centers and training programs, is still evolving.
Lack of expertise and curriculum in the established universities: Lack of mediation education within law school curricula is one of the major hindrances.
Lack of Professional Mediators: The pool of trained and experienced mediators in India is still relatively small, making it challenging to offer mediation services in all areas and for all types of disputes.

Way Forward:

Institutional Support: Establishing well-equipped and accessible mediation centers at various levels, from local communities to national levels, can provide people with convenient access to mediation services.
More Opening of Mediation & Arbitration Centre: Government should facilitate opening of mediation centers.
- For Example: Recently, Uttar Pradesh got its first mediation & arbitration centre in the form of ‘Centre for Excellence in Mediation and Arbitration or CEMA.
Training and Certification: Developing comprehensive training programs for mediators, lawyers, and judges can ensure that there is a pool of skilled professionals proficient in mediation techniques, ethical considerations, and cultural sensitivity.
Integration with Legal Curriculum: Incorporating mediation education within law school curricula can prepare future legal professionals to consider mediation as a primary or complementary method for dispute resolution.
Legal Reforms: Continuously updating laws and regulations to support and encourage mediation, while also ensuring the enforceability of mediated settlements, is crucial.
Online Mediation: Leveraging technology for online mediation platforms can make the process more accessible, especially for those in remote areas, and provide a convenient alternative to in-person sessions.