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Over the years, mediation has been recognised as the fastest growing method to resolve disputes worldwide. Mediation allows parties to relook at mutual interests and rights of each other, and to come up with amicable and innovative solutions. This helps in maintaining cordial relations between the parties.
The role of courts or arbitrators is adjudicative and more formal in nature. In contrast, the nature of mediators or the process of mediation is very practical and flexible. Many a time, it can prove to be speedier, more effective and economical than the other adjudicative processes.
Mediation needs to be promoted as a mechanism that complements the judicial process. To achieve acceptance and popularity of Mediation as the first step before approaching the court or any other Alternative Dispute Resolution (ADR) method, it is crucial to develop confidence in the process of Mediation. Court-annexed mediation, to a certain extent, has been adopted as a measure of docket management and must go hand in hand with promotion of mediation as a successful, revolutionary, economical and time-saving method for all the stakeholders.
Current scenario of Mediation under statutory provisions
Conciliators appointed under Section 4 the Industrial Disputes Act, 1947 are assigned with the duty to mediate and promote settlement of industrial disputes with detailed prescribed procedures for conciliation proceedings. If used appropriately, it’s a cheap and quick process. However, only a few cases have been resolved and the very intent of having such provision has been frustrated. Unfortunately, large numbers of matters which ought to have been resolved by this provision are still pending in courts and new matters are filed every day.
In 2002, an amendment to the Code of Civil Procedure, 1908 (CPC) was brought in. Section 89 read with Order X Rule 1A provided for reference of cases pending in the courts to ADR. In addition, Order XXXIIA of the CPC recommends mediation for familial/personal relationships, as the ordinary judicial procedure is not ideally suited to the sensitive area of personal relationships. Though many courts in India now have mediation centres, there is no accurate data available to show that this provision has been utilised successfully.
Even Section 442 of the Companies Act, 2013, read with the Companies (Mediation and Conciliation) Rules, 2016, provides for referral of disputes to mediation by the National Company Law Tribunal and Appellate Tribunal.
The Micro, Small and Medium Enterprises (MSME) Development Act, 2006 mandates conciliation when disputes arise on payments to MSMEs.
More particularly, family and personal laws including the Hindu Marriage Act, 1955 and the Special Marriages Act, 1954 require the court in the first instance to attempt mediation between parties.
Section 32(g) of the Real Estate (Regulation and Development) Act, 2016 provides for amicable conciliation of disputes between the promoters and allottees through dispute settlement forum, set up by consumer or promoter associations.
Success of the mediation-conciliation mechanism prescribed under several laws
Despite having the above stated statutory recognition, mediation has not been able to achieve great success in India. The Mediation and Conciliation Project Committee (MCPC) was established by the Supreme Court in April 2005 to oversee the effective implementation of mediation. The endeavour of the MCPC was to give a boost to court-annexed mediation and to help mediation in growing not as an ‘alternative resolution mechanism’, but as ‘another effective mode of dispute resolution’.
From the websites of several High Courts, it can be ascertained that most High Courts have their separate set of rules governing Mediation and Conciliation. Barring for a few High Courts, there is no data available to show the status of mediation cases referred, successes/failure of matters, and number of settlements arrived at and effectively implemented.
If the object of the MCPC was to reduce backlog, more attention is required towards framing of a national policy with an appropriate legal framework. The success and popularity of mediation is restricted and there is a need for urgent measures to promote and support its effective implementation.
The following are the important developments of in the field of mediation:
The 129th Law Commission of India Report recommends courts to refer disputes for mediation compulsorily.
In the landmark case of Afcons Infrastructure Ltd v. Cherian Varkey Construction Co. (P) Ltd, the Supreme Court observed that that all cases relating to trade, commerce, contracts, consumer disputes and even tortious liability could normally be mediated.
The 2018 amendment to the Commercial Courts Act 2015 (Section 12A), made it mandatory for parties to exhaust the remedy of pre-institution mediation under the Act before instituting a suit. The Commercial Courts (Pre-Institution Mediation and Settlement) Rules 2018 (the PIMS Rules) have been framed by the government. Settlements arrived at in this process are enforceable by law. The period of mediation would not be computed for the purposes of limitation under India’s Limitation Act. Effective implementation of this provision can be major boost for economic growth.
In the matter of MR Krishna Murthi v. New India Assurance Co. Ltd., the Supreme Court, asked the government to consider the feasibility of enacting an Indian Mediation Act to take care of various aspects of mediation in general. The Court further directed the government to examine the feasibility of setting up a Motor Accidents Mediation Authority (MAMA) by making necessary amendments in the Motor Vehicles Act. In the interregnum, NALSA was directed to set up Motor Accident Mediation Cells, which can function independently under the aegis of NALSA or can be handed over to MCPC.
The new Consumer Protection Act, 2019, under Section 37-38 and Chapter V, provide for disputes to be first referred to mediation and the procedure to be followed as per Section 74(3) of the Act read with Section 101(2)(zf) and Section 102(2)(p) of the Act. The Central government and the state government, respectively, have been empowered to make rules for providing for the persons in the consumer mediation cell.
6. As regards international disputes, India is a signatory to the United Nations Convention on Mediation (the Singapore Convention), which gives mediation settlements the the force of law.
Measures for effective implementation and growth of Mediation in India
There is an urgent need for a uniform statue exclusively governing the mediation process in India. Mediation legislation exists in more than 18 other jurisdictions, including Singapore, Malaysia, and Ireland (plays regulatory role). The Singapore International Arbitration Centre (SIAC) and the Singapore International Mediation Centre (SIMC) have framed SIAC-SIMC Arb-Med-Arb Protocol (AMA Protocol) to mange disputes in accordance with an “Arb-Med-Arb” clause for commercial contracts.
In India, parties mainly opt for court annexed-mediation, for which the respective High Courts have their own set of Rules. Private mediation is less preferred due to lack of recognition.
As the above provided enactments have been introduced or are being introduced in our country, what we simultaneously need is a quick evolution of the mediation mechanism. For this, the mediation process, be it private or court-annexed, would require practical recognition by the legislature and the judiciary.
The judiciary mostly deals with matters that require adjudication, but there are situations where mediation techniques would be more appropriate and beneficial to the parties. Therefore, identification of such matters and situations by parties, lawyers and judges becomes extremely crucial and important in the promotion of mechanism.
The following steps may be taken:
Grassroots level awareness of public at large (particularly parties, lawyers, judges and other stakeholders) and easy access to the Mediation.
Legislative framework on Mediation and its practice (many other countries have already adopted this and India is now signatory to the United Nations Convention on International Settlement Agreements).
Mediation Centres need good infrastructure and a standard pattern to make parties comfortable.
Mediation must develop into a full-time profession (efforts by senior lawyers, members of the judiciary and all state bar councils will be required for promotion of this mechanism) as it gives lawyers an excellent opportunity to demonstrate their legal, analytical and professional skills.
Incentives and recognitions to lawyers to educate parties about the inner workings of the mediation process in order to make such informed choices.
High ethical standards (code of ethics and conduct) to be followed.
Theoretical as well as practical training in mediation to be included in syllabi of law colleges and introduction to mediation course to be conducted for all practicing lawyers. Structured mediation training with accreditation for specialising in mediation should be provided in a cost effective manner all over India. Continued skill enhancing courses should be conducted from time to time for lawyers and other professionals who wish to take up mediation as a profession,
Multiple Mediation drives should be conducted by courts on various levels, be it at the district level or the national level. These drives can prove to be extremely successful and can help in clearing a large backlog of cases pending before various courts. During the recently conducted Family Courts Mediation Drive conducted by the Delhi High Court, out of the 2,884 cases referred to mediation by the Family Courts, 2,171 cases were successfully disposed of, which resulted in the disposal rate of 75.27%. This clearly indicates that the judicial system requires heavy promotion of the process of mediation.
The selection process of mediators and adequate training standards for the mediators should be developed. There is a need to ensure standardised training programmes for potential mediators and details about the professional and educational background of the mediators, including previous mediations conducted, areas covering the issues involvement in prior mediations, expertise in other discipline(s), if any, etc. need to be maintained.
For mediation to develop as a significant practise area, mediators shall be required to be attached with extremely transparent and eminent professional bodies under the active surveillance of the government and the judiciary.
One of the reasons for the sluggish growth of Mediation is that there are hardly any national and international mediation centres that are providing affordable and quality training. Unfortunately, mediators can currently exaggerate their skills and experiences in ways that cannot be contradicted, as mediations are conducted in closed rooms and in confidentiality. Thus evaluating the competency of a mediator is challenging. Therefore, there is an urgent need to create a regulatory framework for fostering confidence and ensuring that ethical practices are followed in the mediation process.
The author is an Advocate-on-Record at the Supreme Court of India and a trained Mediator.