Mediation Bill: Not getting the Act together
GS Paper 2, Constitution, Governance, Govt Policies and Interventions.
Context:
- The Mediation Bill has been modified by the Parliamentary Standing Committee on Law and Justice.
- The panel has specifically said the Centre against making pre-litigation mediation mandatory. The Mediation Bill, 2021 further specifies that the laws of the Information Technology Act, 2000 would regulate the conduct of all mediations.
- The Bill acknowledges that mediation has matured and should be recognised as a profession, which is a significant advance above the part-time honorarium basis used in the court-annexed mediation systems.
- The Council, is comprised of three members:
- a retired senior judge,
- a person with knowledge in Alternative Dispute Resolution (ADR) law, and
- an academic who has taught ADR.
- It lacks even a single mediator in the body. While the government has requested opinions on the draft Bill, what is missing is a focused and involved dialogue after the submission of comments.
- There is currently no standalone legislation in India, despite the fact that mediation is recognised by specific laws such as the Code of Civil Procedure, 1908, the Arbitration and Conciliation Act, 1996, the Companies Act, 2013, the Commercial Courts Act, 2015, and the Consumer Protection Act, 2019.
Importance of Mediation:
- Mediation is a problem-solving strategy that may be applied in any issue for anyone. It also goes to the bottom of the problem in order to discover a real solution for all parties.
- Mediation can be found to aid increase communication in this factor. This procedure also provides a confidential and neutral forum in which the parties can discuss their disagreements.
- Mediation also encourages the parties to actively and personally participate in the issue. A final conclusion is reached addressing the parties’ disagreement.
The Mediation Bill of 2021 is divided into four sections:
- Part I dealing with Domestic Mediations.
- Part III dealing with Singapore Convention mediations.
- Domestic mediation is defined in Part II of the Mediation Bill as one performed in India, when all or both parties usually reside in, are incorporated in, or have their enterprises in India.
- The adoption of the worldwide practise of using the words mediation and conciliation interchangeably is a notable element of the Mediation Bill, 2021. It is clear from the definition of mediation laid down in Part IV of the law.
ADR (Alternative Dispute Resolution):
- ADR refers to methods of resolving conflicts that are not resolved through the traditional judicial system.
- Arbitration, negotiation, mediation, and Lok Adalat are all forms of ADR in India.
- The choice of parties determines the mediation process, and there are no rigorous or obligatory procedural standards.
- The benefits of mediation include its non-adversarial and voluntary character, the process’s flexibility and secrecy, its speed and cost effectiveness, and the finality of consensual agreements. Mediation, as a form of ADR, may also assist lower the caseload on courts.
At the moment, mediation in India might be:
- the court referred (courts may refer cases to mediation under the Code of Civil Procedure, 1908),
- private (for example, in a contract with a mediation provision), or
- as specified by a specific statute (such as the Commercial Courts Act, 2015, the Consumer Protection Act, 2019, or the Companies Act, 2013).
- Private ADR or mediation centres, as well as centres established by courts or tribunals, offer mediation services (known as court annexed mediation centres). According to the National Legal Services Authority, India has 464 ADR centres (397 operational), 570 mediation centres, 16,565 mediators, and over 53,000 cases were concluded through mediation in 2021-22.
- Several nations, like Australia, Singapore, and Italy, have separate mediation legislation. The Supreme Court (2019) and the High-Level Committee to Review the Institutionalization of Arbitration Mechanisms in India have both proposed enacting separate legislation governing mediation in India (2017).
- Furthermore, in 2020, the Supreme Court organised a committee that advocated and drafted a draft umbrella law to grant sanctity to conflict resolution through mediation.
The Benefits of Alternative Dispute Resolution (ADR):
- It is more feasible, economical, and efficient since the procedural flexibility saves time and money while eliminating the stress of a traditional trial.
- Assisting in the preservation of secrecy because most conflicts are resolved in secret.
- The ability to ensure that the tribunal has specialised competence in the form of an arbitrator, mediator, conciliator, or impartial adviser.
- The end result is frequently new ideas, long-term benefits, increased pleasure, and enhanced relationships.
- It also provides more direct control over the outcome. Personal connections may suffer less as well.
Lok Adalat:
- Lok Adalat is known as the “People’s Court,” and it is presided over by a chairman who is a serving or retired judicial official, a social activist, or a member of the legal profession.
- The National Legal Service Authority (NALSA), in collaboration with other Legal Services Institutions, holds Lok Adalats at regular intervals to exercise this jurisdiction. Any issue pending in a normal court or any disagreement that has not been resolved in a court of law can be referred to Lok Adalat.
- There are no court fees and strict protocol is followed, making the process quick.
- If a matter pending in court is referred to the Lok Adalat and is later settled, the court money paid in court when the petition was filed is reimbursed to the parties.
Mediation Council:
- According to the Bill, the central government would create the Mediation Council of India.
- The Council’s functions include:
- registering mediators,
- recognising mediation service providers (institutions that administer mediations) and mediation institutes (institutions that provide mediation training, education, and certification),
- grading mediation service providers, and
- establishing professional conduct standards for mediators, mediation service providers, and mediation institutes. We meet with the Council to discuss two problems.
Analysis and Key Issues:
- The Bill requires pre-litigation mediation involvement. The question is whether mandating parties to try pre-litigation mediation is appropriate. On the one hand, this might lead to more out-of-court settlements and a reduction in court pending cases. Mandating mediation, on the other hand, contradicts its voluntary character.
- The Mediation Council, may lack representation from practising mediators with sufficient expertise. This is in contrast to other professional regulatory bodies such as the Bar Council of India.
- Before establishing regulations pertaining to its basic activities, the Mediation Council must get prior permission from the central government. Prior consent is necessary.
- The Bill only applies to foreign mediations that take place in India. It makes no provision for the execution of settlement agreements reached through foreign mediation outside of India.
The Need for a Mediation Bill:
- Improving Alternative Dispute Resolution (ADR):
- The government has taken a number of policy efforts to promote and improve ADR processes.
- It would allow for the speedy resolution of conflicts outside of established judicial systems.
- Bringing a separate Mediation law is a continuation of the activity.
- Harmonize the various Mediation statutes, rules, and regulations:
- Mediation laws are contained in multiple enactments, including several Rules and Regulations.
- It was required to understand the current legal framework governing mediation.
- The need for umbrella legislation, including modifications to current laws, was frequently expressed.
- Aligning Indian norms with global practises:
- The Bill considers the worldwide practise of using the terms “conciliation” and “mediation” interchangeably.
- Singapore Mediation Convention:
- India has signed the Singapore Convention on Mediation.
As a result, it has become necessary to pass legislation governing local and international mediation.
The Bill’s Objectives:
- To promote, encourage, and enable mediation, particularly institutional mediation, for the resolution of commercial and other conflicts.
- Enforcing domestic and international mediation agreements.
- Establish a body for the registration of mediators in order to promote community mediation.
- To make online mediation an acceptable and cost-effective method, as well as for matters related to or incidental to it, has been prepared.
Significance of the Bill:
- The Bill recognises that mediation should be recognised as a profession rather than as a part-time honorarium-based service as it is in court-annexed mediation schemes.
- The Bill recognises the significance of institutions training mediators and service providers providing structured mediation under their norms.
- If an urgent interim order is required, it is possible to forgo mediation at the initial stage and return to it once the temporary relief problem has been resolved.
- The Bill eliminates the ambiguity caused by the words “mediation” and “conciliation” by using the former in conformity with international practise and broadly defining the latter.
- It recognises online conflict settlement, which was highlighted during COVID-19.
- It allows for the enforcement of business agreements agreed by international mediation, i.e. between parties from different nations, in accordance with the Singapore Convention on Mediation.
Legal Provisions related to Mediation:
- In India, mediation is largely controlled by two legislative acts: the Civil Procedure Code of 1908 and the Arbitration and Conciliation Act of 1996. (ACA).
- There are several more legislative clauses that require mediation before filing a lawsuit in court. Among these statutes are:
- Industrial Disputes Act,1947.
- Companies Act of 2013.
- The Micro, Small, and Medium Enterprise Development Act of 2006.
- The Hindu Marriage Act of 1955.
- 1954 Special Marriage Act.
- The 2016 Real Estate (Regulation and Development) Act.
- Commercial Courts Act, 2015.
- Consumer Protection Act, 2019.
Issues That Need to Be Addressed Include:
- There is no comprehensive legislation: While mediation is addressed in various current laws, there is no comprehensive law that governs all aspects of mediation.
- Unresolved and unclear: The drafters have left several components unresolved and confusing, which must be corrected immediately.
- Inadequate infrastructure: India lacks the necessary infrastructure for mandatory mediation, such as a sufficient number of mediators and mediation centres.
- Making reluctant parties participate in mediation might be harmful.
- Obligatory pre-litigation procedure: The legislators have incorporated a mandatory pre-litigation process in Section 6 of the draft bill.
- Dispute to the settlement agreement: According to Section 29 of the proposed law, parties may challenge the mediated settlement agreement based on fraud, corruption, or other grounds within three months of obtaining it.
- However, the clause contradicts the usual idea that the limitation period begins from the date of discovery of fraud, not the date of receipt of the agreement.
- Foreign mediation: The law defines international mediation performed in India as domestic mediation, denying these agreements the advantage of the Singapore Convention for the execution of commercial mediation settlements across the world.
Positives:
- Recognition of mediation as a profession: the bill recognises that mediation has matured and should be recognised as a profession, which is a significant advance above the part-time honorarium basis granted before under court-annexed mediation schemes.
The law recognises the importance of institutions in training mediators and service providers to provide organised mediation in accordance with their norms.
- Addressing cases that are pending: The adage “justice delayed is justice denied” suggests that the time it takes to address matters is significant to a person seeking justice. With over 4.7 crore cases outstanding across all courts in the country, an alternative conflict resolution mechanism is desperately needed; hence, the mediation law is a step in the right direction.
- No misunderstanding between the terms ‘mediation’ and ‘conciliation’: the bill eliminates the confusion caused by the use of the expressions ‘mediation’ and ‘conciliation’ in separate statutes.
The law has chosen to employ mediation in accordance with international practise, while also broadly defining it to encompass the procedure of conciliation.
- To establish India as a centre for international mediation: the law allows for the enforcement of commercial settlements achieved in international mediation between parties from different nations, in accordance with the Singapore Convention on Mediation, to which India is a party.
The customary ensures that mediation settlements will be in effect without much problem over the world, in contrast to the difficulties encountered when enforcing a litigative decree or arbitration decision.
Steps To Enhance Mediation:
- Remove ambiguity: Certain components of the Bill are open-ended and confusing, and they must be addressed immediately.
- Guarantee adequate cross-border mediation: To ensure international enforceability, the settlement reached in India should not be elevated to the level of a court decision or decree.
- Increase infrastructure: India lacks the necessary infrastructure for mandatory mediation, such as a sufficient number of mediators, mediation centres, and so on. The government must make it easier for them to mediate.
- Increase awareness: The National and State Legal Services Authorities should distribute more information about mediation and alternative dispute resolution (ADR) so that they become the primary option considered by potential litigants.
- Alternate Dispute Resolution has been effective in eliminating the backlog of cases at all levels of the judiciary – in the previous three years, Lok Adalat alone has disposed of more than 50 lakh cases per year on average. A similar effect may be seen with Mediation. As a result, the government should address the issues raised in the mediation law and guarantee its appropriate implementation.
The Way Forward:
- Enacting a legislation expressly for mediation would be the most critical step toward acknowledging mediation as an effective instrument for conflict resolution.
- The Mediation Bill, 2021, should be approved as quickly as possible, with all essential input from all parties.
- The law should seek to resolve enforcement and quality control problems.
- However, care should be taken to ensure that the regulation does not infringe on the autonomy of the parties involved in mediation.
- The enactment should augment the flexible character of mediation and aid in standardising mediation methods.
- Additionally, efforts should be made to promote mediation by making it a necessary step prior to litigation.
- Increasing the number of compoundable offences: The number of compoundable offences, particularly property offences, may be raised.
- In light of the Law Commission’s recommendations in its 243rd report, Section 498A of the Indian Penal Code, pertaining to cruelty by the husband or his family, might be made compoundable.
- Separate mediation legislation and guidelines will likely eliminate the majority of complaints about the procedure and pave the road for mediation to become the primary choice among conflict resolution techniques for domestic and cross-border issues.
- A significant transformation in stakeholder thinking, knowledge of the process, and redefinition of approach to mediation is required for the growth and sustainability of mediation practise in India.
