Introduction
“Mediation” as a mode of dispute resolution is not a new concept in India. The history evidences its use through various means, one such example being informal Panchayats. The idea gained popularity with the advent of the Lok Adalats[1]. Further, its effectiveness can also be traced from the insertion of Section 89(1) of the CPC, 1908, accounting for mediation as a mode of dispute settlement and the enactment of the Arbitration and Conciliation Act, 1996, which puts forth the intricacies of a mediation process[2]. Although mediation as a mode of alternative dispute resolution has gained recognition in India, “private mediation” observed specific gaps concerning sufficient participation, recognition in the legal arena, and structural requirements. To take a step further in addressing the existing issues, the Mediation Bill of 2023 was passed by both Houses to receive the President’s assent on 14th September 2023. He was significantly notified of the Mediation Act, 2023 (from now on referred to as “Act”) with the motive of formulating and enhancing the efficacy of mediation.
[1] Department-Related Parliamentary Standing Committee on Personnel, Public Grievances, Law and Justice, “One Hundred Seventeenth Report on the Mediation Bill, 2021”, accessed on: 22th Dec. 2023, https://prsindia.org/files/bills_acts/bills_parliament/2021/SC%Report_Mediation%20bill.pdf.
[2] Aditya Mehta, Pritvish Shetty, et.al., “Analysis: Mediation in India”, Cyril Amarchand Mangaladas Blog (October 31, 2022), https://corporate.cyrilamarchandblogs.com/2022/10/analysis-mediation-in-india/.
Objectives of the Act
The primary objective of the Act is to encourage participation, spread awareness, and facilitate mediation, prominently institutional mediation, for dispute resolution in matters of varied natures. Other than the said, the Act strives to serve other essential goals, which have been elaborated hereunder:
1-Enforcement of Mediation Agreements – Under Sections 19 and 20, the Act outlines the mechanism for enforcing “mediated settlement agreements (MAs)”. Legitimate MAs are duly enforceable, similar to a court judgment.[1]
2-Registration of Mediators – A mediator registration body is to be established to regulate and maintain the standards of the mediation service providers. Chapter VIII of the Act elucidates on the same.
3-Enhancing Community Mediation – Section 6 motivates community mediation to make the process more accessible and optimal for the local communities.
4-Facilitating Online Mediation – To overcome the shortcomings due to geographical locations and facilitate cost reduction, virtual mediation has been allowed under Section 30. On the other hand, there is a need for well-defined rules for such conduct and mechanisms[1].
5-Encouraging Confidentiality – Section 25 of the Act emphasizes the confidential element associated with all the mediation processes and data pertaining to it.
6-Ensuring Accessibility to Justice – Under Section 7 of the Act, the scope for accessibility and availability has been discussed. In this regard, court-annexed mediation is of immense importance, providing services free of cost or with minimal charges. Moreover, private mediation, now titled “institutional mediation,” provides mediation services and gives the parties the freedom to select mediators of their choice.
[1] The Mediation Act, 2023, § 19 and 20, No. 32, Acts of Parliament, 2023.
Applicability
It is applicable to all the mediation processes which take place in India, wherein: all or both the parties are incorporated in India; the agreement for mediation lays that the mode for dispute resolution would be mediation, an international mediation; if one of the parties in a commercial dispute, is the Government, or any other dispute where Government as a party has been notified[1]. It further extends to the ambit of civil as well as commercial disputes along with a mention of the list, which indicates the disputes are not suitable for mediation.
However, it does not elaborate on the Singapore Convention on Mediation[2], which deliberates on the framework of enforcement. Related to cross-border agreements arising from the international mediation. Also, it encompasses international mediation conducted in India, but it is silent on the mediation process conducted outside of India[3].
[1] Ibid, § 2.
[2] India is a signatory to the Singapore Convention.
[3] Soumya Gulati, Shweta Sahu and Sahil Kanuuga, “Dispute Resolution Hotline – Decoding the Mediation Bill”, 2023, Nishith Desai Associates(04 Sept., 2023), https://www.nishithdesai.com/NewsDetails/10748#:~:text=The%20Mediation%20Act%202023%20(“Mediation,to%20align%20with%20international%20practice..
Key Provisions
Definition of Mediation – The ambit expands to pre-litigation, online, community mediation and conciliation.
Pre-Litigation Mediation – The Act puts forth the concept of “pre-litigation mediation” as mediation is mandated before initiation of any proceedings related to civil or commercial aspects, notwithstanding of whether there is an already existing mediation agreement. Also, the court is provided with the authority to refer the parties to mediation[1].
Eligible disputes for Mediation – Section 6 highlights the non-eligible matters for mediation, whereas the first schedule lists the same. Such exclusions generally involve petty matters and other issues that can be dealt with under another Statute.
Mediation Agreement – Recognition has been provided to mediation agreements. It has been elaborated that a matter can be given effect to mediation if it has a clause in the written agreement or a separate document per se. Various formats of the agreements have been supported also to be in accordance with the Information Technology Act of 2000[2].
Appointment of Mediators – The Act stipulates that the parties are free to choose mediators. If the agreement is silent about the nationality in particular, then a person, irrespective of their nationality, can be appointed. If there has been no pre-agreement, then a request can be put to the Mediation Service Provider for the appointment of a mediator.
The mediator so appointed needs to disclose any conflict of interest and provide a complete disclosure to ensure their impartiality. This particular provision is in consonance with the international standards[3].
1-Mediators’ Role – Section 16 of the Act provides for the role of mediator in the mediation process and states their role as a facilitator.
2-Timeframe – It is mentioned that the mediation process must be concluded within 120 days, which begins from the date since the mediator is involved initially. If the parties agree, the time limit can be extended to about 60 days. In addition, the Commercial Courts Act 2015 will be subjected to certain modifications applying to pre-institution mediation, which shall impact more stringent timeframes[4].
3-Basis for Challenging the Mediation Agreement – The provision of Section 28 highlights the limited grounds based on which a mediated settlement agreement might be challenged. Such grounds involve fraud, impersonation, corruption, or if the matter in question falls under the ambit of Section 6.
4-Online Mediation – As stated above, the Act acknowledged virtual hearings based on written consent by the parties[5].
5-Interim Orders – The tribunal has the authority to provide a suitable interim order(s) to protect the party’s interest. However, the extent and the type of such orders have not been mentioned.
6-The Mediation Council of India (MCI) – The MCI is established under the Act, a pivotal body set up for facilitating domestic and international meditation growth/enhancement. The members of the body are members who have expertise in the legal and mediation domain. Also, the members representing commerce and industry bodies shall be appointed[6].
7-Amendments in the Statutes currently in place – The Act provides for modification to be made in various existing statutes to align the same with the respective Act, which includes the “Indian Contract Act, 1872, The Arbitration Conciliation Act, 1996, Consumer Protection Act, 2019, the MSME Act, 2006” and so on. Hence, it implicates a widespread range of implications and developments.
[1] The Mediation Act, 2023, § 5, No. 32, Acts of Parliament, 2023.
[2] Ibid, § 4.
[3] Ibid, § 8.
[4] Ibid, § 18.
[5] Ibid, § 30..
[6] Apoorva Misra and Nishant Rewalia, “Mediation Act 2023 latest amendments: A complete guide”, Bar and Bench (22nd Dec. 2023), https://www.barandbench.com/law-firms/view-point/mediation-act-2023-latest-amendments-guide.
Advantages
The Act is believed to offer a speedy settlement and reduce costs by enhancing the alternative method for dispute resolution. Secondly, the emergence of the technology-based society provides a long way for online mediation, making it cost-effective in national and international platforms. Thirdly, the rift among the communities can be easily referred to as mediation, leading to faster disposal of cases and sharing the burden of rendering justice from the courts and traditional mechanisms.
Impacts and Challenges
The mediation process and its choice remain optional, wholly based on the parties’ discretion. Still, the step to regulate and formulate the same demonstrates the development of mediation as an efficient mode of alternative dispute resolution. The pandemic and the economic constraints have witnessed worldwide the essence of a speedier and cost-saving mode, even if the same is non-adjudicatory.
On the other hand, there are also a few challenges which have been foreseen. The Act is silent about the comprehensive framework for international mediation, which might lead to the creation of ambiguity and be a challenge to the applicability of the provisions. Further, there is a requirement for addressing the enforcement of cross-border mediated settlement agreements which take place outside of India[1].
Furthermore, on the aspect of issues of cost transparency, the parties have to place reliance on the set agreements or any directions which the mediation service providers lay. Lastly, there is also a necessity for including the programs for training mediators, spreading information and other related resistance with respect to alternative dispute resolutions.
[1] Raj Panchmatia, Haabil Vahanvaty anf Roselin Alex, Game-Changer in Effective Alternative Dispute Resolution the Mediation Act, 2023, SCCOnline Blog (28th Sept. 2023), https://www.scconline.com/blog/post/2023/09/28/game-changer-in-effective-alternative-dispute-resolution-the-mediation-act-2023/.
Conclusion
As a result of constant efforts by the Indian Government to enhance the dispute resolutions, this Act remarks one such progress in this journey. It provides a legal ground for mediation as an effective alternate method of disputes resolution. By including the government agencies and bodies, it furnishes a sense of big boost to the departments and elevates a time effective mode of disputes settlement. Although, there is a requirement to consider the need for ratification so as to put forth an Act built with all-encompassing law in mediation, on a positive note it is a welcoming step towards the transformation of the justice distribution from traditional methods to new growing methods of justice. Ultimately, the effective implementation of the notified Act is based completely on utilisation by the concerned stakeholders.
