Introduction

The judicial system in India is marred by delay in processing mainly due to the number of pending cases in India and the time taken to dispose of such cases. In order to facilitate the quick disposal of disputes, outside of traditional court systems, the need for a standalone Law on Mediation has been highly sought after.

Recently, The Chief Justice of India (CJI), N.V. Ramana, while speaking at the India-Singapore Mediation Summit in July 2021, suggested that mediation should be made mandatory as a first step in dispute resolution and that concrete legislation should be framed in this regard. Thereafter, in the month of December 2021, the CJI, while addressing the Curtain Raiser and Stakeholders’ Conclave of International Arbitration and Mediation Centre (IAMC) at the Hyderabad International Convention Centre, Hyderabad, again emphasized the need for a separate mechanism and said that courts should be the last resort for dispute resolution.

Therefore, in an effort, to promote, facilitate and strengthen the position of mediation as an effective Alternative Dispute Resolution (“ADR”) mechanism, the Ministry of Law and Justice on the 5th of November 2021, rolled out a Draft Mediation Bill 2021, in the public domain for comments and suggestions.

The Bill aims to promote, encourage and facilitate mediation especially institutional mediation for the resolution of disputes, commercial and otherwise, enforce domestic and international mediation settlement agreements, provide for a body for the registration of mediators, encouraging community mediation and to make online mediation as an acceptable and cost effective process among others.

India being one of the signatories of the United Nations Convention on International Settlement Agreements Resulting from Mediation (“the Singapore Convention”) along with 54 other nations, has benefitted greatly, as under the Bill, both domestic and international mediation are enforceable.

Existing Law:

In India, mediation was firstly legalized under the Code of Civil Procedure, 1908 (CPC). Section 89 of the CPC read with Order 10 Rule 1A, mandated civil courts to refer disputes to the ADR process. This method is known as “court-referred mediation.” Thereafter provisions were made under the Arbitration and Conciliation Act, 1996 laying down the procedure for appointing the mediator or mediators for the party seeking to settle the dispute via mediation without the interference of the Court.

However, the sustainability of these methods was questionable and thus not deemed particularly popular.  Thereafter, other laws such as the MSME Act 2006, the Companies Act 2013, the Industrial Relations Code 2020, and the Commercial Courts Act etc., have been enacted that provide for mediation as a means of dispute resolution. However, none have been effective, thus finally giving rise to the implementation of a standardized dedicated legislation on mediation.

Decoding of the Bill

The Bill recognizes both domestic mediation as well as international mediation conducted in accordance with the Singapore Convention. Subsequently, the Bill has recognized a mediated settlement agreement for domestic and international mediation as final and binding between the parties and that a mediated settlement agreement under this Bill is enforceable in accordance with the rules laid down under CPC.

Further, Section 6(1) of the Bill makes it mandatory for the parties to take steps to settle disputes via pre-litigation mediation in accordance with the provisions of the Bill before filing any suit or proceeding in any Court or Tribunal. It is mandatory to complete the mediation proceedings within a period of 90 days from its commencement and that such period may be extended with the consent of both parties.

The Bill also lays down matters outside of the scope of mediation, while recognizing online mediation, with the written consent of both parties at any stage of the proceedings by video or audio means or both.

The Bill provides wide powers to parties to approach courts or tribunals of competent jurisdiction in seeking interim urgent relief in the event of an emergency, before the commencement or during the continuation of mediation proceedings.

The Bill also casts an obligation on the appointed mediator to disclose in writing before the commencement of the mediation process regarding any circumstances or potential circumstances, personal, professional or financial, that may constitute any conflict of interest/s or that is likely to give rise to justifiable doubts as to his/her independence or impartiality as a mediator.

Provisions have also been made to terminate the mandate of a mediator in case of conflict of interest. Under the provision of the Bill, the mediator may assist the parties in identifying issues, reducing misunderstandings, clarifying priorities, exploring areas of compromise and generating options in an attempt to resolve the dispute. The Bill clarifies that the role of a mediator is a mere facilitative role and that he/she may not impose any settlement nor give any assurance relating to a mediation resulting in a settlement.

Furthermore, Section 13 also provides a mechanism to terminate the mandate of a mediator in case there is a justifiable doubt as to the mediator’s independence or impartiality.

In addition, as under the Bill, a domestic Mediated Settlement Agreement can be challenged on the grounds of fraud, corruption, gross impropriety or impersonation and an International Mediated Settlement Agreement can be challenged under the grounds of incapacity of settlement by mediation under the law of India, such settlement agreement was induced or effected by fraud or corruption and is in contravention with the public policy of India

Powers have been given under the Bill to establish a Mediation Council of India in order to frame rules, regulations, policies, guidelines for the conduct of mediation,

The Bill includes Community Mediation which may be resorted to, in the event that any dispute is likely to affect the peace and tranquility among the residents or families of any area or locality with the prior consent of the parties, with the relevant procedure for Community Mediation also laid out in its contents.

Conclusion

Up until now, India has not seen a separate legislation enacted solely for the purpose of mediation. This valiant move by the Department of Legal Affairs to create a standalone law on mediation will defiantly ease the burden of the traditional courts to a great extend and shall also provide justice to the people in a timely manner.