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• GS Paper 2 Government Policies and Interventions for Development in various sectors and issues arising out of their Design and Implementation.
• Tags: #mediation #mediationbill #loksabha #arbitration  #upsc.

Why in the News?

The Mediation Bill referred to the parliamentary standing committee, which presented its report on July 13.

What does the term “mediation” refer to?

• Mediation: Mediation involves a procedure where involved parties come together with a jointly chosen unbiased and impartial individual, who aids them in resolving their disagreements through negotiation.
• Brings Parties Together: This process allows parties to preserve or even mend their relationship, particularly in situations such as family conflicts or business disputes.
• Highly Flexible: The parties have considerable control over the timing, venue, and duration of the proceedings. Unlike court proceedings, scheduling is not restricted by the court’s availability.

Need for mediation

• Absence of Independent Legislation: Although there is no dedicated standalone law for mediation in India, various statutes incorporate mediation provisions. These include 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.
• Directive from the Supreme Court: The Mediation and Conciliation Project Committee of the Supreme Court of India characterizes mediation as a proven and effective alternative for resolving conflicts.
• International Commitment: Given India’s participation as a signatory in the Singapore Convention on Mediation (formerly known as the United Nations Convention on International Settlement Agreements Resulting from Mediation), it becomes relevant to establish a comprehensive legislation covering both domestic and international mediation processes.
• Backlog of cases in India’s legal system: The promotion of mediation as an alternative means of dispute resolution becomes crucial. The objective is to reduce the burden on the courts and expedite the resolution of cases. The central question is whether the current form of the Mediation Bill can effectively achieve this goal.
• India is a signatory to the Singapore Convention on Mediation (formally the United Nations Convention on International Settlement Agreements Resulting from Mediation).

Key Provisions of the Mediation Bill

Pre-Litigation Mediation

• Before initiating legal proceedings in a court or certain tribunals, parties are required to make an attempt to settle civil or commercial disputes through mediation.
• If pre-litigation mediation does not result in a settlement, parties can request the court or tribunal to refer the matter to mediation at any stage of the process.

Exclusions from Mediation

• The Mediation Bill specifies disputes that are not suitable for mediation. These include conflicts:
• involving minors or individuals with unsound minds,
• linked to criminal prosecution, and
• Impacting third-party rights. The list of excluded disputes can be modified by the central government.

Scope of Application

• The Mediation Bill will be applicable to mediations within India in three scenarios:
• exclusively among domestic parties,
• Involving at least one foreign party connected to a commercial dispute (international mediation), and
• When the mediation agreement explicitly references adherence to this Bill.
• When the central or state government is involved, the Bill applies to (a) commercial disputes and (b) other disputes as notified.

Mediation Procedure

• Mediation proceedings are confidential and must be completed within 180 days. Parties can mutually extend this period by an additional 180 days.
• After attending two sessions, a party retains the option to withdraw from the mediation process.
• Court-annexed mediation will adhere to the regulations set by the Supreme Court or High Courts.

Role of Mediators

• Mediators can be appointed either by mutual agreement between the parties or through a mediation service provider—a body overseeing mediation administration.
• Mediators are obligated to disclose any potential conflicts of interest that could undermine their impartiality. Parties have the right to replace a mediator under such circumstances.

Establishment of Mediation Council of India

• The Mediation Council of India will be established by the central government. It comprises a chairperson, two full-time members experienced in mediation or ADR, three ex-officio members (including the Law Secretary and Expenditure Secretary), and a part-time member from an industry association.

The Council’s responsibilities encompass:

(i)  Registering mediators and

(ii) Recognizing mediation service providers and institutes involved in mediator training, education, and certification.

Mediated Settlement Agreements:

• Agreements resulting from mediation (excluding community mediation) will hold finality and enforceability equivalent to court judgments.
• They can be challenged based on grounds of fraud, corruption, impersonation, or disputes that are unsuitable for mediation.

Community Mediation

• Community mediation endeavors to resolve disputes that could disrupt peace and harmony among local residents.
• A panel of three mediators, potentially including respected community members and representatives from resident welfare associations, will conduct community mediation sessions.

Reduced Timeframe for Mediation

The Union cabinet has accepted the standing committee’s recommendation to reduce the time for concluding a mediation from 180 to 90 days. This move aims to expedite the process and provide quicker resolutions.

Voluntary Pre-Litigation Mediation:

• The recommendation to make pre-litigation mediation voluntary instead of mandatory aligns with the essential principle of voluntariness in mediation. Parties’ consent to engage in the mediation process is crucial for its success.

Recognition and Enforcement of Settlement Agreements

The recognition and enforcement of settlement agreements arising from mediation align with India’s commitment to the United Nations Convention on International Settlement Agreements Resulting from Mediation (Singapore Convention). This commitment enhances the credibility of mediation as a dispute resolution mechanism.

Section 26 Reinterpretation

• As outlined in Section 26 of the Bill, the implementation of court annexed mediation, encompassing pre-litigation mediation as well, will be aligned with the directives or regulations established by either the Supreme Court or the High Courts.
• Nevertheless, the Committee expressed reservations concerning this provision, contending that it deviated from the fundamental principles of the Constitution.
• In jurisdictions adhering to the Common Law system, it has been a commendable practice that in the absence of statutory provisions, judgments and determinations made by the highest court carry substantial authority.
• However, with the enactment of a law, its provisions take precedence over court instructions or decisions. Consequently, the inclusion of Clause 26 raises constitutional concerns, as it contradicts this principle.

Challenges and Concerns

Pre-Litigation Mediation

• As per the provisions of the Bill, engaging in pre-litigation mediation becomes obligatory for both parties prior to commencing any legal action. Parties who choose not to participate in pre-litigation mediation without a valid rationale might incur associated expenses.
• Nonetheless, this approach raises concerns in light of Article 21, as this constitutional article guarantees unimpeded and unrestricted access to justice. Imposing prerequisites on access to justice contradicts the essence of Article 21.

Limited Grounds for Challenging Enforcement

• The Bill lists limited grounds to challenge the enforcement of a settlement agreement. A reevaluation of these grounds is necessary to strike a balance between upholding the sanctity of settlements and addressing potential issues.

Cross-Border Mediation Dynamics in India

• The Bill addresses international mediation conducted within India, treating it as a domestic endeavor. Consequently, any settlement reached under this context attains the status of a court judgment or decree.
• However, caution is warranted in situations involving foreign parties. The Singapore Convention does not encompass settlements already possessing the status of a judgment or decree, which could lead to unfavorable outcomes.
• This stipulation could lead to the loss of significant advantages tied to the worldwide enforceability of cross-border mediation outcomes, ultimately impacting the efficacy of such mediation conducted in India.

Online and Community Mediation

• The Bill introduces concepts of online and community mediation. However, a Niti Aayog report indicates that a significant portion of the population lacks internet access and compatible devices. To make online mediation effective, efforts must be directed towards improving internet accessibility in remote areas.

Exclusion of Government-related Disputes

• The Bill’s restriction on the government’s participation in mediation proceedings only for “commercial disputes” contradicts the objective of the legislation. Including government-related disputes would have helped change the perception of the government as an adversary.

Technical Flaws

• Some technical flaws in the Bill need addressing. For example, Clause 8 allows a party to move the court for interim relief before or during mediation, but the term “exceptional circumstances” is undefined and potentially ambiguous.

While the Mediation Bill introduces important provisions to promote mediation as a preferred mode of dispute resolution, there are areas that require further refinement. The focus should be on ensuring that mediation remains a voluntary and effective means of securing justice, particularly in a country like India with its unique challenges.

The true spirit of the legislation should prioritize the resolution of disputes over mere formalities. Ultimately, the success of the Mediation Bill lies in its ability to offer an accessible, efficient, and fair alternative to the traditional legal process.

Sources Livemint

Mains Question

Q  Discuss the implications and constitutional concerns surrounding the mandatory pre-litigation mediation provision in the proposed legislation. How does this provision intersect with the constitutional right to access justice as enshrined in Article 21? Provide examples and insights to support your arguments. 250 words.