- The Parliament has passed the Mediation Bill, 2021, which aims to reduce the burden on courts by encouraging warring parties to resolve their own disputes with the assistance of trained mediators and mediations facilitated by authorised mediation institutions.
- Nearly 70 thousand cases are pending in the Supreme Court, 60 lakh cases are pending in High Courts and four crore cases are pending in District and Subordinate courts.
Highlights of the Bill
- Parties must attempt to settle civil or commercial disputes by mediation before approaching any court or certain tribunals.
Disputes not fit for mediation:
- The Bill contains a list of disputes which are not fit for mediation. These include disputes: (i) relating to claims against minors or persons of unsound mind, (ii) involving criminal prosecution, and (iii) affecting the rights of third parties. The central government may amend this list.
- The Bill will apply to mediations conducted in India:
- involving only domestic parties,
- involving at least one foreign party and relating to a commercial dispute (i.e., international mediation), and
- if the mediation agreement states that mediation will be as per this Bill.
- If the central or state government is a party, the Bill will apply to:
- commercial disputes, and
- other disputes as notified.
- Mediation proceedings will be confidential, and must be completed within 180 days (may be extended by 180 days by the parties).
- A party may withdraw from mediation after two sessions.
- Mediators may be appointed by:
- the parties by agreement, or
- a mediation service provider (an institution administering mediation).
- They must disclose any conflict of interest that may raise doubts on their independence. Parties may then choose to replace the mediator.
Mediation Council of India:
- The central government will establish the Mediation Council of India.
- The Council will consist of a chairperson, two full-time members (with experience in mediation or Alternate Dispute Resolution), three ex-officio members (including the Law Secretary, and the Expenditure Secretary), and a part-time member from an industry body.
- Functions of the Council include: (i) registration of mediators, and (ii) recognising mediation service providers and mediation institutes (which train, educate, and certify mediators).
Mediated settlement agreement:
- Agreements resulting from mediation (other than community mediation) will be final, binding, and enforceable in the same manner as court judgments.
- They may be challenged on grounds of: (i) fraud, (ii) corruption, (iii) impersonation, or (iv) relating to disputes not fit for mediation.
- Community mediation may be attempted to resolve disputes likely to affect the peace and harmony amongst residents of a locality.
- It will be conducted by a panel of three mediators (may include persons of standing in the community, and representatives of resident welfare associations).
Will it enable ease of doing business?
- The bill augurs well for trade and industry, as it allows the settlement of commercial disputes.
- One of the salient features of the bill is the introduction of a mediation council, which will not only promote mediation across the country, but will also train mediators. This will ensure that mediators are able to handle complex commercial disputes arising out of business dealings.
- According to the bill, the entire process of mediation should be completed in 180 days and therefore mediation gives businesses an easier and faster way to resolve their disputes as compared to court litigation, which takes years to complete.
- The Bill makes participation in pre-litigation mediation mandatory. The question is whether it is appropriate to mandate parties to attempt pre-litigation mediation. On one hand, this could lead to more out of court settlements and reduce the pendency in courts. On the other hand, mandating mediation goes against its voluntary nature.
- The Mediation Council, established to regulate the profession of mediators, may not have representation of practising mediators with adequate experience. This is unlike other professional regulators such as the Bar Council of India.
- The Bill applies to international mediations only if they are conducted in India. It does not provide for enforcement of settlement agreements resulting from international mediation conducted outside India.