India’s New Mediation Bill, 2021

I. Introduction

Recently the Government of India has brought up initiatives for advertising and building up Alternative Dispute Resolution (ADR) procedures by amending existing laws for the facilitation of disposing disputes quickly outside traditional court systems. The latest step taken is the Draft Mediation Bill 2021 being umbrella legislation whose objectives was to advertise, support, and ease mediation, specifically institutional mediation to resolve commercial disagreements and others, enforcing both domestic and international mediation settlement agreements as India being an attestor to the Singapore Convention on Mediation, provide a body of registered mediators, encouraging group mediation and making online mode of mediation a suitable and economical process. The Bill also views the international application of utilizing both the words ‘mediation’ and ‘conciliation’ correspondently.

Mediation is a process where a middle man is appointed for facilitating arranged talks between arguing parties and helping to reach a collectively amenable settlement which is called an Alternative Dispute Resolution (ADR) process, which is another option other than litigation in courts. Mediation helps maintain relationships through promoting and coming up with a harmonious agreement. Further, it also saves time and reduces litigation costs.

II. Advantages of the draft bill

This Draft Bill puts forward pre-litigation mediation and also simultaneously protects the interest of the opponents to approach courts in instances where emergency relief is required. The ‘Pre-trial mediation’ method is a provision instituted in Section 89 of CPC Amendment Act 2002 for a pre-trial which is another way of settling disputes by the Courts before initiating legal actions. The Supreme Court has designated motivation to pre-litigation mediation, also an exceptional role in marital or family dispute cases, but doesn’t exist any all-embracing structures for these systems. A report² calls attention that this ensued an absence of consistency over centres, with the company of hardly a few contributing to these mediation services. This report³ advocated institutionalized prior litigation framework could boost the connected model of the Court and also open up paths for further explorations. The current Draft Bill builds up this litigation model by suggesting appropriate revisions to the CPC 1908 and CCA, 2015.

Enrollment of the Mediation Settlement Agreement has been prepared with State, District, and Taluk Legal Authorities in 90 days for making certain that preservation of verified documentation of the agreement arrived. Besides, mediation also saves secrecy of the process taken up, giving immunity with regards to specific occurrences in opposition to its disclosure. This Settlement Agreement provided by the Bill has been a successful outcome enforceable by law. It is out of the consensual accord between the parties. As a result, the question of it has been allowed for restricted reasons. The report⁴ underlines the main difficulty concerning the impositions of mediated agreements is confusing based on questioning them. So it suggested that the legislation ought to specify exact causes for questioning the settlements done by parties. The Bill directs by stating the reasons on which a Settlement Agreement could be challenged, which are corruption, fraud, gross wrongdoing, and impersonation.

The Bill addresses these concerns and lays out the formation of the Mediation Council of India, authorizing them by framing rules recommendations to conduct mediation. It also frames and lays norms, qualifications, etc., for delegation of mediators mentioned by regulations. It further lays guidelines and norms for constant education, registration, certification, and assessing mediators through recognized mediation institutions.

Additionally, it emphasizes that there is a want for all-inclusive steady legislation for mediation in India that will take up numerous features of its application, endorse community mediation, give an opening to mediation for settling an ample number of disagreements together with domestic and cross-border commercial disputes, marital, etc.

It entitles the Government to pass proper legislation allowing mediation settlements the position of a decree, judgment, and order apart from setting up the Mediation Council of India providing recognition to the mediation service providers, visualized in the draft bill.

If any disputes affect the tranquillity, euphony, and peace amid the residents or families of any region or place, they might be resolved through community mediation. The Bill authorizes State, District or Taluka Legal Service Authorities the ability to inform a group of mediators which consists of people who have standing, integrity, respected in the community, a national which includes a state awardee whose benefaction recognized by the State, a spokesperson belonging to the welfare associations around the area. This team of mediators will endeavour for solving the disagreements of parties through community-based mediation in a friendly manner. In all situations, when a mediated settlement agreement arrives, it will be written down with the signature and authentications of parties and mediators, respectively. In further scenarios, a failure report might also be presented to the State, District, or Taluka Legal Services Authorities or District Magistrate or Sub Divisional Magistrate.⁵

III. Existing legal scenario

Three techniques are there for starting mediation proceedings in India currently are first, by giving mediation as a procedure of sorting out disagreements in dispute resolution clause in contracts called “private mediation.” The second way is by referencing in courts under Section 89 of CPC 1908, known as “court-referred mediation.” Thirdly, several statutes also give mediation as the practice of working out disputes.

Nevertheless, there are several means for initiating mediation proceedings; there appears to be a crucial lack in the general lawful foundation. Private mediation has broken down gathering assistance as a consequence of the absence of a regulatory structure regarding the applicability of this settlement held out between this process. Civil courts are to mention discussions to the ADR process in Section 89 of CPC reads with Order 10 Rule 1A. Placing this section along with the 2002 alteration to CPC gave motivation to mediation in the country. But, in the case of Afcons Infrastructure Ltd. and Ors. vs Cherian Varkey Construction Co. (P) Ltd. and Ors,⁶ the Court pointed out particular confusions or framing mistakes in this Section, for instance, absence of lucidity in the usage of expressions like ‘mediation’ and ‘judicial settlement.’ The provision doesn’t provide a suitable platform for citing the problem to mediation. An absence of constant rules of policies governing mediation is prevalent. As a result, proceedings take place according to the rules stipulated by each High Court. Every single one of these elements has caused hindrances preventing it from going to its full profits.

Statutes like the Companies Act 2013, Industrial Relations Code 2020, etc., take mediation as a way of dispute resolution method. Yet the post-litigation structures of cases in these statutes are controlled by the CPC, and pre-litigation mediation is deregulated in these statutes. Precise awareness needs to be strained towards Section 12A of the Commercial Courts Act, giving mandatory pre-litigation mediation in all cases coming before these courts unless dire reassurance is demanded. Nonetheless, attempts have been made of misusing this exception to steer clear of mediation which leads to the failure of this provision to achieve its goal.

It is truly very admiring that the need for the proposed draft bill has been acknowledged after looking into these drawbacks within the present legal system.

IV. Loopholes of the Draft Bill

However, certain provisions have been left equivocal by draftspersons, needing immediate attention. The territorial jurisdiction of mediation centres has been laid down in Section 2 of the draft. The clarification to Section 2(i)(iii) requires improvement due to the expression “place of business having closest relationship to the mediation agreement” not being explained sufficiently. This ambiguous framing can lead to diverse interpretations. As a result, draftsmen must interpret expressions in such a way as to prevent any conflicts or doubts concerning the jurisdiction of courts later on.

Section 7 mentions that mediation must not be done with matters given under Schedule II of the draft. It's relevant bearing in mind that Schedule II is entitled “disputes which may not be fit for resolution through mediation.” Utilizing these various words leads to distinct definitions. Thus, the language needs to be simplified and compatible under these provisions so that it would be efficient in interpretations.

The legislators incorporated the process of mandatory pre-litigation mediation in Section 6 of the Bill whose intention was in giving incitement for mediation culture in India, but they failed to observe that the nation doesn’t consist of sufficient infrastructures of mediators as well mediation centres, etc., for this type of mediation, compelling reluctant parties going for mediation can be ineffective. These parties can make use of Section 26(1) of the Bill, where they could leave from mediation proceedings after making contact with the mediator, on condition that they took part in a session, consequently lessening the mandatory mediation into a procedural formality.

Finally, importance needs to be given towards Section 29 of the Bill, where parties could question the settlement agreement on corruption, fraud, etc., with a duration of three months from the date of getting the settlement agreement. This is contradictory to the principle generally in which the period starts from the date of discovering the fraud and not from the date of getting the agreement. A requirement for addressing these issues revolving around this limitation period of the provision becomes necessary.⁷

V. Conclusion

As it has been through this article, the Government has implemented steps for better facilitation of various ways of mediation but only introducing them is surely not enough. It needs proper functioning throughout the end. It also needs to be inspected and see whether it is working effectively or not for the citizens of the country because it is of no use in establishing it if it’s not compatible. It is very much appreciable for taking a step, but the Bill has some disadvantages which, if they are not amended, might create further problems in the days to come.

The Bill provides a stimulus of enforcing both domestic and international settlements to the mode of dispute resolution, and online mediation is truly fruitful in a post covid scenario.

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