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A Need For Legislating A Framework For Mediation

Micheal Saldanha & Sumedh Yasaswi
2 May 2020 1:20 PM GMT
A Need For Legislating A Framework For Mediation
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One of the most common arguments that are put forth against the parties going for mediation is that a settlement arrived through mediation is ultimately unenforceable therefore, the entire exercise of mediation is at the most a formality that is futile. This has been the long-standing notion that needed an immediate fix in the fast- and ever-growing world, and this notion is now changing.

The Supreme Court has, therefore, thought it would be best if the Parliament could consider enacting legislation to give mediation the status of a decree. Having such a provision in place would help invoke important provisions under various laws[1], which provide for mediation as an effective mode of dispute settlement.

Introduction of mediation as a form of dispute resolution is important because it ultimately improves the ease of doing business because contracts can be respected in a better and quicker fashion. The importance of alternative and quicker forms of dispute resolution in a country to promote its ease of doing business has been mentioned time and again in both the 2018 and 2019 Ease of Doing Reports of the World Bank.

On January 12th, 2020, a committee headed by mediator Niranjan Bhat, met in Hyderabad to consider a legislation put forth by mediators from all over India. Emphasis was made on confidentiality, voluntary nature of the process, neutrality etc. This would ultimately promote pre-litigation mediation. The Chief Justice of India, SA Bobde, in an interview with Economic Times also stated that "All (Commercial matters) could be made to first go through pre-litigation mediation."[2] This would ultimately promote private mediation as opposed to court annexed mediation that would ultimately help in redressing disputes quicker and faster.

EVOLUTION OF MEDIATION IN INDIA:

  • In 1988, the 129th Law Commission Report on Urban Litigation and Mediation as Alternative Adjudication recorded that overburdening of courts with cases and unwanted delays has caused a flooding of litigation matters in India.
  • In 2002, The Code of Civil Procedure (CPC), 1908 was amended to introduce Section 89 which promoted alternative dispute resolution when the courts deemed that elements of a settlement existed.
  • In 2003, in the case of Salem Advocate Bar Association v. Union of India[3] (Salem 1), the Supreme Court upheld the constitutional validity of Section 89 and a committee under the Chairmanship of Justice Jagannath Rao was set up to draft rules of mediation.
  • The Civil Procedure Alternative Dispute Resolution Rules, 2003 (CPADR Rules, 2003 or mediation rules, 2003) were thereafter, drafted for various courts to adopt.
  • 9th April, 2005 – The then Chief Justice of India – Justice R.C. Lahoti ordered for the establishment of Mediation and Conciliation Project Committee (MCPC) to establish court-annexed mediation centers in several states to facilitate the implementation of mediation rules.
  • August, 2005 – MCPC Trained judges begin judicial mediation. Training was eventually extended to lawyers.
  • 2005 – In the case of Salem Advocate Bar Association v. Union of India[4] (Salem 2), the Supreme Court sought status reports from High Courts, Central and State Governments regarding the implementation and adoption of the mediation rules of 2003.
  • 2005 - Eventually, various courts started adopting the mediation rules.

THE 2 KINDS OF MEDIATION IN INDIA:

Ever since 2005, mediation was mainly court-annexed. The subject matters that were most prone for mediation were matrimonial and family law disputes – namely divorce, partition, restitution of conjugal rights, dowry prohibition etc.

The other kind of mediation, the one that needs a great push is private mediation. Very few institutions have been set up that carry out private mediation. Such mediation exercises often lack enforcement and they have to either enter into a fresh contract or file the settlement in a court for a decree.

THE NEED OF THE HOUR:

  1. A uniform legislation specific to mediation – If one were to notice the timeline of evolution mentioned above, not much has been done in the field of mediation in India since 2005. Private mediation lacks the push it needs in terms of enforcement and there are no guidelines for training and empanelment of mediators, etc. Therefore, a uniform law must be enacted to ensure that mediation is seen as an attractive, speedy and cost-effective mode for settlement of disputes. The law should include:
  2. A comprehensive scope defining the ambit of mediation;
  3. Mentioning that the application of mediation where a settlement is legally possible should be encouraged and no superficial restrictions should be imposed;
  4. Must clearly include that the scope of mediation law applies to international disputes as well – thereby honoring the Singapore Convention on Mediation, 2018.
  5. That Mediation should not entirely exclude sensitive matters such as domestic violence or victim offender cases in their totality. Safeguards may be introduced instead – the criteria for which can be put in place by the judges to protect the weaker party.
  6. Definitions for 'mediation[5]', 'mediator', 'mediation service provider', 'agreement to mediation', 'parties', 'participants' etc.
  7. Clearly outlined requirements of a mediator:
  8. Mention the qualifications and criteria for one to be a qualified mediator.
  9. Make sure that mediation is not just open to lawyers – should be open to police, judges, prosecutors and any other professional willing to become a mediator. This would aid in speedy justice.
  10. Maintenance of a registry of mediators so that parties may readily choose a mediator based on their requirements,
  11. Establishing a code of conduct that every mediator must adhere to
  12. A body to overlook the code of conduct, appointment and removal of mediators.
  13. Clearly outlining a model course for training of mediators that should include both theoretical and practical aspects.
  14. Mention how to deal with mediators with foreign accreditations.
  15. Mention the liability and accountability attributable to the mediator for the outcome of a settlement.[6]
  16. A committee to look into complaints against a mediator and the procedure to be followed by such committee.
  17. To promote pre-litigation mediation, there can be an obligation introduced for the parties to participate in a first introductory mediation session with a mediator to examine the possibility to continue with mediation in the same session for the parties to decide. The mediator present must furnish a report mentioning the attempts made to explain to the parties about the benefits of mediation, the response of the parties regarding it and why the attempt failed. The first mediation that is introductory in nature should not be costly for the parties.
  18. The mediation process and appointment of mediators must be clearly outlined.
  19. Costs have to be well thought of – either allow the parties to fix the mediation costs or fix slabs for the parties to know. Costs should also include mediator's fee, travel, other arrangements for the mediation exercise to be effective.
  20. Require the parties to sign an agreement to mediate before the commencement of mediation. A model of such agreement needs to be provided.
  21. Limitation periods need to be suspended during the course of mediation to ensure that parties can readily solve disputes. A moratorium can also be imposed on court proceedings.
  22. Parties should be allowed to request the application of interim measures during a mediation process.
  23. Allow for settlement based on facts if settlement based on merit was not reached.
  24. Enforce the substance of a mediation settlement either through a court decision or approval by a magistrate etc.
  25. Allow direct enforceability of mediation settlements only if parties agree and that the parties should be represented by lawyers to ensure that the settlement is not contrary to the law of the land.
  26. Grounds on which enforcement may be refused need to be defined.
  27. Upholding confidentiality clauses.

These are a few things that a model law should address in all certainty.

  1. Continuous training needs to be provided to all existing lawyers and training needs to be given to law students and every law school could perhaps have a centre for mediation that could act as a mediation service provider to areas in its jurisdiction that may be defined by the government.
  2. Large scale promotional activities have to be taken by the government to draw more people towards mediation in India.

With all these factors coming together, India could strive to close the gap that it has with respect to dispute settlement and further incentivize better international and national transactions. Mediation will go a long way in rendering speedy dispute settlement and most importantly, it gives the control back to the parties so that they may protect their respective interests best.

Michael Saldanha is a Partner at Atharva Legal LLP, Bangalore and Mr. Sumedh Yasaswi is Principal Associate at Atharva Legal LLP, Hyderabad. Views are personal.


[1] Chapter V of the Consumer Protection Act, 2019, Section 442 - Mediation and Conciliation Panel, Companies Act, 2013, Section 12A, Commercial Courts Act, 2018.

[2] "Supreme Court forms committee to draft mediation law, will send to Government.", Ajmeer Singh, Economic Times, available at https://economictimes.indiatimes.com/news/politics-and-nation/supreme-court-forms-committee-to-draft-mediation-law-will-send-to-government/articleshow/73394043.cms , last updated on 19.01.2020 at 11:40 P.M.

[3] (2003) 1 SCC 49: 2002 Supp (3) SCR 353.

[4] (2005) 6 SCC 344.

[5] For example, Mediation's definition could be – A structured and confidential process in which an impartial third person, known as a mediator, assists the parties by facilitating the communication between them for the purpose of resolving issues in dispute. – As written by The European Handbook for Mediation Lawmaking, adopted at the 32th Plenary meeting of the CEPEJ, Strasbourg on 13th and 14th June, 2019.

[6] A Mediator may be held accountable for damages to the party that arise out of him not following or adhering to the code of conduct and ethics.

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