New Mediation Law: Can It Unclog India’s Courts?

Mediation is of recent vintage in India. Although the Code of Civil Procedure was amended in 2002, it was only in 2005 that the country’s first mediation centre was started at the Madras High Court. However, it has made rapid progress principally in the court-annexed mediation centres. These are housed in the court and the mediators are mostly lawyers who have undergone training. The cases are referred by the court under section 89 of the Code of Civil Procedure in a wide range of personal, matrimonial, commercial, corporate, property, etc. disputes. These centres have shown a fair rate of success, including cases where the stakes are large and complexities are substantial. A committee of the Supreme Court has overseen this process and the Supreme Court, all the High Courts, and District Courts now have full-fledged mediation centres, which see a large number of cases being handled by a few thousand mediators.

With the focus being on court-annexed mediation, private professional mediation was lagging behind. In recent years, this has received attention with the realisation that for the effectiveness and sustainability of mediation, private mediation needs to flourish so that disputes can be resolved without taking the matter to court. It was also felt that a comprehensive Mediation Act would be necessary. This is now on the anvil. Over the last few months, the country’s leading mediators have created a draft enactment that has undergone some change in the hands of the parliamentary draftsmen.

The New Framework For Mediation

A prominent feature of the Draft Mediation Bill is the requirement that before a case is filed in court, mediation should be attempted. While there is no compulsion to settle in mediation, a good faith attempt will have to be shown by attending a substantive mediation session where the concept of mediation is explained and the parties realise its potential and possibilities. This is truly a remarkable step by placing a consensual threshold bar before entering the portals of the conventional adversarial system. The Act provides that if an urgent interim relief is sought, parties may approach the court without mediating, but have to come back to mediation after the issue of interim relief has been decided upon.

A list of cases that are not suitable for mediation has been prescribed mostly consisting of enactments where the decision-making has to be done by a court or quasi-judicial body. A clear process has been spelt out for the appointment, termination, and replacement of the mediator and for avoiding any conflict of interest. The Act contemplates mediation institutes and mediation service providers, the former to render training in mediation, and the latter to provide the services of mediators on their panel.

The governing body is the Mediation Council of India to be headed by a retired judge with experts in dispute resolution serving as members.

The grounds of challenge are minimal – fraud, corruption, gross impropriety or impersonation. This means that an overwhelming number of settlements will be implemented once the Agreement is signed. The Act also makes proviso for online mediation, and it should be noted that this method is now widely used in India after the pandemic struck. The online process is well suited for mediation which essentially involves close-door confidential discussions.

Addressing Cross-Border Disputes

Another important part of the Act deals with international mediation, between parties resident and working in India, and parties abroad. India was one of the earliest signatories to the United Nations Convention on International Settlement Agreements Resulting from Mediation, known as the Singapore Convention. This Act now puts into practice India’s commitment to the convention. This is a considerable relief to business organisations that are in foreign collaborations and transactions.

The Singapore Convention gives mediated settlement agreements an ease of enforcement which is not available for court decrees or arbitral awards. It is not often that legal enforcement is sought for mediation settlement agreements since they bear the stamp of consensuality. Nevertheless, if enforcement is necessary, it can now be had virtually for the asking in any country which is a party to the Convention, and where the assets of the defaulting party lie.

Freeing Up The Courts

India’s legal system is characterised by huge delays as its judge-population ratio is low. There is a limit to the creation of more judicial posts and infrastructure. As things stand, it appears that mediation is the hope of the day, to relieve the court of its caseloads. With personal, commercial, and civil litigation being moved to the mediation table, the courts would be freed up to attend to cases that can be resolved only by them. India’s hopes of a workable dispute resolution system therefore largely depends on the wise use of both adversarial litigation and consensual mediation.

Sriram Panchu is a Senior Advocate and Mediator.

The views expressed here are those of the author, and do not necessarily represent the views of BloombergQuint or its editorial team.