Mediation is a form of ADR.

ADR, or Alternate Dispute Resolution, refers to ways in which

disputes can be resolved between people without going through any formal trial. The ADR
proceedings are less formal in comparison to traditional court proceedings and help in
saving money along with getting speedy outcomes.

Mediation is a way of resolving conflicts with the help of a neutral third party that while
guiding through the process, helps reach the disputed parties to come to an agreement. It is
a voluntary process that does not impose a solution but creates a facilitating environment
for the disagreeable parties to come to settle.

This third, neutral party here is called a mediator, who is not a judge but rather a facilitator
that helps the parties to reach common ground and communicate. And if it has been agreed
upon, the decision of the mediator can be binding upon the parties, just like a court's
decision. The concept of mediation, as a form of ADR, is not new to India but dates back
centuries. Before, informal panchayats that used to exist were the medium to solve a
dispute between two parties, where the village head or the elderly were appointed as
mediators.

This started gaining popularity when Lok Adalats were re-introduced in the judicial system
of our nation, whose decisions were given the same status as that of a civil court. With the
laying down of the Arbitration and Conciliation Act, enacted in 1996, clear definitions were
set and a consolidated set of rules were given in this respect.

Why Is There A Need For A Mediation Bill

The total number of pending cases in the Supreme Court of India is 71,411 as on August 2,
2022, out of which 56,365 are civil matters and 15,076 are criminal matters. 59,55,907 cases
are pending in 25 High Courts across the country as on July 29 this year. The figure for
backlogs in subordinate courts is 4.13 crores.

This shows the congestion in the Indian judicial system, toppled by a lack of judges, flexible
procedures, and resources. India still has a long way to go to address her backlog of cases.

Therefore, to tackle this problem of arrears and delays, ADR, and Mediation specifically,
prove essential, and thus, it becomes important to bring it under certain statutory limits.
Previously, mediation was governed by the Code of Civil Procedure or the rules laid down by
mediation centers of various High Courts.

But now, the central government has tabled a draft mediation bill aiming to institutionalize
and give formal statutory backing to the mediation process in India. With the passing of the
bill, mediation could be popularised to get expeditious and enforceable remedies in a
structured informal framework, where the parties play an active role. And hence, this bill
becomes essential.

Till now, the bill has not been passed yet and is being referred by Parliamentary Standing
Committee on Law and Justice, which has recommended some major reforms in the bill. The
passing of the bill is much awaited and will start a new era of dispute resolution in the
country.

Current Scenario
At Present, Mediation In India May Be:

1. Court Referred (under Code of Civil Procedure, 1908)

2. Private (under a contract)
3. As per the provisions of a certain statute (e.g.- the Companies Act, 2013 or the
Consumer Protection Act, 2019) These services are provided by private centers for
ADR or centers set up by the respective courts or tribunals.

This is known as court-annexed mediation. Also, in the 129th report of the Law Commission
of India, it was opined to make it obligatory for the Court to refer to mediation for the
settlement of disputes. It was referred to within the landmark case of Afcons Below Ltd. v.
M/s Cherian Varkey Constructions, 2010.

Another landmark decision came from the apex court in 2013 in the case, B.S. Krishna
Murthy v. B.S. Nagraj 5where it directed to attempt to settle the marital dispute by way of
mediation and also directed the family court to refer cases with the consent of parties in
cases like maintenance, custody, etc. for mediation. One of the most renowned cases
settled through mediation was the one between Mukesh and Anil Dhirubhai Ambani over
the takeover of MTN, the South African telecom giant.

Salient Features Of The Bill

 Application of the Bill:

The provisions of this bill would apply to mediation proceedings conducted in India,
if:

i. Only domestic parties are involved, i.e. all parties habitually reside or are
incorporated in India
ii. The dispute is a commercial dispute and at least one of the parties is a
foreign party
iii. If it's stated in the mediation agreement that the proceedings would be as
per this bill
iv. The bill will apply in the following circumstances if the central or state
government is a party to the bill:

a. It's a commercial dispute

b. Other disputes as notified.
 
 Pre-litigation Mediation:
The parties in conflict must take steps to settle their dispute whether commercial or
civil, before approaching any tribunal or filing any suit in a court, by taking recourse
to pre-litigation mediation, even when a mediation agreement does not exist. The
court or tribunal can also refer the parties to a mediation proceeding, even if they
 were unable to settle through pre-litigation mediation if they request for the same.
 
 Appointment of Mediators:
The mediators can be appointed as agreed by the parties, and of any nationality,
unless agreed otherwise, provided that the foreign mediator agreed must have the
requisite qualifications that may be specified in the domestic regulations. The
mediator can also be appointed by any institution rendering mediation services
subjected to the acceptance of the person so appointed. In case of any conflict of
interest or doubt, the parties may choose to replace the mediators. The bill also lays
down the rules and processes to be followed for termination of the mandate of a
mediator or to replace one.
 
 Mediation Proceeding:
The proceedings done through mediation must be completed within 180 days (may
be extended by the parties for 180 days). These proceedings must be done
confidentially. Also, the parties could opt to withdraw from this process after two
sessions. Mediation annexed by a court must be conducted within the confines of
the rules so framed by that court and within their territorial jurisdiction. With the
consent of the parties, the mediator shall determine the language(s) which would be
used during this process. The mediator shall not be bound by the Code of Civil
Procedure, 1908 (5 of 1908) or the Indian Evidence Act, 1872 (1 of 1872).
 
 Mediated Settlement Agreement:
Agreements that are a result of mediation, duly signed by the mediator and the
parties in dispute, are final and bounds the parties and are enforceable in law, just
like court judgments are. Subject to the provisions of section 29, it shall be enforced
in accordance with the provisions of the Code of Civil Procedure, 1908, in the same
manner as if it were a judgment and/ or decree passed by a court, and may
accordingly be relied on by any of parties or persons claiming through them, by way
of defence, set off or otherwise in any legal proceedings. If the mediated settlement
agreement is sought to be challenged by either of the parties, they may apply to the
court or the tribunal with competent jurisdiction, which can be done on the following
grounds:

i. Fraud;
ii. Corruption;
iii. Gross impropriety;
iv. Impersonation.

All the costs, unless agreed otherwise, including the cost of the mediation service
provider, mediator's fee, etc., must be borne by both parties equally.
 

 Online Mediation:
Online mediation means conducting the mediation proceedings, including the pre-
litigation mediation as defined in this act by the use of computer applications and
networks, through secure rooms, encrypted e-mail services, and conferencing
 through audio and video mode. This must be in tandem with the provisions of the
Information Technology Act, 2000. Online mediation can be adopted either fully or
partially with the consent of the parties. This must be done by taking all necessary
steps to maintain the confidentiality and integrity of the proceedings. The
communication for this must be by way of the regulations provided in the IT Act,
2000.
 
 Mediation Council of India:
Through notification in the Official Gazette, the central government must establish
an institution to be known as the Mediation Council of India, to achieve the purposes
of this bill, which would perform the functions and duties specified in the bill. The
council must be a body corporate by the same name, having a common seal, with
perpetual succession, having the power to withhold or dispose of property
(immovable and movable), and having the capacity to enter into a contract.

The council must contain a chairperson, 2 full-time members, who have experience
with mediation and ADR, 3 ex-officio members, including the Law Secretary and the
Expenditure Secretary, and 1 one part-time member. The functions of the Council
will include- the registration of mediators, frame regulations and guidelines,
promoting domestic and international mediation in India, recognizing mediation
service providers and institutes, etc.
 
 Mediation service providers and Mediation institutes:
As per the provisions of this bill, the mediation service providers recognized by the
council, are required to be graded according to the regulations made by the Council.
The service providers can perform the following functions- a) Maintaining a panel of
mediators and accrediting them. b) Providing mediator services to conduct
mediation. c) Providing infrastructural and other related assistance to conduct the
mediation proceedings. d) Registration and filing of the mediated settlement
agreement as per the provisions of this bill. The council shall also recognize
Mediation Institutes which shall function as per the regulations laid down by the
Council.
 
 Community Mediation:
Community Mediation may be used to settle disputes that are likely to hurt/ affect
the peace and harmony amongst the families or the residents of that locality. This
must be done through a panel of three mediators, which may include
representatives of resident welfare associations, a person respected in the locality,
or any other person deemed appropriate. The District Magistrate or Sub-Divisional
Magistrate can constitute a panel for facilitating the binding settlement of the
dispute for which an application has been filed by any party of a community dispute.
 
 Mediation Fund:
A fund called 'Mediation Fund' shall be maintained by the Mediation Council, for the
purpose of promoting, encouraging, and facilitating Mediation in our country. The
grants made by the Central and State governments, the amount deposited by others
to contribute to this, interest received on investments out of this, or the amount
 received from any other resource shall be credited to the fund. The Comptroller and
Auditor General of India shall audit the accounts of the Mediation Council.

Key Issues:

 Unlike arbitration or litigation, mediation is a voluntary dispute settlement process

with the consent of parties and does not involve their adjudication. The Mediation
Draft Bill mandates pre-litigation mediation for commercial and civil disputes. This
defeats the purpose of mediation which is essentially a voluntary mechanism. It may
even cause further delay in the settlement of the dispute if the parties are unwilling
to mediate.

The Bill also mandates that the mediators conducting the proceedings must be
registered with the Mediation Council of India, a recognized mediation service
provider, selected by a Court annexed mediation center and a Legal Service
Authority. This condition of registering them at all four places makes the process
unnecessarily complex and redundant.
 
 The Draft Bill does not specify whether a Mediation Service Provider could be a
company.
 

 It is stated in the Bill that the majority functions of the Council will be discharged by
issuing regulations, which must be issued after taking approval from the Central
Government. The Council would be playing a titular role only if Government's
decision has to be taken for performing its function. There might be cases where
even the government might be a party to the mediation proceedings, which would
lead to a conflict of interests.
 
 The Draft Bill also lacks liabilities or consequences of non-registration of a Mediated
Settlement Agreement.
 
 The Bill has no provision covering settlement agreements which are a result of
international mediation that was conducted outside India. Even though India
became a signatory of the Singapore Convention in August 2019, it has not ratified it
yet. The Convention covers the enforcement of cross-border settlement agreements
that result from international mediation. This is neither covered in Part I nor Part III
of the Bill.
 
 Section 22 of the bill talks about confidentiality that must be maintained on part of
the parties in dispute as well as the mediator. However, the section doesn't talk
about any punishment or liability that would be imposed on willful infringement of
this primary objective of maintaining confidentiality.
Singapore Convention And Its Effect On Mediation In India
The United Nations Convention on International Settlement Agreements, which is also
known as Singapore Mediation Convention has 55 signatories including India. This
Convention aims to facilitate international trade by providing standard, unified rules to
govern commercial disputes in an international setting. But India is yet to ratify this, which
becomes imperative, to reap all the benefits and advantages of mediation.

With its ratification, a settlement agreement reached through international 'commercial',

mediation would be mandatorily enforceable, as per Article 3 of the Singapore Convention.
The ratification would also bring consistency of domestic laws with the Convention. Also,
Article 5(1)(e) provides that the mediators must follow certain standards which will provide
for a professional, ethical environment for mediation.

For India to ratify the Singapore Mediation Convention, the Indian Parliament must
promulgate legislation, under Article 253 of the Constitution, that gives effect to the
Convention. The demand for legislation has grown, considering it's a more economical
process and furthermore, it saves business and foreign connections.

It is expected that settlements reached through this Convention would be enforceable and
won't be reverted back to arbitration, even if the other party defaults. Thus, India's approval
of the Singapore Mediation Convention would help in settling disputes with parties outside
India and help them avoid the contractual route, seeking implementation.

Conclusion
To conclude, in no way can it be denied that the Bill in its current facet has its share of
positives and negatives and this indeed is a step forward in the right direction, as far as
encouragement and facilitation of mediation are concerned. Not only would it bring
uniformity but would also bring simplicity and would generate confidence among the
masses to take recourse to mediation as a form of dispute resolution, outside of a court.

At the same time, the Bill does have some gaps and concerns which need to be addressed
before letting it come into force to ensure that when the Act, when enacted, contains clear
provisions to provide better legal backing to it. In addition to this, the government must also
take steps to make the general public aware of mediation and its advantages and promote it
hugely, so that people could reap the benefits.

This would also help in providing relief to the distressed judicial system of the country and
will become a popular mechanism to settle corporate and family disputes in the near future.
The Mediation Bill, 2021: Analysis and
Impact
Recently, a separate bill for regulating the conduct and procedure of mediation
was introduced in the Rajya Sabha in December 2021. The main objective of the
legislature in bringing in such a law is to reduce the pendency of court cases.
Further, the bill aims to open the doors to institutional meditation for ordinary
people who do not want to get involved in lengthy court proceedings.  The impact
of Cov-19 on the court proceedings, taking it to the virtual hearings, had a
positive effect on the bill makers, who also aimed to include virtual/online
mediation, a cost-effective and time-consuming process.  

One of the most important and controversial provisions is  Section 6, which

makes pre-litigation mediation mandatory for the parties in civil and
commercial disputes before instituting the suits or proceedings in the court/
tribunals. Mediation is a voluntary dispute resolution process; therefore,
whether the legislation has adopted the right step by making pre-litigation
mediation compulsory is an interesting aspect. The argument on this is two-
faced, where compulsory mediation would not be beneficial to the parties, such
disputes will go for mediation for the formality but will withdraw after two
sessions from the process, thereby unnecessarily burdening the courts. On the
other hand, Niti Aayog has observed that such a compulsory mediation process
had positive outcomes in a few countries like Italy, Brazil, Turkey etc. Recently,
the Supreme Court, in the case of  M/s Patil Automation Private Limited and
others vs Rakheja Engineers Private Ltd.(2022 LiveLaw (SC)  678), the bench
comprising Justice KM Joseph and Justice Harikesh Roy has declared that
Section 12A of the Commercial Courts Act, which mandates pre- institution
mediation, is mandatory and suits which are filed violating this mandate are
liable to be rejected at the threshold under Order VII Rule 11 of the Code of
Civil Procedure.
The bill also highlights the ‘Role of Mediators’ in mediation. It allows either of
the parties to appoint a mediator by writing an agreement. In cases where the
parties fail or cannot appoint a mediator by mutual consent, they can take the
recourse of a mediation service provider, an institution administering mediation.
These institutions, which will train, educate, and certify mediators, must be
recognised by the Mediation Council of India. Another critical function of the
Council will be to provide certification, assessment and registration of mediators
and to lay down standards for their professional and ethical conduct.

The change in the mediation regime will benefit the courts in reducing their
burden of the workload of litigation matters as well as the parties, who can at
ease attend the mediation from any part of the world through video conferencing,
thereby being cost-effective for them. Nonetheless, the higher judiciary is
apprehending the loss of the Marginalized section as they will settle for less due
to unequal bargaining powers. In the words of Supreme Court Justice DY
Chandrachud, “People from marginalised groups are often at a disadvantage in
mediations due to the unequal bargaining power they possess over people from
privileged backgrounds”.

However, the Supreme Court in the above referred judgement has expressed
concern over the dearth of  “Trained and Skilled Mediators”  who can work
wonders. The court also pointed out that the lack of infrastructure and a
dedicated bar for mediation has undermined the accessibility of mediation
amongst the commoners. Mediation must be perceived as a new mechanism of
access to justice. The effective participation of the bar, which must be
adequately remunerated for its service, will assist in mediation evolving".