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A Critical Study of Mediation Process in India: The Challenges and Potential Solutions

[This article has been authored by Mayank Gandhi, a second year law student at MNLU, Nagpur]

Keywords: Mediation, ADR mechanisms, awareness, consistency, mediation law


India is home to 1.5 billion people and in such a vast country, dispute resolution becomes very important. It is very well known that the judicial system which is the most popular means of settling disputes in India is plagued by a huge pendency of cases, affecting its functioning and hampering justice delivery, The current Covid-19 pandemic has only added fuel to the fire. One of the alternative modes of dispute resolution is mediation. It is a very flexible, practical, and informal process. It fosters speedy redressal of disputes, consumes less time, and is economically cheaper. At the local level, panchayats resolve family, land, and other disputes through mediation. It re-builds the confidence, faith, and trust and seeks a win-win situation for the parties to the dispute by providing them opportunities to decide in what manner proceedings will be conducted. It has been recognized as an effective mode of dispute resolution all around the globe.

As far as Indian jurisprudence is concerned, the legislature is required to duly recognize the mediation process and should encourage it not only in commercial disputes but also in personal and consumer disputes. Recently, the law minister of India, Kirin Rijiju has said that the government is planning to introduce mediation law very soon. The proposed law is in line with a statement issued by the Chief Justice of India mentioning that an omnibus law is required to promote mediation in India. This article undertakes the task of identifying the challenges with respect to mediation process in India. It also highlights significant judicial pronouncements and several legislative frameworks regarding mediation and lastly, the author points out how streamlining the mediation process and enacting mediation law can prove to be a wiser step in achieving easy, effective, and affordable justice in India, and in lessening the burden of the judiciary.

Judicial pronouncements and National laws on mediation

Currently, India does not have any specific mediation law but there are various rules and procedures which talk about mediation. Section 89 of the Code of Civil Procedure enables parties to opt for one of the settlement processes such as mediation for resolution of commercial dispute and Rule 4 of the Alternate Dispute Resolution Rules, 2003 defines the mediation process. Moreover, the Arbitration and Conciliation Act, 1996 (“ACA”) spells out the provisions for private mediation. Additionally, Section 12A of the Commercial Courts Act, 2015 and the Commercial Courts (Pre-Institution Mediation and Settlement) Rules 2018 (“the PIMS Rules”)requires compulsory pre-institution mediation in commercial disputes valued at INR 3 lakhs or more. These Rules are in consonance with Section 12A of the said Act which talks about Pre-Institution Mediation and Settlement. There are several other Acts such as the Companies Act 2013, the Legal Services Authority Act 1987, the Micro, Small and Medium Enterprises (MSME) Development Act 2006, and the Consumer Protection Act, 2019 that mention mediation.

Further, several judicial pronouncements have paid attention to mediation in India. The Supreme Court of India (“SC”) in Salem Bar Association v. Union of India opined that means of Alternative Dispute Resolution as spelt out by Section 89 of the CPC need to be promoted for expeditious disposal of cases. The judgment is followed by the establishment of the Mediation and Conciliation Project Committee (MCPC) to encourage mediation. The SC in Afcons Infrastructure v. Cherian Varkey Construction Co. Ltd., observed that Section 89 of the CPC cannot be invoked in each and every case, there are certain disputes which falls under excluded category such as disputes relating to election to public offices, grant of authority by the court after enquiry, serious and specific allegations of fraud, fabrication of documents, forgery, impersonation, coercion etc, prosecution for criminal offences and Cases requiring protection of courts. Since such disputes involve public interest or interest of numerous persons who are not parties before the court, and it is very difficult in such cases to come to a compromised solution. However, all other suits and cases relating to trade, commerce, contracts, consumer disputes and tortious liability could normally be mediated. Additionally, in the case of MR Krishna Murthi v. New India Assurance Co. Ltd., the SC hinted at enactment of the Indian Mediation Act. The Apex Court has even transferred the high profile Ayodhya Dispute case to the mediation.

The author viewed that these judgments have played an important role in developing a sustainable mediation culture in India. The SC by creating a suitable committee has tried to effectively implement Section 89 of the CPC. It has played an important role for smooth functioning of ADR mechanism in India by developing comprehensive rules and regulations and by clearing some procedural ambiguities. Furthermore, the Court, by defining particular guidelines for referring civil matter to ADR has not only reduced the burden of courts but has also developed an effective and strong ADR culture. Deciding what matters can be settled by ADR mechanism and what matters are not suitable for settlement through ADR mechanism has saved the time, money and resources of the courts and increased the success rate of ADR mechanism. The Court has also laid some obligations on the judges while referring a matter to ADR. The author also opined that SC in various judgments has rightly pointed out that judges needs to be careful in specifying the nature of ADR mechanisms and deciding which matters needs to be referred to mediation, arbitration, conciliation, or any other ADR mechanism. Particularly, these Supreme Court judgments and the Mediation and Conciliation Project Committee (MCPC) established by Supreme Court has initiated Court-annexed mediation which is having a crucial impact on the growth of mediation in India.

Challenges with regards to mediation in India

Despite all statutory provisions and judgments highlighted above, mediation has not become a primary mode of dispute resolution. There are several issues attached to it, such as lack of a regulatory body, unclear procedural guidelines, lack of awareness, poor quality infrastructure, inconsistencies & discrepancies in different legislations regarding mediation.

1. Lack of Strong Infrastructure – For an effective and successful mediation process, it is required to have strong institutional infrastructure. This is to ensure that proper accommodation and required accessories are provided such as case managers, pre-conferencing facilities, separate air-conditioned cabins for the parties etc. Further, quality training is required to be given to mediators. However, in India there is no such central authority which formulates standard training guidelines for mediators and imparts quality training to facilitate mediation. There is a lack of professional mediators who can provide the right training to mediators. Sufficient financial aid is also not provided from the government which is essential for proper functioning of such centers. Moreover, very few state institutions pay attention to training and accreditation for mediators.

2. Lack of Public Awareness and confidence – The general public is not very aware about the mediation process. They are unable to understand its positive impact on justice delivery and have a pre-conception that courts are the only place for effective resolution of disputes. Hence, it is required that the legal industry and government make the public aware and change their attitude towards the mediation process. It is essential to encourage them to resolve their disputes first through mediation before approaching the court.

3. Reluctance by lawyers – Lawyers are not facilitating pre-institution mediation because they believe that resolving disputes through mediation will curtail their income which they are making through litigation, and they will lose their clients.

4. Unclear procedural guidelines/inconsistencies & discrepancies in different legislations – As highlighted earlier, the mediation process is governed by different laws in different manners in India, hence there is no unified governing legislation on mediation. Because of this, there are discrepancies and inconsistencies in the mediation process.

5. Unenforceability – The agreement or outcome derived through the mediation process is not binding on the parties, they can further approach the court for resolution of disputes. Hence, mediation will only add an additional layer to the justice delivery process and will defeat the very purpose of ADR mechanisms. The non-binding nature of the mediation hinders its adoption for dispute resolution.

Concluding Remark – Solutions for overcoming the problems

The recent judicial developments and affirmative approach of the government towards mediation has highlighted that the future prospect of mediation in India is very bright. Although, there are some challenges which may hamper the growth of mediation in India, these problems can be easily tackled by introducing a specified mediation law in India. The Government is required to put forth a comprehensive legislation on mediation. First, the statute should give the mediation settlement the status of a decree. Such agreements should be binding on the parties to the dispute and, should be enforceable before the law. This will reduce the burden of the courts and will encourage the parties to resolve their disputes amicably through mediation. Second, the statute should introduce provisions mandating pre-litigation mediation in commercial disputes, so that parties can mutually settle their conflicts before approaching court.

Third, a specified mediation law will provide clear guidelines regarding what will be the process of mediation, how proceedings will be conducted and so on. This will lessen the confusions regarding the mediation process. Additionally, the proposed Act should establish a central regulatory body which will oversee the functioning of mediation and arbitration centres. It should also encourage inclusion of internationally acclaimed arbitrators and mediators from countries such as Singapore and the UK for developing better and strong mediation centres. Further, there is no such effective data utilization mechanism which can provide information regarding the development of ADR. Hence, the mediation law by requiring the government to establish such mechanism can help in developing an effective data portal which can provide information regarding how many cases are referred for settlement through ADR mechanism, how many cases are disposed, what was the nature/type of the cases referred and to which mechanism these cases are referred. It will help in analysing the working of ADR mechanism and in finding out what improvements are required to be done.

Moreover, encouragement of mediation in law school curriculum will also help in realizing the importance of mediation in dispute resolution. Law schools are required to teach ADR as a separate discipline, start degree and diploma courses, provide appropriate training to students, and conduct various seminars, conferences, and training sessions on ADR mechanisms, so that they can be equip with the necessary knowledge, skills, and attitudes to be able to effectively mediate. Further, they will not be averse to use these mechanisms to settle disputes when they start practicing.

Further, the legal fraternity is also required to spread awareness among the general public about the advantages and disadvantages of mediation and other ADR mechanisms, so that they can understand what types of disputes can be resolved outside the court, and how they can take advantage of such a system to get proper justice without unnecessary delay. Moreover, the government is required to give an extra push to the mediation and arbitration culture by establishing adequate arbitration and mediation centers, providing adequate funding to these centers, and ensure timely and quality appointments, so that they can provide quality training to mediators and arbitrators. Hence, the enactment of mediation law in India and efforts by government and legal fraternity will make India a hub for mediation.

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