THE MEDIATION BILL, 2021

THE MEDIATION BILL, 2021

Recently, Parliamentary Standing Committee on Law and Justice has recommended substantial changes to the Mediation Bill, 2021. The Mediation Bill aims at institutionalisation of mediation and establishment of the Mediation Council of India.

Mediation is a form of alternative dispute resolution (ADR). It is a method of resolving conflict where two or more parties decide to reach an agreement with the help of a third, neutral party that guides them through the process.

Key features of Mediation Bill, 2021

1. Pre-litigation mediation:

• Parties must attempt to settle civil or commercial disputes by mediation before approaching any court or tribunals.
• Even if they fail to reach a settlement through pre-litigation mediation, the court or tribunal may at any stage refer the parties to mediation, if they request for the same.

2. Mediation Council of India:

• The central government will establish the Mediation Council of India.
• The Council will consist of a chairperson, two full-time members (with experience in mediation or ADR), three ex-officio members (including the Law Secretary, and Expenditure Secretary), and a part-time member from an industry body.

• Functions of the Council include:
  • Registration of mediators, and
  • Recognising mediation service providers and mediation institutes (which train, educate, and certify mediators).

3. Disputes not fit for mediation

• The Bill contains a list of disputes which are not fit for mediation. The central government may amend this list. These include disputes:

• Relating to claims against minors or persons of unsound mind,
• Involving criminal prosecution, and
• Affecting the rights of third parties.

4. Mediation process

• Mediation proceedings will be confidential, and must be completed within 180 days (may be extended by 180 days in certain cases).
• A party may withdraw from mediation after two sessions.
• Court annexed mediation must be conducted as per the rules framed by the Supreme Court or High Courts.

5. Mediators

• Mediators may be appointed by: (i) the parties by agreement, or (ii) a mediation service provider (an institution administering mediation).
• They must disclose any conflict of interest that may raise doubts on their independence. Parties may then choose to replace the mediator.

6. Mediated settlement agreement

• Agreements resulting from mediation (other than community mediation) will be final, binding, and enforceable in the same manner as court judgments.
• They may be challenged on grounds of: Fraud/Corruption/Impersonation, or relating to disputes not fit for mediation.

7. Community mediation

• Community mediation may be attempted to resolve disputes likely to affect the peace and harmony amongst residents of a locality.
• It will be conducted by a panel of three mediators (may include persons of standing in the community, and representatives of resident welfare associations).

Alternative Dispute Resolution (ADR) Mechanisms

• The process by which disputes between the parties are settled or brought to an amicable result without judicial intervention and without any trial is known as Alternative Dispute Resolution (ADR).
• ADR is a mechanism of dispute resolution that is non-adversarial, i.e., working together co-operatively to reach the best resolution for everyone.
• ADR offers to resolve all types of matters including civil, commercial, industrial, and family, etc., where people are not able to start any type of negotiation and reach the settlement.
• Generally, ADR uses neutral third parties who help the parties to communicate, discuss the differences, and resolve the dispute.
• It is a method which enables individuals and groups to maintain co-operation, social order, and provides an opportunity to reduce hostility.
• ADR can be instrumental in reducing the burden of litigation on courts, while delivering a well-rounded and satisfying experience for the parties involved.

Methods of Alternative Dispute Resolution (ADR)

Arbitration:

• The dispute is submitted to an arbitral tribunal which makes a decision (an “award”) on the dispute that is mostly binding on the parties.
• It is less formal than a trial and rules of evidence are often relaxed.
• Generally, there is no right to appeal an arbitrator’s decision.
• Except for some interim measures, there is very little scope for judicial intervention in the arbitration process.

Conciliation:

• A non-binding procedure in which an impartial third party, the conciliator, assists the parties to a dispute in reaching a mutually satisfactory agreed settlement of the dispute.
• Conciliation is a less formal form of arbitration.
• The parties are free to accept or reject the recommendations of the conciliator.
• However, if both parties accept the settlement document drawn by the conciliator, it shall be final and binding on both.

Mediation

• In mediation, an impartial person called a “mediator” helps the parties try to reach a mutually acceptable resolution of the dispute.
• The mediator does not decide the dispute but helps the parties communicate so they can try to settle the dispute themselves.
• Mediation leaves control of the outcome with the parties.

Negotiation

• A non-binding procedure in which discussions between the parties are initiated without the intervention of any third party with the object of arriving at a negotiated settlement to the dispute.
• It is the most common method of alternative dispute resolution.
• Negotiation occurs in business, non-profit organizations, government branches, legal proceedings, among nations and in personal situations such as marriage, divorce, parenting, and everyday life.

Lok Adalat

• It roughly means “People’s court”. India has had a long history of resolving disputes through the mediation of village elders.
• The system of Lok Adalats is an improvement on that and is based on Gandhian principles.

Why India needs a law on Mediation?

• Fast: Because the amount of time necessary for the parties and therefore the Mediator to organize for the mediation is significantly less than that needed for trial or arbitration, a mediation of dispute can occur relatively early.
• Flexible: There exists no set formula for mediation. Different mediators employ different styles. Procedures are often modified to satisfy the requirements of a specific case.
• Cost Efficient: Because mediation generally requires less preparation, it is less formal than trial or arbitration, and may occur at an early stage of the dispute.
• Brings Parties Together: Parties can save and sometimes rebuild their relationship like during a family dispute or commercial dispute.
• Convenient: The parties can control the time, location, and duration of the proceedings to a large extent. Scheduling isn’t subject to the convenience of courts.
• Creative: Resolutions that aren’t possible through arbitration or judicial determination could also be achieved.
• Confidential: What’s said during mediation is often kept confidential. Parties wishing to avoid the glare of publicity can use mediation to keep their disputes low-key and personal.
• Control: The parties control the result of the mediation and either party has the advantage of terminating the mediation if it’s felt that it’s not within the interest of the said party.

Why India needs to promote mediation?

• The 129th report of Law Commission and Malimath Committee recommended making it mandatory for courts to refer disputes for resolutions through alternate means if the resolution is possible.
• Reduce judicial pendency: According to the National Judicial Data Grid (NJDG), there are over 4.5 crore cases pending in the judiciary. Promoting mediation will reduce judicial pendency.
• To deal with this situation, ADR is a significant instrument that provides diverse techniques away from formal courts.
• Speedy resolution: It is less time-consuming and more cost-effective compared to formal courts.
• Relatively inexpensive.
• Nominal fee of mediator.
• Mediator is appointed on selection by parties.
• Proceedings are kept private.

• Parties can appoint mediator of choice.
• Mediation is not bound by rule of evidence; rather it is flexible.
• Settlement acceptable to both parties is final and no appeal can be made.

Key Issue and Analysis:

The Parliamentary Standing Committee has highlighted the following key issues:

• Compulsion: The Bill makes participation in pre-litigation mediation mandatory. Mediation is a voluntary dispute resolution process.
• Scope for Delay: Making pre-litigation mediation mandatory may actually result in delaying cases.
• Judicial intervention: The provision to give higher courts the power to frame rules for mediation was questioned.
• No bar of experienced professionals: The Mediation Council, established to regulate the profession of mediators, may not provide adequate representation of practicing mediators with sufficient experience.
• Prior approval from centre: The Mediation Council requires prior approval from the central government before issuing regulations related to its essential functions. It is unclear why such prior approval is required.
• Domestic conduct of mediation: The Bill applies to international mediations only if they are conducted in India. It does not provide for enforcement of settlement agreements resulting from international mediation conducted outside India.
• Narrower scope: Members questioned the non-applicability of the provisions to non-commercial disputes involving the Government and its agencies.

Recommendation made by the Parliamentary Standing Committee 

The Parliamentary Standing Committee on Law and Justice has recommended substantial changes to the Mediation Bill.

• Do Not Make Pre-Litigation Mediation Mandatory: The Mediation Bill, 2021, proposed to make pre-litigation mediation mandatory before the parties come to court. The committee recommends reconsidering the compulsory provision of pre-litigation mediation.
• Need To Minimize Disputes Excluded From The Bill: The committee recommended revising and pruning the list of disputes excluded from the process of mediation to ensure maximum coverage, including disputes involving people with intellectual disabilities.
• Against Excluding Government Disputes: Another key recommendation relates to the inclusion of most disputes involving the central or state government. The committee mentioned that more government disputes should be covered under the bill.
• Provision Relating To Interim Relief Needs Clarity: The committee proposed that courts grant interim relief after examining whether a prima facie case exists, evaluating the possibility of irreparable loss, and considering the balance of convenience to determine exceptional circumstances.
• Time limit: The committee also recommended setting a specific time limit for courts to decide on applications for interim relief and a clear time frame within which mediation should start after a court order is passed.

India is a signatory to the Singapore Convention on Mediation (United Nations Convention on International Settlement). Hence, enacting mediation law is appropriate for reducing judicial pendency.