In News:

• The Mediation Bill, 2021 was introduced in the Rajya Sabha in December, 2021, with the Parliamentary Standing Committee being tasked with a review of the Bill.
• The Bill aims at institutionalising mediation and establishing the Mediation Council of India.
• In its report, submitted to Rajya Sabha, the Committee recommends substantial changes to the Mediation Bill.

What’s in today’s article:

• News Summary

Need for mediation bill

• The Mediation and Conciliation Project Committee of the Supreme Court of India describes mediation as a tried and tested alternative for conflict resolution.
• While there is no standalone legislation for mediation in India, there are several statutes containing mediation provisions. This includes:
  • Code of Civil Procedure, 1908,
  • Arbitration and Conciliation Act, 1996,
  • Companies Act, 2013,
  • Commercial Courts Act, 2015, and
  • Consumer Protection Act, 2019.
• India is a signatory to the Singapore Convention on Mediation (formally the United Nations Convention on International Settlement Agreements Resulting from Mediation).
• Hence, it is appropriate to enact a law governing domestic and international mediation.

Key Features of the Bill:

• Pre-litigation mediation:
  • Parties must attempt to settle civil or commercial disputes by mediation before approaching any court or certain 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.
• Disputes not fit for mediation:
  • The Bill contains a list of disputes which are not fit for mediation.
  • These include disputes: (i) relating to claims against minors or persons of unsound mind, (ii) involving criminal prosecution, and (iii) affecting the rights of third parties. The central government may amend this list.
• Applicability:
  • The Bill will apply to mediations conducted in India: (i) involving only domestic parties, (ii) involving at least one foreign party and relating to a commercial dispute (i.e., international mediation), and (iii) if the mediation agreement states that mediation will be as per this Bill.
  • If the central or state government is a party, the Bill will apply to: (a) commercial disputes, and (b) other disputes as notified.
• Mediation process:
  • Mediation proceedings will be confidential, and must be completed within 180 days (may be extended by 180 days by the parties).
  • 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.
• 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.
• 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 (Alternative dispute resolution)), three ex-officio members (including Law Secretary, and Expenditure Secretary), and a part-time member from an industry body.
  • Functions of the Council include: (i) registration of mediators, and (ii) recognising mediation service providers and mediation institutes (which train, educate, and certify mediators).
• 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: (i) fraud, (ii) corruption, (iii) impersonation, or (iv) relating to disputes not fit for mediation.
• 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).

Concerns with the Bill

• Pre-litigation mediation
  • According to the Bill, pre-litigation mediation is mandatory for both parties before filing any suit. Parties who fail to attend pre-litigation mediation without a reasonable reason may incur a cost.
  • This is against Article 21, as under this article access to justice is a constitutional right which cannot be fettered or restricted.
• Cross-border mediation in India
  • The Bill considers international mediation to be domestic when it is conducted in India and the settlement under the latter is given the status of a judgment or decree of a court.
  • It will be disastrous when one party is foreign because the Singapore Convention does not apply to settlements which already have the status of a judgment or decree.
  • As a result, conducting cross-border mediation in India will exclude the tremendous benefits of worldwide enforceability.
• Controversy around Clause 26 of the bill
  • According to Clause 26 of the Bill, court-annexed mediation, including pre-litigation mediation, will be conducted in accordance with the directions or rules framed by the Supreme Court or High Courts.
  • However, the Parliamentary Committee found this provision as against the spirit of the Constitution.
  • In countries that follow the Common Law system, it is a healthy tradition that in the absence of statutes, apex court judgments and decisions carry the same weight.
  • However, the moment a law is passed, it becomes the guiding force rather than the instructions or judgments given by the courts.
  • Therefore, Clause 26 is unconstitutional.
• Non-Applicability to Non-Commercial Disputes:
  • The members questioned the non-applicability of the provisions of the Bill to disputes/matters of non-commercial nature involving the Government and its agencies.