Mediation Bill Passed by Rajya Sabha: A Transformative Step towards Effective Dispute Resolution
The Mediation Bill, passed by the Rajya Sabha on August 1, 2023, aims to promote and institutionalize mediation as an alternative dispute resolution mechanism. The bill reduces the maximum time for mediation proceedings to 180 days, with the possibility of extension by another 180 days upon application by the parties. It mandates parties to attempt mediation before approaching courts or tribunals for civil or commercial disputes. The bill also imposes costs on parties who fail to attend at least two mediation sessions.
The bill lists disputes that are not fit for mediation, including those relating to claims against minors or unsound minds, criminal prosecution, and rights of third parties. Disputes involving serious fraud, fabrication, forgery, impersonation, and coercion are also excluded, as well as proceedings before the Securities and Exchange Board of India and the Securities Appellate Tribunal. Land acquisition and determination of compensation under land acquisition laws are also excluded.
The Mediator is not bound by the Code of Civil Procedure, 1908, or the Indian Evidence Act, 1872, but any settlement reached through mediation will be enforceable in the same manner as a judgment passed by a court or through arbitration.
A mediated settlement agreement may be challenged on grounds of fraud, corruption, impersonation, or where the mediation was conducted in disputes or matters not fit for mediation.
Highlights of the Mediation Bill:
- Pre-Litigation Mediation: The Mediation Bill, passed by the Rajya Sabha, has introduced a landmark provision making pre-litigation mediation mandatory for civil and commercial disputes. Parties are required to attempt mediation before resorting to filing cases in courts or designated tribunals. This move aims to encourage amicable settlements, reduce adversarial litigation, and ease the burden on the traditional court system. Even if a resolution is not reached during pre-litigation mediation, parties have the option to request court-ordered mediation at any stage of the proceedings.
- Disputes Excluded from Mediation: The Bill provides a comprehensive list of disputes that are deemed unsuitable for mediation. These include cases involving minors or persons of unsound mind, criminal prosecutions, and disputes that significantly impact the rights of third parties. While the Bill seeks to promote mediation as a primary dispute resolution mechanism, it allows the central government to modify this list to address changing dynamics and ensure flexibility and adaptability in its implementation.
- Timeframe for Mediation: Recognizing the importance of efficient and timely resolution, the Mediation Bill sets a timeframe for mediation proceedings. Mediation must be completed within 180 days from the date of commencement, with parties having the option to extend the timeline by an additional 180 days upon mutual agreement. This provision ensures that disputes are resolved expeditiously while allowing sufficient time for constructive dialogue and negotiation. Additionally, the Bill allows parties to withdraw from mediation after attending two sessions, offering them flexibility and autonomy in the process.
- Mediator Selection: The Bill emphasizes party autonomy in mediator selection. Parties are granted the freedom to appoint any qualified mediator of their choice, provided both parties agree to the selection. In the event of disagreement, parties can approach mediation service providers who will appoint mediators from their panel of qualified professionals. This approach ensures impartiality and expertise in mediation, enhancing the credibility and effectiveness of the process.
- Establishment of Mediation Council of India: To regulate and streamline the profession of mediators, the Mediation Bill envisions the creation of the Mediation Council of India. This body will play a pivotal role in maintaining the quality and integrity of mediation services across the country. The Council’s functions include registering mediators, recognizing mediation service providers and institutes, setting professional conduct standards, and grading mediation service providers based on their performance. By creating this regulatory framework, the Bill seeks to enhance public confidence in mediation as a preferred mode of dispute resolution.
- Enforceable Agreements: The Mediation Bill empowers mediated settlement agreements (excluding community mediation) with the status of final, binding, and enforceable outcomes, similar to court judgments. This provision ensures that parties’ commitments and agreements resulting from the mediation process carry the same legal weight as a court decision. However, the Bill also outlines specific grounds on which mediated settlement agreements can be challenged, such as fraud, corruption, impersonation, or disputes that are inherently unsuitable for mediation.
- Community Mediation: Recognizing the importance of community harmony, the Bill introduces the concept of community mediation to resolve disputes likely to affect the peace and harmony among residents of a locality. A panel of three mediators, which may include individuals of standing in the community and representatives of resident welfare associations, will conduct community mediations. This approach fosters greater community involvement and ensures localized dispute resolution.
In-Depth Analysis and Key Issues:
The Mediation Bill’s introduction of mandatory pre-litigation mediation marks a significant shift in India’s approach to dispute resolution. While proponents argue that mandatory mediation can lead to higher rates of out-of-court settlements, reduce litigation costs, and expedite resolution, concerns have been raised about its compatibility with the voluntary nature of mediation.
The composition of the Mediation Council of India has also been subject to scrutiny. The absence of practicing mediators with substantial experience on the Council may raise questions about the Council’s ability to effectively regulate the profession and maintain ethical standards.
The requirement for the Council to seek prior approval from the central government before issuing essential regulations may impact the Council’s autonomy and efficacy, particularly if the government is involved in mediations. Striking a balance between oversight and autonomy is essential for the Council’s successful functioning.
Addressing international mediations, the Bill currently applies to disputes conducted in India involving at least one foreign party. However, it does not explicitly address the enforcement of settlement agreements resulting from international mediations conducted outside India. This issue may require further attention to promote effective cross-border mediation and ensure enforceability of agreements.
Moreover, the complex requirement of four registrations for mediators conducting pre-litigation mediation may lead to logistical challenges and hinder the availability of skilled mediators. Simplifying the registration process can enhance the pool of qualified professionals and improve access to mediation services.
While the Mediation Bill is undoubtedly a transformative step towards efficient and effective dispute resolution, it may necessitate additional refinement and stakeholder engagement to achieve optimal results and fulfill its intended purpose.
Please note that the analysis provided is based on the recent passage of the Mediation Bill by the Rajya Sabha and is subject to further developments and amendments in the legislative process.
