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What is the background?
- Dispute resolution in India has undergone significant transformation in the last 15 years. This was triggered by the advent of mediation– a form of alternate dispute resolution.
- Treating this consensual mechanism in the same way as arbitration and adversarial litigation has been a challenge. Ensuring that these mechanisms worked well in tandem via innovative ways like arbitration-cum-mediation has also been a challenge.
- Given its increasing prominence, mediation in India started requiring a law for its regulation.
- There have been scattered mention of mediation in several statutes for resolving consumer and commercial disputes. However, there is no comprehensive statute to provide for its various aspects and its practice.
- While critics have opined that regulation might kill the free spirit embodied by the mechanism, several quarters have called for such a comprehensive legislation.
- The Supreme Court Committee, in charge of court-annexed mediation process, set up a group of senior mediators. This group drafted the bill, which has now been presented as the Draft Mediation Bill 2021.
What are the pros?
- The draft legislation recognizes the need to treat mediation as a profession. This is significant considering the part-time honorarium basis given to the mechanism in court-annexed mediation schemes.
- It acknowledges the importance of training institutes for mediators and service providers for structured mediation.
- It also provides for pre-litigation mediation. It has even been designed to enable easy implementation. The parties to the mediation are required to have minimum 1 substantive session with the mediator. During this session, the process is explained to the parties. After this, they are free to either continue the mediation process or terminate it to follow the litigation route.
- The parties can bypass mediation at the 1st stage, if an urgent interim order becomes necessary. They may return to the process after resolving the interim issue.
- It eliminates the confusion from the use of terms ‘mediation’ and ‘conciliation’ in various statues. The Bill adopts the term ‘mediation’, in conformance with the international norm and has expanded its definition to include ‘conciliation’ too.
- Online dispute resolution is set to take off in the world affected by the pandemic. The Bill recognizes this too.
- It provides for enforcement of commercial settlements between parties, of different countries, in international mediation. This is to be according to the Singapore Convention on Mediation. India is a signatory to this convention.
What are the cons?
- The current Bill, which is to be introduced in the Parliament, is very different in some crucial places from the original draft given by the group of senior mediators.
- While the bill may transform India into a hub for international mediation for commercial disputes, there is a possibility that the reverse may happen as international mediation, when carried out in India, is treated as domestic mediation by the bill.
- This is unwise because the settlement under domestic mediation has the status of a decree or judgement of a court. This is good for cases involving only Indian parties, but when one of the parties is foreign, the consequences could be disastrous.
- The Singapore Convention doesn’t apply to settlements which have the status of a decree or judgement. Consequently, conducting cross-border mediation in India entails the loss of worldwide enforceability.
- This would deter parties from choosing India for conducting mediation. This would direct more flow towards countries like Singapore and Sri Lanka.
- The bill proposes a council to function as a governing mechanism and it is composed of 3 full-time members:
- A retired senior judge
- A person experienced in ADR law
- An academic in ADR field.
- The council is to function as an all-powerful body with functions like regulation, accreditation, certification, etc. Yet, it doesn’t have a single mediator as a member. None of the council members are active practitioners.
- Given that this bill deals with the field of dispute resolution, the fact that the Chief Justice of India is nowhere in the appointment process is problematic.
- The bill gives a list of disputes that shouldn’t be mediated. Though some of these may initially seem understandable, they may turn out to be unnecessary at second glance. eg:
- Disputes involving non-compoundable criminal offences: In litigation, it is standard practice to make many serious charges. This doesn’t prevent the litigating parties from settling and the accusations are retracted/ apologized for/ simply ignored.
- Disputes involving claims against minors, persons with intellectual disabilities, etc.: The law empowers the court to pass orders to protect minors and persons of unsound mind who are involved in cases. Just providing that settlements involving such persons require the court’s approval is sufficient and this would keep the possibility of a beneficial settlement via mediation open.
- Disputes relating to patent validity: Copyright and patent cases settle on commercial terms while leaving the grant validity untouched. In such a case, denying the possibility of mediation may only consign the case to long litigation process.
- Proceedings before TRAI: There isn’t a valid reason why telecom manufacturers and service providers can’t use mediation to resolve issues with consumers.
What is the way ahead?
- Though the government has put the draft bill forward for comments, what is required is focused and engaged discussion of it provisions, after the comments have been sent.
- If the issues of the bill aren’t remedied, our aspirations to become a hub of international mediation and ease of doing business could be crushed even before starting.
- The common objective is to position mediation firmly in the legal landscape and to prominently position India in the international mediation landscape.
Mediation has come of age and the draft bill recognizes this. The bill seeks to position India as a hub for international mediation. Stakeholder discussions and consideration are vital at this stage. Following this, the ball enters the Parliament’s court.