Introduction

“Mediation” as defined under the Mediation Act, 2023

“Mediation” includes a process, whether referred to by the expression mediation, pre-litigation mediation, online mediation, community mediation, conciliation or an expression of similar import, whereby parties attempt to reach an amicable settlement of their dispute with the assistance of a third person referred to as mediator, who does not have the authority to impose a settlement upon the parties to the dispute. Section 89(1) of the Code of Civil Procedure, 1908 permits courts to suggest arbitration, conciliation, judicial settlement, or mediation for dispute resolution. This is well accepted and implemented by the courts. Mediation canter’s have been set up across India. Despite this, private mediation lacked structure and legal recognition, discouraging participation. To address this, the Mediation Bill 2021 was proposed to enhance the effectiveness of mediation and provide a comprehensive legal framework for it.

Legislative Journey of Mediation in India

Mediation has a long history in India, particularly through the use of Panchayats for resolving community conflicts. Despite its effectiveness, mediation lost popularity during British rule, leading to an increase in disputes and delays in the adversarial legal system. In India, there were multiple suggestions, including by the Supreme Court of India in 2019 to enact a separate legislation for mediation. In 2020, a committee appointed by the Supreme Court recommended and drafted an umbrella legislation to give legitimacy to dispute settlement through mediation. The journey of the Mediation Act, 2023 began with its introduction on December 20, 2021. It was subsequently referred to a Parliamentary Standing Committee on Personnel, Public Grievances, Law, and Justice, led by Sushil Kumar Modi. After thorough examination, the committee submitted its report to the Rajya Sabha chairperson on July 13, 2022. The act was then passed by both the Rajya Sabha and the Lok Sabha on August 1 and August 7, respectively. This Act of Parliament received the assent of the President on 14^th of September, 2023. The Mediation Act, 2023 (‘Mediation Act’)was officially notified by the Ministry of Law and Justice on September 15th, 2023. Salient Features of the Mediation Act:

Object of the Mediation Act:

The Mediation Act, 2023 aims to inter alia (i) promote and facilitate mediation, especially institutional mediation for resolution of disputes, commercial or otherwise (ii) enforce mediated settlement agreements (iii) provide for a body for registration of mediators to encourage community mediation and (iv) make online mediation as acceptable and costeffective process.

Applicability of the Mediation Act:

The Act shall apply where mediation is conducted in India, and

all or both parties habitually reside in or are incorporated in or have their place of business in India; or
the mediation agreement provides that any dispute shall be resolved in accordance with the provisions of this Act; or
there is an international mediation; or
wherein one of the parties to the dispute is the Central Government or a State Government or agencies, public bodies, corporations and local bodies, including entities controlled or owned by such Government and where the matter pertains to a commercial dispute; or
to any other kind of dispute if deemed appropriate and notified by the Central Government or a State Government from time to time, for resolution through mediation under the Act, wherein such Governments, or agencies, public bodies, corporations and local bodies including entities controlled or owned by them, is a party.

Mediators:

The Mediation Act upholds and encourages party autonomy. It stipulates that the parties are at liberty to agree upon a mediator as well as the process of appointment of such mediator. It also permits online mediation as a valid form of dispute resolution if preferred by the parties. In the event that the parties fail to come to consensus on the appointment of the mediator and the procedure for such appointment, they may apply to a mediation service provider for the appointment of a mediator.

Disputes Unsuitable for Mediation:

Section 6 of the Mediation Act provides that: “A mediation under this Act shall not be conducted for resolution of any dispute or matter contained in the indicative list under the First Schedule: Provided that nothing contained herein shall prevent any court, if deemed appropriate, from referring any dispute relating to compoundable offences including the matrimonial offences which are compoundable and pending between the parties, to mediation”. The First Schedule of the Mediation Act provides a comprehensive list of disputes that are not suitable for mediation. These include disputes involving minors or people with intellectual disabilities, criminal prosecutions, tax-related issues, matters before regulatory bodies such as the Telecom Regulatory Authority of India and the Telecom Disputes Settlement and Appellate Tribunal, and cases under the Competition Act, 2002. The Act also extends its applicability to non-civil and non-commercial disputes, including compoundable offenses and matrimonial disputes. The provision offers clarity in identifying disputes that can be resolved through mediation. V. Pre-Litigation Mediation: Section 5 of the Mediation Act mandates pre-litigation mediation, irrespective of the existence of a mediation agreement before filing any suit or proceeding of civil or commercial nature in any court. It provides that irrespective of any mediation agreement, the parties may voluntarily, and with mutual consent, refer the dispute for settlement by mediation before filing any case of civil or commercial nature in any court. This excludes commercial disputes of specified value that are subject to compulsory pre-litigation mediation under the Commercial Courts Act, 2015. Further, any court/tribunal may at any stage of a proceeding, refer the parties to undertake mediation, irrespective of whether there is a mediation agreement or not. VI. Meditation Agreement: A mediation agreement can be included as a clause in a written agreement or as a separate written agreement. According to the Mediation Act, a written agreement can be any document signed by the parties or an exchange of communications or letters, including electronic communication as permitted by the Information Technology Act, 2000. Additionally, if one party alleges the existence of a mediation agreement in any pleadings or other proceedings and the other party does not deny it, that would also be considered a valid written agreement. Furthermore, parties can choose to submit a dispute to mediation even after the dispute has already arisen between them. The Mediation Act presently does not mandate the registration of Mediated Settlement Agreements, thereby allowing the parties to keep their confidentiality. The Act also permits parties to mediation proceedings to mediate in a language or languages of their choosing. VII. Time-limit: In a contemporary era, a prompt resolution of disputes not only conserves the valuable time and finances of the parties involved but also fosters an atmosphere which is conducive to contract enforcement and consequently business growth. The Mediation Act has been drafted keeping in mind this need of the hour and provides for mediation proceedings to conclude within a span of 120 days subject to an extension by a maximum of 60 days if both parties agree. Additionally, the Commercial Courts Act 2015, which applies to pre-institution mediation, is also proposed to be amended. Currently, this Act requires the mediation process to be completed within three months from the date the plaintiff applies for it, with a possible extension of two months with the consent of the parties. Therefore, while party autonomy is respected, the Mediation Act aims to strike a balance by establishing clear timelines that prevent unnecessary delays and ensure that mediation remains a structured and productive process. VIII. Enforcement of Mediation Agreement: A mediated settlement agreement resulting from a mediation signed by the parties and authenticated by the mediator shall be final and binding on the parties and persons claiming under them respectively and enforceable as per the provisions of sub-section (2) of the Mediation Act. The mediated settlement agreement shall be enforced in accordance with the provisions of the Code of Civil Procedure, 1908, in the same manner as if it were a judgement or decree passed by a court, and may, accordingly, be relied on by any of the parties or persons claiming through them, by way of defence, set off or otherwise in any legal proceeding. IX. Non-Settlement Report: Subject to the provisions of Section 26 of the Mediation Act, where no agreement is arrived at between the parties, within the time period prescribed under Section 18, or where, the mediator is of the view that no settlement is possible, he shall (i) in the case of institutional mediation, submit a non-settlement report to the mediation service provider in writing; (ii) in all other cases, prepare a non-settlement report and provide a signed copy to all the parties. The report referred to shall not disclose the cause of non-settlement, or any other matter or thing referring to their conduct, during mediation. X. Online Mediation: Online mediation including pre-litigation mediation may be conducted at any stage of mediation under this Act, with the written consent of the parties including by the use of electronic form or computer networks but not limited to an encrypted electronic mail service, secure chat rooms or conferencing by video or audio mode or both. The process of online mediation shall be in such manner as may be specified. The conduct of online mediation shall be in the circumstances, which ensure that the essential elements of integrity of proceedings and confidentiality are maintained at all times and the mediator may take such appropriate steps in this regard as he deems fit. For the removal of doubts, it is clarified that where the parties agree to conduct the mediation at any place outside the territorial jurisdiction or online, for the purpose of enforcement, challenge and registration of the mediated settlement agreement, the same shall be deemed to have been undertaken within the territorial jurisdiction of the court or tribunal of competent jurisdiction.

Community Mediation:

The Mediation Act has introduced the concept of community mediation whereby any dispute affecting the peace, harmony and tranquillity amongst the residents or families of any area or locality may be settled through mediation with the prior mutual consent of the parties to the dispute. It grants authority to the relevant governing body, District Magistrate, or SubDivisional Magistrate to establish a group of three mediators tasked with conducting the process of community mediation.

Challenges and Concerns:
The level of mediation competence within the Mediation Council appears inadequate. Only one member of the entire Council is required to possess knowledge of mediation law, which may not necessarily translate into a deep understanding of mediation nuances. Additionally, several provisions grant the government control over the Council, posing a risk to the dilution of mediation principles. Mediation is a skill-based craft, and leadership should be entrusted to those with training, experience, and autonomy.
Challenges to a Mediation Settlement Agreement (MSA) cannot be raised beyond a maximum of 180 days from the date the challenging party receives a copy of the authenticated MSA. If fraud, corruption, or impersonation is the basis for the challenge, it might be more appropriate to calculate the challenge period from the date of knowledge, as stipulated under the limitation act.
While international mediation is mentioned in the Act, it lacks comprehensive coverage.
Community Mediation is a progressive step, but the definition remains ambiguous.
The Tenth Schedule of the Act does not empower the Consumer Protection Forum to initiate cases for mediation on its own motion. This appears to be an oversight, as this provision is available in the Eighth Schedule for tribunals under the Companies Act, 2013.

Conclusion

In conclusion, the Mediation Act is a positive step that stands to benefit both the business community and litigants in general. However, the success of the act will depend on its effective implementation, the availability of qualified mediators, and ongoing efforts to educate the public about the benefits of mediation. As the legal landscape continues to evolve, the Mediation Act 2023 stands as a testament to the importance of alternative dispute resolution methods in achieving fair and just outcomes for all parties involved in legal disputes. Further COVID 19 and the economic duress seen globally has ensured that speedier and cost-effective justice, even if non-adjudicatory, is critical.

Author Name : Rashna Jehani