Harmony in Conflict: Exploring the Dynamics and Impact of the Mediation Act

Indian Parliament has introduced the Mediation Act,2023 with an objective to promote and encourage institutional and community mediation, enforce mediated settlement agreements and establish a regulatory body which will promote and facilitate mediation. The Act also addresses dispute resolution through online and community mediation in a cost-effective manner, writes PVS Sailaja, Assistant professor.

Hyderabad: Mediation is a process whose avowed objective is to provide a safe space for disputants to resolve their disputes without getting stuck in the mire of procedural complexities and legal constrictions. It is therefore paradoxical that we need a law to regulate mediation itself. But being a society governed by the “Rule of Law”, we need a law to confer legitimacy even on something that is meant to enable us to come out of the “tyranny of the laws”.

That is why we now have the Mediation Act, 2023 enacted by the Indian Parliament with the avowed objective to promote and facilitate mediation, promote institutional mediation, enforce mediated settlement agreements, establish a regulatory body, encourage community mediation, make online mediation an acceptable and cost-effective method. Sections 8 through 12 of the Act provide for the qualifications and oversight of mediators.

The Act allows the appointment of foreign nationals as mediators under specific conditions considering their qualifications, experience, and accreditation. Section 18 of the Act provides that mediation proceedings must be completed within 120 days from the date of the first appearance or for an extended time frame of 180 days if agreed upon by the parties.

Pendency in Indian courts is the first issue that comes to mind when one thinks about the problems facing the Indian judiciary. 11014734 of Civil Cases, 33844472 Criminal Cases of 44859206 Total Cases. That's the total number of civil cases pending in courts across the country. High pendency and consequent delays have been key reasons for the rising emphasis and popularity of alternate dispute resolution mechanisms. These include mediation, conciliation and arbitration.

In 1988, the 129th Law Commission Report on Urban Litigation and Mediation as Alternative to Adjudication (129th Report) observed that the enormous amount of congestion in courts and unnecessary delays had led to an explosion of cases in urban litigation. The Arrears Committee gave its report in 1990, with several recommendations, including the introduction of conciliation courts as recommended by the 129th Report.

On 9 April 2005, the then Chief Justice of India, Justice R.C. Lahoti, gave further impetus to mediation in India by ordering the establishment of the Mediation and Conciliation Project Committee (MCPC).

Mediation in India received an impetus due to the Supreme Court’s judgment in the case of Salem Advocate Bar Association v. Union of India (AIR 2005 (SC) 3353). In this case, a Committee was constituted by the Apex Court in order to enable better implementation of Section 89 by ensuring quicker dispensation of justice. This Committee drafted the Model Rules, 2003 which served as the model for various High Courts in framing their own mediation rules.

In K. Srinivas Rao v. D.A. Deepa ((2013) 5 SCC 226),while dealing with a divorce matter, the Apex Court went to the extent of saying that criminal courts could also refer to mediation cases where a complaint has been filed under Section 498-A of the Indian Penal Code, 1860. The SC further directed all mediation centres to set up pre-litigation desks or clinics to settle matrimonial disputes at the pre-litigation stage.

An example of an attempt to introduce mandatory mediation in the Indian context is the Commercial Courts Act, 2015, which was amended in 2018 to provide for pre-institution mediation and settlement. In M.R. Krishna Murthi v. The New India Assurance Co. Ltd. and Ors. The SC asked the government to consider the feasibility of enacting the Indian Mediation Act to take care of various aspects of mediation in general.

The objective of the mediation Act 2023 is to promote and facilitate mediation, especially institutional mediation. The Act also addresses dispute resolution through online and community mediation in a cost-effective and time-bound manner. Furthermore, the Act provides for the enforcement of mediated settlement agreements and the establishment of a Mediation Council of India.

Mediation, in basic terms, is the process of intervention by a third party between two contesting parties with the aim of reconciling them or persuading them to settle their dispute without going into litigation. Mediation is not a new process and is even mentioned in Section 89(1) of the Code of Civil Procedure, 1908, which was introduced by the Civil Procedure Code (Amendment) Act of 1999 and provides for the courts to refer parties to arbitration, conciliation, judicial settlement, or mediation for dispute resolution.

India, being a signatory to the Singapore Convention since 7th August 2019, makes a notable effort towards recognizing international mediation as a growing dispute resolution mechanism. However, there is a definite need for the country to ratify the Singapore Convention to ensure enforcement.

The Mediation Act is currently silent upon the procedure and enforcement of international mediation in India. Thus, more amendments can be seen in the future for when India ratifies the convention.

As a pioneer, the Mediation Act seeks to promote institutional mediation in India. The Act contemplates two kinds of institutions, viz. mediation institutes (MIs) that would provide training to mediators and mediation service providers (MSPs) that would provide mediation services to parties desiring to pursue mediation.

Yet another lacuna that emerges in respect of mediations in disputes arising out of matrimonial causes, family disputes, child custody disputes, property division disputes is where one of the parties may be residing abroad. By confining the definition of “international mediation” to commercial disputes alone, the Act excludes a large number of above-mentioned causes from its purview thereby limiting such parties from seeking mediation as a mutually satisfactory process.

The Mediation Act 2023, while a crucial advancement in integrating mediation into the legal system, is not without its criticisms. Section 28 of the Act permits challenges to mediated agreements on specific grounds such as fraud, corruption, impersonation, or when mediation was conducted for disputes falling outside the scope of Section 6.

These challenges must be initiated within 90 days of receiving the agreement, with a possible 90-day extension. However, these grounds for challenging the agreement are restricted and do not encompass issues like duress, coercion, or the discovery of fraud beyond the limitation period.

The Mediation Act 2023, while a crucial advancement in integrating mediation into the legal system, is not without its criticisms. Furthermore, the added process of mediation preceding the suit will also add to the already time-consuming and exorbitant litigation and as experienced in pre-institution mediation in commercial disputes, under Section 12A of the Commercial Courts Act, 2015, the defendants choose not to participate in mediation rendering it nugatory.

While it represents a significant step in formalizing and advancing mediation practices, it falls short in addressing certain practical issues, and therefore broadening the application of the process will further streamline the process and will increase the chances of resolution of disputes by mediation without having the need to go to trial.

Nonetheless, the Mediation Act, 2023 is a game-changing development in the realm of dispute resolution. By establishing clear standards, enhancing confidentiality, offering incentives, and ensuring enforceability, this legislation has substantially reshaped the mediation landscape.

It promotes mediation as the primary avenue for resolving disputes, aiming to streamline legal procedures while fostering a culture of collaboration and cooperation among conflicting parties. The Act represents a significant stride toward a more efficient, effective, and harmonious approach to dispute resolution.

The pandemic has emphatically established the role of technology in the justice delivery system. The Indian judicial system has significantly adapted to technology and decided to continue with hybrid hearings even post pandemic. Mediation particularly has been found eminently adaptable to technology because of fewer formalities and paperwork involved.

The Act provides statutory recognition to online mediations in Chapter VII but makes it mandatory to have the written consent of the parties for online mediation. Emphasis is laid on maintaining confidentiality and integrity of the proceedings and the communications that take place in the conduct of online mediations.

The First Schedule of the Act, that exempts certain disputes from being mediated is also a problem area as many of the disputes listed therein are amenable to mediation and there is no point in placing a statutory restriction on mediating these disputes. The applicability of the act should not be unduly restricted and must embrace a broad category of disputes.

Time limit for the completion of mediations has been introduced under section 18 with the intention of expeditious and efficient dispute resolution. However, it can be argued that, Mediation being a purely consensual process giving every right to one or all of the parties to withdraw from the mediation, placing a time limit for completion hampers the freedom of the parties to continue with the process if they feel the need for it.

Even though mediation is speedier, more cost-effective and offers greater possibility of preserving the relationship between disputing parties, the existing mediation framework in India has not allowed for reaping its full potential. Despite attempts to spread awareness about mediation and its inclusion as part of the legal education curriculum, knowledge of mediation is sorely lacking among the general public.

Even where parties are aware about mediation, a major challenge is the lack of incentives for them to attempt mediation. In India, there are certain myths associated with mediation which make it difficult for lawyers and their clients to consider it as a viable dispute resolution mechanism.