Alternative Dispute Resolution (ADR) is an emerging field in the world of law. In layman’s terms, it is settling disputes outside of the courtroom. ADRs seek to do exactly what traditional law taught people not to—settle matters without the constant and piercing scrutiny of the jury, judges and protracted time periods associated with litigation. This is exclusive of the extensive amounts of energy, resources and monetary depletion that conventional courtrooms battles bring.
In India, one of the major problems associated with litigation is the stash of unsurmountable pending cases, with over 5 crore cases pending before Indian courts as of December 2021[1]. This immense backlog has only been made worse by the COVID-19 pandemic which forced courts to be shut for two years, and problems associated with virtual courtrooms only dragged the process without much respite. Compared to these figures, Alternative Dispute Resolution mechanisms like Lok Adalats, mediation, negotiation, conciliation, judicial settlement and arbitration have resolved over 1 million cases since 2005 upto March, 2021[2].
“ADR mechanisms, particularly mediation and conciliation, can reduce pendency, save resources and time, and allow litigants a degree of control over the process and outcome of their dispute resolution process”.
N V Ramana, The Chief Justice of India
This raises several questions as to why ADR, especially party-centric processes like mediation, have not gained as much momentum as they should have. After all, any law student would know that mediation has “four pillars” which give it a “high success rate”. One of the prominent reasons why it has lagged behind as a domain is the lack of a legislative mechanism to regulate non-adjudicatory ADR methods like mediation, conciliation, Lok Adalat and judicial settlement. On the other hand, arbitration, being an adjudicatory mechanism, is governed by the Arbitration and Conciliation Act, 1996. It also implies that any decision arrived at by arbitration can be enforced under Section 36 of the said Act. This mechanism is not present for mediation as of now, contributing to its fairly uneventful landscape and untapped potential in India.
The Mediation Bill, 2021 aims to bridge the gap between theoretical appraisal for mediation and practical application of it to economically resolve disputes and remedy backlogs in Indian courts. In India, mediation can be:
- Court-referred (under the Code of Civil Procedure, 1908, judges can refer cases to mediation),
- Private (for example, under a contract with a mediation clause), or
- as authorised under a specific statute (such as the Commercial Courts Act, 2015, the Consumer Protection Act, 2019, or the Companies Act, 2013).
Private ADR or mediation centres, as well as centres established by courts or tribunals, provide mediation services (known as court-annexed mediation centres). According to the National Legal Services Authority, India had 464 ADR centres (397 operational), 570 mediation centres, 16,565 mediators, and over 53,000 cases were settled through mediation in the fiscal year 2021-22[3].
The Bill provides for the foundation of a Mediation Council of India[4] with a Chairperson, two full-time members, and other members[5]. Section 3 defines ‘mediators’, ‘mediation institute’ and ‘mediator service provider’. It also recognises both domestic and international mediations conducted as per the Singapore Convention. The Act also introduces the previously unknown concept of pre-litigation mediation, under Section 6 (1), before filing any suit or proceeding in any court or tribunal. It also makes it mandatory for parties to any civil or commercial disputes to attend at least two mediation sessions and these proceedings must be completed within 90 days with provisions for extension with the consent of both parties.
However, the Bill specifies certain disputes that cannot be delegated to mediation such as those involving criminal charges, disputes related to claims of minors or persons of unsound mind, third party rights and collection and levy of taxes. Section 7 provides that the Central Government by notification may amend this list.
To counter the pendency of cases, the maximum time duration from commencement to conclusion of the mediation proceedings has been set at 180 days[6]. Section 22 defines a ‘mediated settlement agreement’ to be binding on both the parties. This may either be a final or an interim draft, authenticated by the mediator. This mediated settlement agreement can be enforced in accordance with the provisions of the Code of Civil Procedure, 1908, with the same effect as that of a decree by a court[7]. Such an agreement can only be challenged on the grounds of fraud, corruption, impersonation or bringing a matter excluded under Section 7 into a mediation session[8].
Confidentiality of the proceedings has been emphasized and the mediator, mediation service provider and the parties, all are expected to adhere to the rules, although the mediator is permitted to share general information[9]. Additionally, online mediations have also been recognised under the Bill[10].
By making pre-litigation mediation necessary, the aspect of voluntariness is taken away and parties willing to only litigate may not arrive at anything constructive and have to bear additional costs. Certain tests and guidelines must be added with Section 7 to justify the exclusion of certain disputes on well-founded principles and precedents. The element of confidentiality has been wiped clean of all its layers and must be relooked as must the clause which mandates registration of the mediation settlement agreement. The Mediation Bill, 2021 is a positive step toward the promotion of ADR mechanisms for settlement, but the Bill has loopholes. Simultaneously, it is critical that the drafters address the gaps and problems stated above, so that the Mediation Act, as and when passed, has clear and extensive provisions that, in practice, assist the ADR method of mediation. As of date, the Bill has been referred to the Standing Committee for its recommendations.
This article has been written by Sakshi Narwal (II Year).
[1] Jelsnya Chacko, Touching 5 crore: What Pendency of Cases in India Looks Lie, https://www.barandbench.com/columns/debriefed-touching-5-crores-thats-what-the-pendency-of-cases-looks-like-in-india-statistics (20 Dec, 2021, 6:43 p.m.)
[2] PTI, Projected pendency of 45 million cases in courts an overstatement, uncharitable analysis: CJI Ramana, https://www.financialexpress.com/india-news/projected-pendency-of-45-million-cases-in-courts-an-overstatement-uncharitable-analysis-cji-ramana/2292408/
[3] Settlement through Mediation Report (April 2021 to March 2022), National Legal Services Authority
[4] The Mediation Bill, 2021, Section 33, Bill No. XLIII of 2021 (India)
[5] The Mediation Bill, 2021, Section 34, Bill No. XLIII of 2021 (India)
[6] The Mediation Bill, 2021, Section 21, Bill No. XLIII of 2021 (India)
[7] The Mediation Bill, 2021, Section 28, Bill No. XLIII of 2021 (India)
[8] The Mediation Bill, 2021, Section 29, Bill No. XLIII of 2021 (India)
[9] The Mediation Bill, 2021, Section 23, Bill No. XLIII of 2021 (India)
[10] The Mediation Bill, 2021, Section 32, Bill No. XLIII of 2021 (India)
