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Mediation Act 2023: Important features of the New Law
Mediation Act 2023: Important features of the New Law
Mediation Bill passed by both houses and now becomes Mediation Act 2023
The Bill seeks to, “to promote and facilitate mediation, especially institutional mediation, for resolution of disputes, commercial or otherwise, enforce mediated settlement agreements, provide for a body for registration of mediators, to encourage community mediation and to make online mediation as acceptable and cost effective process and for matters connected therewith or incidental thereto.”
“Mediation is a voluntary, party-centered and structured negotiation process where a neutral third party assists the parties in amicably resolving their dispute by using specialized communication and negotiation techniques.”
‘Mediation is one of the methods of alternate dispute resolution” Section 89 of Code of Civil Procedure Courts
Dr Prem Lata Legal Head
Concept of Mediation
Its customary form is seen in ancient Indian system though people in the modern era strongly suggest it to be an American concept. In our older scriptures, footprints of mediation are seen as back as in Mahabharata time when Lord Krishna tried to mediate and negotiate between Kourvas and Pandvas though could not succeed and it led to a big war. This scripture is a big message with the idea that such Great War could be avoided if mediation and negotiation initiated by Lord Krishna could take a shape. Nearly every community, country, and culture has a lengthy history of using various methods of informal dispute resolution. In our villages even as today Panchayat system is the most effective mode of settlement. People still trust and agree to appoint any respected person from the society to redress their grievance without going into court battle.
Mediation in India:
• Alternate Dispute Resolution System in the form of Arbitration and conciliation act was already in practice which went under drastic change in the year 1996 by repealing the earlier act 1940.
• The concept of mediation received legislative recognition in India for the first time through Industrial Disputes Act, 1947. Section 4 of the Act has provided for conciliation efforts and duty was assigned to the Presiding officer for mediating and promoting the settlement of Industrial disputes. Detailed procedures were prescribed for conciliation proceedings under the Act.
• The Legal Services Authorities Act, 1987 came into existence by which the National Legal Services Authority was constituted as a Central Authority. The aim of the authorities is to encourage the settlement of disputes by way of negotiations and settlements.
• In 1999, the Indian Parliament passed the Civil Procedure Code Amendment Act of 1999 inserting Sec.89 in the Code of Civil Procedure 1908, providing for reference of cases pending in the Courts to ADR which included mediation. The Amendment was brought into force with effect from 1st July, 2002.
• The Mediation and Conciliation Project Committee (MCPC) was constituted by the Hon'ble Supreme Court of India on 9th April, 2005. Hon'ble Mr. Justice N.Santosh Hegde was its first Chairman. It consisted of other judges of the Supreme Court and High Court, Senior Advocates and Member Secretary of National Legal Services Authority. The Committee in its meeting held on 11th July, 2005 decided to initiate a pilot project of judicial mediation in lower courts which were found a great success in this field resulting into mediation centers annexed with all lower courts and High courts in the country and also in the Supreme Court.
• Mediation started getting more recognition since 2002, when various statutes like the Companies Act, 2013, the Commercial Courts Act, 2015, the Real Estate (Regulation and Development) Act, 2016, the Insolvency and Bankruptcy Code, 2016 and the Consumer Protection Act, 2019, gave emphasis for mediation. But there was no procedural law available for mediation.
• For the first time, the Hon’ble Supreme Court of India confirmed legal and constitutional validity of the new law reforms in the case filed by Salem Bar Association, TN V/S Union of India (2003) ISCC 499. The Law Commission of India was then directed to remove the anomaly in order to make section 89 of CPC workable. Delhi High Court started its own lawyers managed mediation and conciliation centers. Karnataka High Court also started a court-annexed mediation and conciliation centers and trained their mediators. Now court-annexed mediation centers have been started in trial courts all over the country
Development leading to Mediation Act 2023
The entire conversation about a Law on Mediation started in December 2018, the United Nations General Assembly, by consensus, passed a resolution to adopt the United Nations Convention on International Settlement Agreements Resulting from Mediation and also recommended that the Convention be known as the “Singapore Convention on Mediation” Signing ceremony of the Convention was held in Singapore on 7th August 2019.As of 12th August 2023, the Convention has 55 signatories, including India
In Indian context A Bill was introduced in Rajya Sabha on 20th December, 2021 and was referred to Parliamentary Standing Committee, Law and Justice for examination and report The Committee held extensive deliberations on the Bill with various Stakeholders and public at large and gave a Report (No. 117) on 13th July 2022 in two Volumes, containing the analysis and recommendations of the Committee and also the written memoranda/ submissions received by the Committee from the individuals/ experts/ institutions. After the Committee Report, again an Expert Committee was constituted by the Ministry to study the Report and finalise the Bill. So finally after all this, the Mediation Act 2023 was introduced in Rajya Sabha on 1st August 2023 and it was passed. Now it has been passed by the Lok Sabha also on 7th of August 2023
Important features of Mediation
1. Self participation oriented process in which litigant, advocate and even judges become participant in the mediation process and litigant gets a feeling that he is the person deciding for himself and is equally important to the entire process. Once the judge refers the case for mediation, the advocate or litigants brief the mediator. The litigants are given an opportunity to play their own participatory role in the resolution of disputes leading to win- win position for both the parties
2. Time saving &less expensive
3. Pre-litigation mediation :Any party before filing any suit or proceedings of civil or commercial nature in any court, shall take steps to settle the disputes by pre-litigation mediation whether any agreement to mediation exists or not (Section 6 of the Act)
4. Fit cases for Mediation : All dispute relating to compoundable offences or matrimonial offences connected with or arising out of civil proceedings between the parties can be referred for mediation It introduces a list of disputes under “Schedule-I”, which will not be fit for mediation. The list includes disputes involving allegations of serious, specific fraud, fabrication of documents, forgery, impersonation, coercion, criminal offences, etc.
5. Time specified for Mediation the Bill provides that the mediation under it should be completed within a period of 180 days from the date fixed for the first appearance before the mediator. However, it can be further extended as agreed by the parties, but not exceeding 180 days.
6. Establishment of the Mediation Council of India It also provides for the establishment of the Mediation Council of India by central government. It will consist of a chairperson, two full-time members (with experience in mediation or ADR), three ex-officio members (including the Law Secretary, and the Expenditure Secretary), and a part-time member from an industry Functions of the Council includes Registration of mediators, Recognising mediation service providers and Mediation institutes who train, educate, and certify mediators body
7. Concept of “Community mediation “is also evolved in this act. Any dispute which affect peace, harmony and tranquility amongst the residents of any locality can be referred for community mediation with prior mutual consent of the parties to an Authority constituted under the Legal Services Authorities Act, 1987 or District Magistrate or Sub-Divisional Magistrate in areas where any of the parties can make an application for mediation settlement
8. Voluntary Process: Consent of parties required .Mediation Act under Section 5(1) has made it voluntary. upholding the autonomy of parties in choosing the option and preserving Right to justice as fundamental right of a citizen
9. International Mediation recognized: Section 2(iii), it states that this Act shall apply where mediation is conducted in India, even if it is an international mediation. Under Section 3(g) “international mediation” is also defined.
10. “Mediation agreement” is provided in Section 4 of the Act but under Section 5(1), there is no distinction given for disputes covered under a mediation agreement or without any such clause. Meaning thereby it is not necessary to have mediation agreement clause for referring the matter to mediator like Arbitration and conciliation act 1996
11. “Institutional mediation” is provided under Section 3(f) of the Act, But Act is also silent as to what happens if an agreement contains an institutional mediation clause and violated. It appears this is deliberately not mentioned because the process is specifically said is voluntary
Missing provisions
Some legal experts have an opinion that the Mediation Act failed to consider the fact that after the Mediation law is made, business community and commercial contracts will start including mediation agreements in their contracts. Even though “mediation agreement” is provided in Section 4 of the Act and “Institutional mediation” is provided under Section 3(f) of the Act, under Section 5(1), there is no distinction given for disputes covered under a pre-defined institutional mediation clauses and of those without mediation clause.
It is further felt that no party will be willing to conduct an international mediation with an Indian party, as he will not be able to enforce the Mediation Agreement clause.
In spite of the recommendation of the Committee, the part on enforcement of International Mediation is omitted though under Section 2(iii), it states that this Act shall apply where mediation is conducted in India, even if it is an international mediation. Under Section 3(g) “international mediation” is also defined enactment without any ambiguity.
By doing so, the Committee felt that the object of developing India into a robust centre for domestic and international mediation can be achieved. Also the main objection to the 2021 Mediation Bill was about its being made compulsory and this hurdle is removed by making it voluntary. Under the circumstances Mediation clause was not desired
With great hopes, now we can proceed with Mediation at all levels
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